DOJ Report to Congress Details Fight Against Nursing Home Neglect, Elder Abuse and Financial Fraud

Federal regulators have made significant progress combating elder abuse and financial fraud since July 2023, according to a new report.

By: Michael Adams 

In recent years, the U.S. Department of Justice (DOJ) has been working in tandem with federal, state, local and Tribal law enforcement agencies to target financial fraud and abuse involving elderly Americans, as well as their risks of nursing home neglect due to grossly inadequate care in long-term facilities.

Older individuals face an increased risk of falling prey to various financial fraud schemes, and they face particular dangers of abuse at the hands of caretakers, both at home and in nursing home facilities.

As a result of these dangers, a number of new federal programs have been started, and legacy programs have continued gaining traction, to help curb the physical and financial abuse of elderly Americans.

Last month, the DOJ released its sixth Annual Report to Congress on Activities to Prevent Elder Fraud and Abuse, which outlines programs the agency has put in place to combat elderly fraud and abuse, as well as how those programs performed from July 1, 2023 to June 30, 2024.

National Nursing Home Initiative Addresses Elder Neglect

The DOJ report indicates that the agency’s Elder Justice Initiative is cooperating with 94 U.S. Attorneys’ Offices across the country to implement the National Nursing Home Initiative, which will help identify nursing homes that do not provide adequate staffing numbers or skill to provide for resident care.

The National Nursing Home Initiative also tracks and identifies nursing home facilities that do not adhere to basic nursing standards, or provide their residents with enough food, as well as those that use inappropriate physical and chemical restraints to sedate residents.

Government officials are already enforcing actions against nursing home facilities that have committed fraud, provided unnecessary medical services, or been unable to care for residents in the manner that the law requires.

The report also indicates the DOJ’s Office for Victims of Crime (OVC) awarded nearly $6 million to 12 different organizations that will support local communities over a three year period, by providing services to elderly victims of abuse and exploitation.

In addition, the agency reports that between July 2023 and March 2024, more than 9,750 individuals over the age of 60 applied for compensation through the DOJ’s Victims of Crime Act (VOCA) Formula Grant Program.

VOCA addresses the emotional and financial needs of crime victims, by advocating for them and assisting with medical services, counseling, transportation, funeral and burial costs, as well as lost work. During the reporting period, VOCA awarded more than $79 million specifically to organizations that assist individuals who experience elder abuse.

The DOJ has also pursued at least 300 enforcement actions against hundreds of fraud defendants, returning more than $31 million to elderly victims of financial scams during the covered period. In fact, the report points out that the National Elder Fraud Hotline has fielded more than 139,000 calls across all 50 states, as well as 44 other countries and territories since it was launched in 2020.

“Raising public awareness is an essential part of the Department’s efforts to combat and reduce elder abuse, neglect, financial exploitation and fraud,” said Andy Mao, National Elder Justice Coordinator Deputy Director of the Civil Fraud Section. “With so much elder abuse hidden from the public eye, it is imperative that we arm our communities with the information and red flags they need to identify and recognize potential abuse when they see it.”

Nursing Home Abuse Affects All Americans

Nursing home neglect and elder abuse affect thousands of individuals. However, the damage associated with these issues is not confined to the elderly.

Recent studies have revealed that many nursing homes accused of neglect are overbilling taxpayers, with some facilities, termed “opportunistic systems,” overcharging Medicare by $4.3 billion. Since Medicare bills are covered by the Centers for Medicare and Medicaid Services (CMS), which is funded by U.S. tax dollars, these overcharges impact all American taxpayers.

Staffing has been another area of increasing concern for nursing home facilities, with the U.S. Department of Health and Human Services publishing a report earlier this year, which indicated that less than one-third of U.S. nursing homes have enough nurses on staff.

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DOJ Report to Congress Details Fight Against Nursing Home Neglect, Elder Abuse and Financial Fraud

Jefferson County Contractor Admits Aiding Financial Exploitation of Elderly Victim

For Immediate Release

U.S. Attorney's Office, Eastern District of Missouri

ST. LOUIS – A man from Jefferson County, Missouri on Wednesday admitted helping to defraud an elderly St. Louis woman out of more than $500,000.

