Two owners of a seven-location chain of mental health clinics have pled guilty in Miami District Court for their roles in a scheme that resulted in the submission of more than $200 million in fraudulent Medicare claims.
Lawrence S. Duran and Marianella Valera, owners of the American Therapeutic Corp., pled guilty on April 14 to a superseding indictment unsealed February 15 that charges Duran with 38 felony counts and Valera with 21 felony counts. The charges include 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.
"Lawrence Duran and Marianella Valera masterminded a complex Medicare fraud scheme," said Assistant Attorney General Lanny A. Breuer. "They reaped millions in illegal profits by operating a sham mental healthcare company that provided unnecessary and illegitimate treatments to patients, many of whom were recruited through bribes and kickbacks, and then they laundered the proceeds."
According to information from the Justice Department, Duran and Valera began filing fraudulent claims in 2002 for partial hospitalization programs, a form of intensive treatment for severe mental illness. The claims were filed for all seven locations of American Therapeutic as well as a related company, the American Sleep Institute.
The indictment stated that Duran, Valera and others paid bribes and kickbacks to recruit Medicare beneficiaries to attend the two companies, then billed Medicare for treatments purportedly provided to these recruited patients. Court documents allege the treatments were medically unnecessary or not provided.
According to investigators, Duran and Valera supported the kickback scheme through an extensive money laundering scheme that aimed to conceal the conversion of Medicare payments into cash. They and their co-conspirators also engaged in measures to conceal their fraudulent activities from Medicare and from law enforcement, officials said, until they were arrested last October.
Last week, the company's marketing director, Margarita Acevedo, became the first defendant in the case to plead guilty. Acevedo, who is cooperating with investigators as part of a plea-bargain arrangement, said she paid millions of dollars to recruiters who were associated with assisted living centers and halfway houses who provided the patients under whom the services were billed.
Duran and Velera, who have been held since their arrest, could face up to 20 years in prison under current federal sentencing guidelines. However, that assumes the total dollar amount of the perpetrated fraud totals $200 million, as the government contends.
Attorneys for the defendants have argued any sentencing should be based on the total dollar amount actually paid for the fraudulent claims – about $83 million. Since sentencing guidelines are based on the amount of money defrauded, this would have a significant impact on the length of their sentences.