In the News: Millions in Fraud Uncovered

July 9, 2019

Fighting fraud is a battle that has many fronts from health care to insurance, government and business. Here are just some of the cases making headlines now that are costing anywhere from hundreds of dollars lost into the millions.

Phony billings left autism patients without treatment

Two South Carolina women are going to federal prison for a long-running $13-million federal health care scheme to falsely bill health insurance programs for care supposed to go to autistic children.

Magistrate Judge Paige Gossett gave Angela Keith, one year in prison, and Ann David Eldridge, six months in prison.

A federal grand jury also indicted the founder and former top executive of the Early Autism Project, Susan A. Butler, with a scheme to inflate medical bills by about $9 million.

Fraudsters took advantage of injured workers

Injured workers in California thought they were calling a hotline to navigate the workers’ compensation system. Instead, they were set up with a group of corrupt doctors, attorneys, and patient brokers who made money at their expense.

The FBI says the San Diego-based fraud ring cheated the California workers’ compensation system and private insurance out of more than $200 million.  They also subjected patients to unnecessary procedures.

So far, 32 people and companies in the scheme have pleaded guilty and five have been convicted, receiving prison sentences as high as 10 years. More than $1.2 billion in suspect billings have been frozen.

Politician sentenced to penitentiary for fraudulent contracts

A former member of the Virginia House of Delegates was sentenced recently for defrauding the federal government.

Ron Villanueva pleaded guilty to making false, fraudulent and misleading, which resulted in more than $80 million in government contracts being awarded.

He was sentenced to 2.5 years behind bars with three years supervised release and must pay back more than $500,000.

Repeat offender Serco fined £22.9m for government contract fraud

Outsourcer Serco will pay a £22.9m fine to the U.K.’s Serious Fraud Office for overcharging the government for a contract.

Serco has already paid back the government in a 2013 settlement for £70m.

In the settlement, Serco Geografix takes responsibility for three counts of fraud and two of false accounting for misleading the Ministry of Justice over its profits from a contract to electronically tag offenders after release.

Meanwhile, the accounting watchdog has fined Deloitte £4.2m for its audit of Serco at the time when the company was said to have carried out "deliberate fraud" over the government-tagging contract.

Former HUD executive indicted in fraud scheme

A U.S. grand jury returned a seven-count indictment against a former assistant inspector general at the Housing and Urban Development Department, charging him with fraud.

The 19-page indictment alleges Eghbal “Eddie” Saffarinia sent significant government business to a company while he was receiving $80,000 in payments.

The indictment alleges Saffarinia used his procurement oversight role and access to contractor proposal and source selection information to execute a scheme under which a company received $1,065,520 for subcontractor work.

Brothers jailed for $20 million insurance fraud

Two brothers who owned a North Miami Beach insurance company bilked more than $20 million from two different finance companies. Stuart Starr, 62, was recently sentenced to nearly eight and half years in federal prison and must pay $20 million in restitution. His brother Glen Starr received the same sentence earlier.

Both pleaded guilty to one count of conspiracy to commit wire fraud and five counts of wire fraud.

Starr issued liability and cargo policies to independent truckers and small trucking companies. They would then work with finance companies to secure loans for clients, but pocketed the money.

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About Anu Sood

Anu Sood (LinkedIn | Twitter) is the Director Marketing at CaseWare RCM and is responsible for the company’s global marketing strategy. She has over 20 years of experience in product development, product management, product marketing, corporate communications, demand generation, content marketing and strategic marketing in high-tech industries.

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