Austin James, 27, of Hillsboro, St. Louis County, Missouri, pleaded guilty in U.S. District Court to one felony count of identity theft. He admitted knowingly possessing or using, without lawful authority, a means of identification of another person to commit bank fraud and the financial exploitation of the elderly.

James admitted aiding Gino Rives in exploiting the 80-year-old victim, who had hired Rives sometime before Jan. 17, 2021 to repair her roof for $7,500. Rives falsely claimed to be a licensed contractor and the victim hired him to renovate the interior of her home. Rives told the woman to write checks to himself, James and others that totaled more than $550,000 for renovations on the one-bedroom, one-bath, 1,100 square-foot home that was worth no more than $135,000 in 2021. James received eight checks totaling $94,606 between January 2021 and March 2023 for purportedly performing work on the victims, kitchen, bedroom, bathroom, basement and foundation. But he did not do the work for which he had been paid.

Due to the volume of checks being written on the victim's account and being cashed by Rives, James and others, her bank contacted the St. Louis City Building Inspector’s Office, which determined that any work done on the house was worth no more than $50,000, if it included and plumbing or electrical work. 

Rives, 36, of Edmundson, in St. Louis County, pleaded guilty last year and admitted defrauding two elderly victims. He and his mother, Zella Rives, pleaded guilty to separate charges this year and admitted falsely claiming that Rives was too disabled to work. They are scheduled to be sentenced next month.

James is scheduled to be sentenced on August 14. The charge carries a penalty of up to 15 years in prison, a fine of up to $250,000, or both prison and a fine.

The Social Security Administration Office of Inspector General and the U.S. Secret Service investigated the case. Assistant U.S. Attorney Tracy Berry is prosecuting the case.

Anyone with concerns about suspected abuse or neglect of the elderly or disabled should contact Missouri’s Adult Abuse and Neglect Hotline at 800-392-0210.

Contact

Robert Patrick, Public Affairs Officer, robert.patrick@usdoj.gov.

Updated May 1, 2024

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Jefferson County Contractor Admits Aiding Financial Exploitation of Elderly Victim

Man Pleads Guilty to International Money Laundering Linked to Nigerian Romance Scams and Business Email Compromises

For Immediate Release

Office of Public Affairs

A Florida man pleaded guilty yesterday in the Southern District of Florida to money laundering for his role in funneling the proceeds of scams against American consumers and businesses to co-conspirators located in Nigeria.

Niselio Barros Garcia Jr., 50, of Kissimmee, was indicted by a grand jury on July 12, 2023. According to court documents, Garcia supplied bank accounts to his co-conspirators for the purpose of receiving proceeds from romance scams, business email compromises and other fraud schemes. After receiving the criminal proceeds, Garcia used a cryptocurrency exchange to conceal and transfer the funds in Bitcoin to co-conspirators in Nigeria. Garcia personally laundered over $2.3 million of criminal proceeds and earned hundreds of thousands of dollars in fees.

Business email compromises involve criminals hacking or spoofing business email accounts to initiate fraudulent money transfers. Romance scams involve fraudsters creating fake online personas to gain the trust and affection of victims, leading to financial exploitation. These schemes not only cause significant financial losses, but also deeply impact the lives of victims.

“This prosecution demonstrates our ongoing commitment to protecting the public from complex financial crimes,” said Principal Deputy Assistant Attorney General Brian Boynton, head of the Justice Department’s Civil Division. “This case serves as a reminder of the sophisticated methods employed by criminals and the need for vigilance in the digital age. The Justice Department remains committed to aggressively pursuing individuals and groups involved in these kinds of illicit activities.”

Garcia is scheduled to be sentenced in the Southern District of Florida on April 23. He faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Four additional defendants have been charged in this scheme but remain at large.

The FBI Buffalo Field Office investigated the case.

Trial Attorneys Lauren Elfner and Matthew Robinson of the Civil Division’s Consumer Protection Branch are prosecuting the case.

If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available at the National Elder Fraud Hotline at 1-833-FRAUD-11 (1-833-372-8311). This Justice Department hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim and identifying relevant next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting, connect callers directly with appropriate agencies and provide resources and referrals on a case-by-case basis. Reporting is the first step. Reporting can help authorities identify those who commit fraud, and reporting certain financial losses due to fraud as soon as possible can increase the likelihood of recovering losses. The hotline is open Monday through Friday from 10:00 a.m. to 6:00 p.m. ET. English, Spanish and other languages are available.

