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Guilty Pleas Entered in $200M Medicare Fraud Case

John Commins, for HealthLeaders Media, May 5, 2011

ATC President Marianella Valera, and Medlink President Lawrence S. Duran pleaded on behalf of the two corporations before a federal magistrate judge in Miami on Tuesday. On April 14, Valera and Duran each pleaded guilty individually to dozens of felony counts, including conspiracy to commit healthcare fraud, healthcare fraud, conspiracy to pay and receive illegal healthcare kickbacks, conspiracy to commit money laundering, money laundering and structuring to avoid reporting requirements, federal prosecutors said.

With this week's plea, Duran and Valera admitted that their companies together, and with other coconspirators defrauded Medicare beginning in 2002 and until their arrest in October 2010. Duran and Valera also admitted that they used American Sleep Institute, identified as another shell company, to submit fraudulent Medicare claims, federal prosecutors said.

Duran, Valera and their coconspirators falsely altered patient files and therapist notes to make it appear that ATC patients qualified for PHP treatments. Duran and Valera also told employees and doctors to alter diagnoses and medication types and levels to make it falsely appear that ATC patients qualified for PHP services, federal prosecutor said.

Duran, Valera and others paid kickbacks to owners and operators of assisted living facilities and halfway houses, and to patient brokers in exchange for delivering ineligible patients to ATC and ASI. Some patients were paid kickbacks. 

Duran, Valera and their coconspirators used Medlink to hide the fraud and kickbacks from Medicare and law enforcement. Once Medicare paid ATC and ASI for the bogus services, Duran, Valera, and others transferred millions of dollars to Medlink. Duran and Valera used Medlink to distribute those millions of dollars to shell corporations and people to launder the money into cash to pay kickbacks.

Sentencing for the two corporations is scheduled for July 13. Both corporations, which have been out of business since the arrests of their owners in October 2010, face financial penalties of more than $80 million, the amount paid by Medicare from the scheme. The corporations' assets were frozen in October 2010 through civil forfeitures. 

Coconspirator Margarita Acevedo, also charged in the February 2011 superseding indictment, pleaded guilty on April 7. A fourth person charged in the indictment, Judith Negron, will be tried on Aug. 1.


John Commins is a senior editor with HealthLeaders Media.

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1 comments on "Guilty Pleas Entered in $200M Medicare Fraud Case"


anon (5/25/2011 at 4:26 PM)
One problem with that is that state insurance regulation is ineffective. An example of that is TIG Insurance. TIG Insurance is listed on the database of the State of Colorado Division of Insurance as being active and selling accident and health insurance as well as crop insurance, motor vehicle, and workmen's comp insurance. It gives as an address "2079 Hartwell Lane, Fort Mill, SC 29707". Google-maps shows that address as non-existent. The State of Colorado claims the phone number of TIG insurance is 469-426-4380. That is a Texas number. The State of South Carolina claims TIG's Insurance's "domicile" is California. The State of California lists TIG Insurance as being "active" with an address of "818 W 7th St Los Angeles, CA 90017?. Corporate Wiki lists about 500 corporations at that address. I called the Texas number and spoke to a "Keith Kingman". He said that TIG Insurance stopped selling insurance in 2002 and that all the insurance commissioners know that but they don't update their websites. He said I should call the state insurance commissioners and tell them that TIG Insurance is out of business. But I notified the Colorado Division of Insurance about TIG Insurance many times since 2004.