Owner of Detroit Rehabilitation Facility Pleads Guilty to $18.3M Medicare Fraud Scheme

Suresh Chand has pleaded guilty in U.S. District Court to one count of conspiracy to commit healthcare fraud and one count of conspiracy to launder money as part of an $18.3 million Medicare fraud scheme, according to a joint news release by the Department of Justice and Department of Health and Human Services.

Mr. Chand admitted that in 2003 he owned and controlled a company operating in Warren, Mich., called Continental Rehab Services, which purported to provide physical and occupational therapy services to Medicare patients. Mr. Chand also admitted that in 2004 he incorporated another physical and occupational therapy services company at the same Warren, Mich., address called Pacific Management Services. That company also purported to provide such services to Medicare patients.

Mr. Chand said in his guilty plea that he and his associates at CRS and PMS created false physical and occupational therapy files for Medicare patients when the purported services had not in fact been provided and then billed Medicare through sham Medicare providers controlled by Mr. Chand and others for these services. The sham Medicare providers included multiple Detroit companies such as Tri-Star Rehab Services, Manage Care Physical Therapy & Rehab Services and SUB Rehabilitation and Physical Therapy Center.

In his plea, Mr. Chand admitted that in order to create the false therapy files, he and his co-conspirators paid cash kickbacks and other inducements to Medicare patients in exchange for their Medicare numbers and signatures. Mr. Chand acknowledged recruiting hundreds of Medicare patients and paying them with cash and prescriptions for Vicodin and Xanax, obtained from a physician who had never seen the patients. He also admitted that he prepared false prescriptions and files for the physician's signature. Mr. Chand said that he and others would obtain signatures from licensed therapists on false progress notes indicating that the therapists had provided therapy, when they had not, in order to complete the files. The licensed therapists were paid to help falsify the files, according to the release.

Between Jan. 2003 and March 2007, Mr. Chand said he and his co-conspirators submitted claims to the Medicare program totaling approximately $18.3 million for unnecessary therapy services that were never rendered. Mr. Chand said that he laundered the funds received from Medicare through a series of transactions using shell companies designed to conceal the nature, source, location, ownership and control of the funds.

Mr. Chand's sentencing is scheduled for Jan. 13, 2010. He faces up to 30 years in prison and a $750,000 fine.

Read the DOJ/HHS release on the Detroit Medicare fraud scheme.

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