For more information about the Consumer Protection Branch and its enforcement efforts, visit www.justice.gov/civil/consumer-protection-branch. Information about the Justice Department’s Elder Fraud Initiative is available at www.justice.gov/elderjustice.

Updated January 30, 2024

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Man Pleads Guilty to International Money Laundering Linked to Nigerian Romance Scams and Business Email Compromises

Justice Department intensifies efforts to protect seniors from fraud

by Mathew Richards

HOUSTON, Texas — The Department of Justice (DOJ) has reported significant strides in its year-long campaign to shield seniors from fraud and exploitation, with plans to expand its Transnational Elder Fraud Strike Force.

In the past year, the DOJ in collaboration with law enforcement partners, has addressed a wide range of issues, from mass-marketing scams affecting thousands of victims to local fraudsters. There have also been considerable efforts to reimburse victims of fraud. Attorney General Merrick B. Garland emphasized the department's commitment to protecting seniors, stating, “We are intensifying our efforts nationwide to protect older adults...This expansion builds on the Justice Department’s existing work to hold accountable those who steal funds from older adults, including by returning those funds to the victims where possible.”

U.S. Attorney Jennifer B. Lowery echoed Garland's sentiments, expressing disappointment in the frequency of senior citizens falling victim to fraud and abuse. She affirmed the department's dedication to holding scammers accountable and preserving the dignity of the aging community.

Between September 2021 and September 2022, the DOJ and its partners pursued approximately 260 cases involving over 600 defendants. In the Southern District of Texas (SDTX), federal grand juries returned indictments in 10 cases involving more than 15 defendants, with losses amounting to approximately $38 million from elderly victims throughout the district.

The SDTX has also been proactive in community outreach, raising awareness about scams and exploitation to prevent victimization. This includes a podcast in Spanish for elderly citizens, conducted in conjunction with AARP and FBI, with more planned this year.

The DOJ also announced the expansion of the Transnational Elder Fraud Strike Force, adding 14 new U.S. Attorney’s Offices. This move is expected to enhance coordination in combating large-scale fraud schemes that target or disproportionately impact older adults.

In the past year, the DOJ has notified over 550,000 people that they may be eligible for remission payments, particularly those who fell victim to “sweepstakes” or “astrology” solicitations that falsely promised prizes.

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Justice Department intensifies efforts to protect seniors from fraud

U.S. Attorney's Office For The Western District of North Carolina Takes Part In Department's Wide-Ranging Efforts To Protect Older Adults

Department of Justice

U.S. Attorney’s Office

Western District of North Carolina

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FOR IMMEDIATE RELEASE

Tuesday, October 4, 2022

 

U.S. Attorney's Office For The Western District of North Carolina Takes Part In Department's Wide-Ranging Efforts To Protect Older Adults

CHARLOTTE, N.C. – U.S. Attorney Dena J. King joins the Justice Department in announcing today the results of the Department’s efforts over the past year to protect older adults from fraud and exploitation. During the past year, the Department and its law enforcement partners tackled matters that ranged from mass-marketing scams that impacted thousands of victims to bad actors scamming their neighbors. Substantial efforts were also made over the last year to return money to fraud victims. Today, the Department also announced it is expanding its Transnational Elder Fraud Strike Force to amplify efforts to combat scams originating overseas.

“We are intensifying our efforts nationwide to protect older adults, including by more than tripling the number of U.S. Attorneys’ offices participating in our Transnational Elder Fraud Strike Force dedicated to disrupting, dismantling and prosecuting foreign-based fraud schemes that target American seniors,” said Attorney General Merrick B. Garland. “This expansion builds on the Justice Department’s existing work to hold accountable those who steal funds from older adults, including by returning those funds to the victims where possible.”

