New Orleans Business Owner Sentenced to 80 Months in Prison for Role in $3.3 Million Fraud Scheme

The owner of a New Orleans company that defrauded Medicare of more than $3.3 million was sentenced today to 80 months in prison for directing the scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Kenneth A. Polite of the Eastern District of Louisiana, Special Agent in Charge Jeffrey S. Sallet of the FBI’s New Orleans Field Office and Special Agent in Charge C.J. Porter of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Regional Office made the announcement.

Tracy Richardson Brown, 46, of New Orleans, was sentenced by U.S. District Judge Stanwood R. Duval Jr. of the Eastern District of Louisiana, who also ordered Brown to pay $2,004,391.63 in restitution.

On April 30, 2016, Brown, who owned and operated medical equipment supply company Psalms 23 DME LLC (Psalms), was convicted on 18 counts of health care fraud, conspiracy and related charges.  Evidence introduced at the five-day trial showed that Brown paid patient recruiters for the names and billing information of Medicare beneficiaries in and around New Orleans.  The evidence that was presented also showed that Brown used this information to cause Psalms to bill Medicare for power wheelchairs, accessories and various knee, elbow and back braces supposedly provided to these beneficiaries.  However, according to the evidence presented at trial, the vast majority of these patients did not need, and often did not receive or even want, this equipment. read more »

Texas Man Charged with Running Fraudulent Investment Companies

A Texas man was charged with fraud and obstruction of justice in an indictment unsealed today involving two investment companies that allegedly defrauded investors resulting in losses of approximately $900,000.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney John R. Parker of the Northern District of Texas and Special Agent in Charge Thomas M. Class Sr. of the FBI’s Dallas Office made the announcement.

Stanley Jonathan Fortenberry, 50, of San Angelo, was charged with three counts of mail fraud, two counts of wire fraud and one count of obstructing an official proceeding.  Fortenberry was arrested this morning and made his initial appearance in court this afternoon.

According to the indictment, from 2013 to 2014, Fortenberry ran Wattenberg Energy Partners, which raised funds for oil and gas drilling projects in northern Colorado.  Fortenberry allegedly set up the company in his son’s name because Texas and Pennsylvania state securities regulators had previously ordered Fortenberry to not sell unregistered securities in oil drilling projects.  The indictment alleges that Fortenberry used a network of salespeople to call and solicit individuals to invest in drilling projects.  Rather than designate investors’ funds for drilling projects as promised, the indictment alleges that Fortenberry spent the vast majority of the funds on himself read more »

NY investment adviser, lawyer indicted for alleged insider trading

A Long Island investment adviser and a former partner at a major law firm have been indicted on charges that they engaged in insider trading ahead of Pfizer's acquisition of King Pharmaceuticals in 2010, prosecutors said on Wednesday.

Tibor Klein, who owned advisory firm Klein Financial Services, and Robert Schulman, a Washington, D.C., patent lawyer who at the time was with the law firm Hunton & Williams, were charged in an indictment filed in Central Islip, New York. read more »

SEC Charges Stockbroker and Friend With Insider Trading

The Securities and Exchange Commission today charged a stockbroker and his friend with participating in an insider trading scheme to profit in advance of two major announcements out of a pharmaceutical company. 

The SEC alleges that Paul T. Rampoldi coordinated the insider trading with two other brokers at his firm as well as a then-IT executive at Ardea Biosciences.  The Ardea employee tipped one of the brokers ahead of the company’s announcement of an agreement to license a cancer drug and later tipped him in advance of its acquisition by AstraZeneca PLC.  The SEC charged the other two brokers and the Ardea employee last year. read more »

10th Circ. Will Hear First-To-File FCA Challenge

A Tenth Circuit panel agreed Wednesday to a midcase appeal weighing whether the False Claims Act's so-called first-to-file rule bars a Utah federal judge from hearing a whistleblower suit over allegedly uninspected civilian and military aircraft gears.

The panel voted 2-1 to take on a Triumph Group Inc. subsidiary's challenge of an April ruling refusing to dismiss the case in light of the first-to-file rule, which prevents whistleblowers from filing suit for allegations that have already been brought up in court. Without discussing its reasoning, the panel noted that Circuit Judge Jerome A. Holmes would have denied the company's petition for interlocutory appeal. read more »

Hospital Lied About Resident Availability, Says FCA Suit

An Advocate Health Care teaching hospital allowed surgeons to bill Medicare and Medicaid for surgeries performed with assistant surgeons and physician assistants when qualified residents were available to help, in violation of the False Claims Act, according to a whistleblower suit in Illinois federal court.

Former medical resident Luay Ailabouni, in a suit unsealed Monday, said teaching hospitals must use qualified residents when they’re available for surgeries with Medicare and Medicaid patients, but are allowed to enter a modifier, 82, when billing for surgeries during which no residents could help. He alleged the surgeons from Cardiothoracic & Vascular Surgery Associates, practicing at Advocate Christ Hospital and Medical Center, would use that modifier even when it wasn’t appropriate.  read more »