At times, it seems like there are more federal task forces than you can shake a stick it. Frankly, that's not a good thing because such efforts often result in petty turf wars among the purportedly cooperating but often competing members of the task force. However, sometimes these joint efforts get the job done. Consider the federal Health Care Fraud Task Force, which includes agents from the
Among the apparent successes of the Health Care Fraud Task Force was its investigation into Haven Health Care Management, LLC, a chain of nursing homes formerly headquartered in Middletown, Connecticut. The now bankrupt Haven Health had more than two dozen nursing homes in New England, with 15 in Connecticut.
In February 2005, former Haven Health Chief Executive Officer Raymond Termini obtained on behalf of Haven Health a $6 million loan from Allied Capital Corporation ("Allied") for the purpose of reducing Haven Health's debt; however, Termini subsequently admitted that he spent the money on other purposes, including purchasing real estate in his wife's name and under an LLC she controlled.
Omega Healthcare Investors ("Omega") is a real estate investment firm that owned nursing homes in Connecticut, Vermont, and New Hampshire, which Omega leased to Haven Health, which, in turn, operated and managed the homes. In September 2007, Omega agreed to provide funding to Haven Health for capital improvements to the fire sprinkler systems at two of its facilities in Jewett City and Soundview. Omega agreed to reimburse Haven Health for "Actual Costs" of sprinkler improvements for the fire sprinkler systems at the two facilities, up to an amount of $2 million. Ultimately, Omega wired $956,090 in sprinkler funding.
Termini and others obtained the sprinkler funds from Omega, but did not intend to use the money for the earmarked purpose. After receiving the sprinkler funding, Termini did not pay the vendors as he had told Omega he would, and did not spend the funds on the sprinklers.
On January 5, 2010, Termini pleaded guilty to one count of conspiracy to commit wire fraud and one count of unlawful monetary transaction in property derived from wire fraud. However, the Court raised concerns about the factual basis for his guilty plea to the monetary transaction charge arising from the Allied loan. On April 20, 2010, Termini withdrew his guilty plea as to that count and, instead, pleaded guilty to a separate count of wire fraud arising from that loan. He was sentenced in federal court in Bridgeport to 12 months and one day of imprisonment, followed by three years of supervised release; and ordered to pay a $6,000 fine and a $500,000 forfeiture.
Beginning in August 2007, Frederick J. Dalicandro, the former Director of Cash Management at Haven Health, and former CEO Termini engaged in a scheme to defraud Omega that involved the misuse of the sprinkler funding described above.
On November 3, 2009, Dalicandro admitted that he and Termini submitted invoices and checks to Omega in order to obtain the sprinkler funds, but did not intend to use the money for the sprinklers at the facilities, did not pay the vendors, and did not spend the funds on the sprinklers. He pleaded guilty to one count of wire fraud. On August 27, 2010, in federal court in Bridgeport, Dalicandro was ordered to pay a $2,500 fine and restitution in an amount to be determined but whose maximum is $956,090.
Former Haven Health Jewett City nursing home administrator Kimberly Boccacio was interviewed on July 14, 2008, by federal agents concerning the forging of the signature of a former resident on a Resident Admissions Agreement. She provided materially false information to the agents and stated that she had witnessed the patient sign the Agreement when, in fact, she knew that the signature was a forgery.
On August 24, 2009, Boccacio waived indictment and pled guilty in federal court in Hartford to one count of obstruction of a federal health care fraud investigation. Boccacio faces a maximum term of imprisonment of five years and a fine of up to $250,000.
On April 30, 2009, former Haven Health Regional Accounts Receivable Manager Serena Sylvia, of Waterford, CT was arrested by agents of the task force on a federal Criminal Complaint charging her with obstruction of a federal health care fraud investigation, making false statements relating to health care, and embezzlement from a health care benefit program. The Complaint alleged that in January 2008, Sylvia allegedly forged the signature of a resident of Haven Health's Jewett City nursing home in order to assist a collection action against the resident. It is alleged that Sylvia subsequently falsely testified in state court concerning the signature, and denied forging the signature to federal agents.
On January 7, 2011, Sylvia waived her right to indictment and pled guilty in federal court in Hartford to one count of health care fraud and one count of filing a false income tax return. As part of her plea, Sylvia admitted taking more than $53,000 from the trust fund accounts, and admitted that she did not pay income tax on the money she stole. She faces a maximum term of imprisonment of 10 years and a fine of up to $250,000 on the health care fraud count, and a maximum term of imprisonment of three years and a fine of up to $100,000 on the false tax return count. Sylvia is scheduled to be sentenced on March 28, 2011.
There are few times in our lives when we feel more vulnerable than when we are confined to a hospital or nursing home. For some, it may be an irreversible situation imposed by age or illness; for others, it may be a temporary step on the road to recovery. Frankly, be the circumstances end-of-life or rehabilitation, the loss of independence and the resulting dependency upon others is often devastating. Moreover, many families are forced to deal with this issue on behalf of loved ones.
Sadly, all too often in the business of health care, patients lose their humanity and become mere line entries on some balance sheet. When we most require and expect compassion, we too often receive numbing, bureaucratic disinterest. In the Haven Health case, we are confronted with yet more evidence of a failing health care system. Instead of upkeep and maintenance of the nursing facilities, we see little more than pigs gorging themselves at the trough.
NOTE: Individuals who suspect health care fraud are encouraged to report it by calling the Health Care Fraud Task Force at (203) 785-9270 or 1-800-HHS-TIPS.