“Financial predators view older adults as a target rich environment,” said U.S. Attorney King. “The increased presence of elderly individuals online offers ample opportunities for fraudsters to perpetrate financial scams on older victims and steal their hard-earned money. Investigating and prosecuting bad actors who engage in the financial exploitation of older Americans is a priority for my office. I also urge older adults, family members, and caretakers to be on the lookout for schemes targeting the elderly. Prevention and education is the best way to ensure older adults are protected from this appalling criminal activity. Reporting financial scams is equally important. If you are the victim of a scam or suspect an older individual is being financially victimized take action and report the fraud,” King added.  

During the period from September 2021 to September 2022, Department personnel and its law enforcement partners pursued approximately 260 cases involving more than 600 defendants, both bringing new cases and advancing those previously charged. During that time frame, the U.S. Attorney’s Office in the Western District of North Carolina has taken federal action through the filing of criminal or civil cases involving financial schemes that targeted or largely affected seniors.

In August 2022, a Liberian national was sentenced to 10 years in prison for his role in an online romance scam that targeted older adults. In June 2022, a home health provider was ordered to serve 45 months in prison for stealing more than $1 million from two elderly clients. In March 2022, the U.S. Attorney’s Office announced the successful forfeiture and return of stolen cryptocurrency to an elderly individual victimized by a government imposter scam.  Additionally, in May 2022, the U.S. Attorney’s Office obtained a final forfeiture order for hundreds of thousands of dollars worth of cryptocurrency, which will be returned to an elderly victim of a romance/investment scheme. Furthermore, in December 2021, the Court ordered the forfeiture of a property purchased with the fraud proceeds perpetrated by the purported caregivers of an elderly victim. In addition to securing prison sentences for the perpetrators of the fraud, the Justice Department agreed to return the forfeited assets to the victim’s estate.

As part of its efforts to stem the tide of elder financial fraud, the U.S. Attorney’s Office continues to engage in outreach to the community to raise awareness about financial scams. Last week, U.S. Attorney King hosted a scam alert seminar at the Rutherford County Senior Center, during which participants were presented important information about financial fraud. Following the presentation, the participants engaged in a game of “Fraud Bingo,” a fun activity designed to deliver information and practical tips on how to prevent the financial exploitation and victimization of older adults by scammers.

The Department also highlighted three other efforts: expansion of the Transnational Elder Fraud Task Force, success in returning money to victims and efforts to combat grandparent scams. 

The Department announced that as part of its continuing efforts to protect older adults and bring perpetrators of fraud schemes to justice it is expanding the Transnational Elder Fraud Strike Force, adding 14 new U.S. Attorney’s Offices. Expansion of the Strike Force will help to coordinate the Department’s ongoing efforts to combat largest and most harmful fraud schemes that target or disproportionately impact older adults.

In the past year, the Department has notified over 550,000 people that they may be eligible for remission payments. Notifications were made to consumers whose information was sold by one of three data companies prosecuted by the Department and were later victims of “sweepstakes” or “astrology” solicitations that falsely promised prizes or individualized services in return for a fee. More than 150,000 of those victims cashed checks totaling $52 million, and thousands more are eligible to receive checks. Also notified were consumers who paid fraudsters perpetrating person-in-need scams and job scams via Western Union. In the past year, the Department has identified and contacted over 300,000 consumers who may be eligible for remission. Since March of 2020 more than 148,000 victims have received more than $366 million as a result of a 2017 criminal resolution with Western Union for the company’s willful failure to maintain an effective anti-money laundering program and its aiding and abetting of wire fraud.

Over the past year, the Department pursued cases against the perpetrators of “grandparent scams,” otherwise known as “person-in-need scams.” These scams typically begin when a fraudster, often based overseas, contacts an older adult and poses as either a grandchild, other family member or someone calling on behalf of a family member. Call recipients are told that their family member is in jeopardy and is urgently in need of money. When recently sentencing one of eight perpetrators of a grandparent scam indicted under the Racketeer Influenced and Corrupt Organizations Act, a federal judge described such scams “heartbreakingly evil.” The Department is working with government partners and others to raise awareness about these schemes.

Reporting from consumers about fraud and fraud attempts is critical to law enforcements efforts to investigate and prosecute schemes targeting older adults. If you or someone you know is age 60 or older and has been a victim of financial fraud, help is available the National Elder Fraud Hotline: 1-866 FRAUD-11 (1-833-372-8311). This Department of Justice Hotline, managed by the Office for Victims of Crime, is staffed by experienced professionals who provide personalized support to callers by assessing the needs of the victim and identifying next steps. Case managers will identify appropriate reporting agencies, provide information to callers to assist them in reporting or connect them with agencies, and provide resources and referrals on a case-by-case basis. The hotline is staffed seven days a week from 6:00 a.m. to 11:00 p.m. ET. English, Spanish and other languages are available. More information about the Department’s elder justice efforts can be found on the Department’s Elder Justice website, www.elderjustice.gov.

Some of the cases that comprise today’s announcement are charges, which are merely allegations, and the defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Source:
U.S. Attorney's Office For The Western District of North Carolina Takes Part In Department's Wide-Ranging Efforts To Protect Older Adults

 

U.S. Attorney Romero Announces a Dozen Social Security Fraud Cases Charged as Part of Targeted Effort to Crack Down on Benefit Theft

Department of Justice

U.S. Attorney’s Office

Eastern District of Pennsylvania

 

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FOR IMMEDIATE RELEASE

Monday, October 3, 2022

 

U.S. Attorney Romero Announces a Dozen Social Security Fraud Cases Charged as Part of Targeted Effort to Crack Down on Benefit Theft

PHILADELPHIA – United States Attorney Jacqueline C. Romero announced that so far this year, the Office of the U.S. Attorney for the Eastern District of Pennsylvania has charged no less than a dozen cases involving Social Security fraud, either by Information or Indictment, with nine of those defendants pleading guilty to those charges. The charges are the result of a concerted effort to investigate, prosecute and deter theft of government funds, primarily by way of stealing the Social Security payments of a deceased beneficiary. Altogether, the fraud loss amount in these cases totals nearly $1 million.

Defendants charged and their status are:

• Sloan Carter, 59, of Philadelphia, Pennsylvania; charged by Information on August 2, 2022, with theft of government funds; pleaded guilty on September 7, 2022;
• Marcus Ecks, 38, of Langhorne, Pennsylvania; charged by Information on June 28, 2022, with theft of government funds; pleaded guilty on September 8, 2022;
• Anthony Percell, 54, of Philadelphia, Pennsylvania; charged by Indictment on August 9, 2022, with social security fraud, passport fraud, identity theft, and related charges; scheduled for trial early next year;
• Angel Guilbe, Jr., 53, of Philadelphia, Pennsylvania; charged by Information on August 17, 2022, with theft of government funds; pleaded guilty on September 19, 2022;
• Stephanie Rudnick, 52, of Plymouth Meeting, Pennsylvania; charged by Information on May 19, 2022, with theft of government funds; pleaded guilty on June 7, 2022;
• Lilian Rogers, 58, of Glenolden, Pennsylvania; charged by Information on March 4, 2022, with theft of government funds; pleaded guilty on April 27, 2022;
• Dana Douglas-Rodriguez, 40, of Philadelphia, Pennsylvania; charged by Indictment on April 6, 2021, with wire fraud and social security fraud; pleaded guilty to social security fraud on May 3, 2022;
• Paulette Tamburro, 55, of Collingswood Heights, New Jersey; charged by Information on December 15, 2021, with theft of government funds; pleaded guilty on May 4, 2022;
• Michael Smith, 62, of Tobyhanna, Pennsylvania; charged by Information on September 2, 2022, with theft of government funds;
• Aracelis Quinones-Martinez, 52, of Lebanon, Pennsylvania; charged by Information on August 24, 2022, with theft of government funds;
• Ivan Wallace, 60, of Philadelphia, Pennsylvania; charged by Indictment on September 16, 2021, with wire fraud and social security fraud; pleaded guilty to social security fraud on September 28, 2022;
• Christopher Miller, 59, of Wernersville, Pennsylvania; charged by Information on September 20, 2022, with theft of government funds.

As an initiative to increase federal Social Security fraud prosecutions, the Social Security Administration (SSA) provides DOJ with attorneys who are sworn in and serve as Special Assistant United States Attorneys (SAUSA) in multiple U.S. Attorney’s Offices throughout the country. The SAUSA’s focus is solely to prosecute Social Security fraud. The goal of this initiative is to increase the number of prosecutions for fraud involving Social Security programs.  

“Social Security benefits are intended to help Americans who have worked hard and need some extra help making ends meet,” said U.S. Attorney Romero. “Thieves who take these funds fraudulently are taking advantage of American workers and taxpayers who fund these programs. Thanks to our partnership with SSA, our Office has dedicated prosecutors who are making a difference bringing these fraudsters to justice.”

“Our work to protect Social Security programs and taxpayers’ funds from criminals is one of our highest priorities. We will continue to pursue those who seek to defraud SSA, and we rely heavily on the SAUSAs to prosecute Social Security fraud, which is a federal crime,” said Gail S. Ennis, Inspector General for the Social Security Administration. “I thank the U.S. Attorney’s Office and SAUSAs Laura Bradbury and Megan Curran for their efforts in prosecuting these cases and holding these persons accountable for their criminal actions.”  

These cases were investigated by the Social Security Administration Office of Inspector General, and are being prosecuted by Special Assistant United States Attorneys Laura Bradbury and Megan Curran.

Source:
U.S. Attorney Romero Announces a Dozen Social Security Fraud Cases Charged as Part of Targeted Effort to Crack Down on Benefit Theft

Leader of International Robocall Scam Sentenced for Defrauding Over 4,000 U.S. Victims Out of More Than $10 Million

Department of Justice

U.S. Attorney’s Office

Eastern District of Virginia

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FOR IMMEDIATE RELEASE

Thursday, September 16, 2021

Leader of International Robocall Scam Sentenced for Defrauding Over 4,000 U.S. Victims Out of More Than $10 Million

RICHMOND, Va. – An Indian national was sentenced today to 22 years in prison for conspiracy and identity theft in connection with his operation of an overseas robocall scam that defrauded thousands of victims out of more than $10 million.

“This defendant has been sentenced to 22 years in prison for being the mastermind and leader of an extensive multimillion-dollar robocall scheme that, from overseas, exploited over 4,000 American victims,” said Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia. “The impact of the harm inflicted on the victims of these robocall schemes can be devastating. The victims, many of whom are elderly, continue to endure significant financial hardship from the defendant’s vast fraud enterprise. The defendant operated and supervised the call center, was the ‘closer’ when speaking to victims, and managed the money couriers who illegally sent millions of stolen and hard-earned funds belonging to the victims back to his call center. When you consider the sheer number of victims this defendant extorted and the magnitude of their losses, the scale of harm and pain he caused is enormous. As this case demonstrates, we will continue to work closely with our partners to investigate, apprehend, and prosecute transnational criminal enterprises that steal from vulnerable American victims, and will bring the perpetrators of these scams to justice no matter where they are located.”

According to court documents, Shehzadkhan Pathan, 40, operated a call center in Ahmedabad, India, from which automated robocalls were made to victims in the United States. After establishing contact with victims through these automated calls, Pathan and other “closers” at his call center would coerce, cajole, and trick victims into sending bulk cash through physical shipments and electronic money transfers. Pathan and his conspirators used a variety of schemes to convince victims to send money, including impersonating law enforcement officers from the Federal Bureau of Investigation (FBI) and Drug Enforcement Administration (DEA) and representatives of other government agencies, such as the Social Security Administration, to threaten victims with severe legal and financial consequences. Conspirators also convinced victims to send money as initial installments for falsely promised loans.

“Fraud targeting the elderly has a uniquely harmful effect on a segment of the population that is often amongst society's most vulnerable. This conspiracy, which defrauded over 4,000 victims, many of whom were elderly, out of at least $10 million, is again an unfortunate reminder of the type of devastation these fraud schemes can wreak,” said Wayne A. Jacobs, Special Agent in Charge of the FBI Washington Field Office Criminal/Cyber Division. “Pathan, a leader of this scheme, which relied on impersonating law enforcement to threaten victims, is the 4th individual sentenced in this investigation and represents a step forward in our efforts to hold those who engage in these scams accountable to the fullest extent of the law. The FBI's work in this area is far from over as we remain steadfast in our commitment to relentlessly pursue these types of investigations to ensure the protection of the hard-earned livelihood of our nation's elderly.”

In addition to operating the call center, Pathan recruited and supervised a multitude of money couriers, whom he directed to receive money sent by victims. Pathan’s network of money couriers was located in multiple states, including but not limited to Virginia, New Jersey, Minnesota, Texas, California, South Carolina, and Illinois. Pathan assigned various aliases to these individuals and supplied them with hundreds of counterfeit identification documents to facilitate their receipt of victim cash shipments and money transfers. Pathan then directed the couriers to send the money to himself and other conspirators through various means, including cash deposits into numerous bank accounts and via informal money transmitters known as Hawalas.

Pathan is the fourth of six defendants in this case to be sentenced for their role in the conspiracy. Co-defendants Pradipsinh Parmar, 41, and Sumer Patel, 38, both of Ahmedabad, India, acted as money couriers during the conspiracy, and are scheduled to be sentenced on September 20.    

Combatting elder abuse and financial fraud targeted at seniors is a key priority of the Department of Justice. Elder abuse is an intentional or negligent act by any person that causes harm or a serious risk of harm to an older adult. It is a term used to describe five subtypes of elder abuse: physical abuse, financial fraud, scams and exploitation, caregiver neglect and abandonment, psychological abuse, and sexual abuse. Elder abuse is a serious crime against some of our nation’s most vulnerable citizens, affecting at least 10 percent of older Americans every year. Together with our federal, state, local, and tribal partners, the Department of Justice is steadfastly committed to combatting all forms of elder abuse and financial exploitation through enforcement actions, training and resources, research, victim services, and public awareness. This holistic and robust response demonstrates the Department’s unwavering dedication to fighting for justice for older Americans.

Raj Parekh, Acting U.S. Attorney for the Eastern District of Virginia, and Wayne A. Jacobs, Special Agent in Charge of the FBI Washington Field Office Criminal Division, made the announcement after sentencing by Senior U.S. District Judge Henry E. Hudson.

The Eden Prairie, Minnesota, Police Department provided significant assistance with this investigation.

Assistant U.S. Attorneys Brian R. Hood and Kaitlin G. Cooke are prosecuting the case.

A copy of this press release is located on the website of the U.S. Attorney’s Office for the Eastern District of Virginia. Related court documents and information are located on the website of the District Court for the Eastern District of Virginia or on PACER by searching for Case No. 3:19-cr-160.

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Leader of International Robocall Scam Sentenced for Defrauding Over 4,000 U.S. Victims Out of More Than $10 Million

Owner of Texas Chain of Hospice Companies Sentenced for $150 Million Health Care Fraud and Money Laundering Scheme

Department of Justice

Office of Public Affairs

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FOR IMMEDIATE RELEASE

Wednesday, December 16, 2020

 

A corporate executive has been ordered to serve 20 years in prison after his conviction related to falsely telling thousands of patients with long-term incurable diseases, such as Alzheimers and dementia, they had less than six months to live and subsequently enrolling them in hospice programs.   

A federal jury in McAllen, Texas, convicted Rodney Mesquias, 48, of San Antonio, Texas. The one-month trial in November 2019 was one of the first criminal hospice fraud prosecutions the Department of Justice has presented to a federal jury.    

Today, U.S. District Court Judge Rolanda Olvera ordered Mesquias to serve a total of 240 months in federal prison and to pay $120 million in restitution.

“Mesquias funded his lavish lifestyle by exploiting patients with long-term, incurable diseases by enrolling them in expensive but unnecessary hospice services,” said Acting Assistant Attorney General Brian C. Rabbitt of the Justice Department’s Criminal Division.  “This significant sentence represents the department’s continued commitment to pursue those who orchestrate and commit healthcare fraud schemes.”

“Financial healthcare fraud is abhorrent enough, but to fraudulently diagnose patients with dementia or Alzheimer’s is the pinnacle of medical cruelness to both the patient and their family,” said U.S. Attorney Ryan K. Patrick of the Southern District of Texas. “They falsely gave patients life ending diagnosis and they will pay the price with years behinds bars.”

“Families seek to give comfort and support to their ailing loved ones when all other medical options are gone,” said Special Agent in Charge Christopher Combs of the FBI’s San Antonio Division. “It is unconscionable and evil to prey upon the most vulnerable in our community to commit fraud against government-funded programs. The FBI is committed to protecting our communities from those who may not have the strength to protect themselves.”

“Mesquias’ scheme included paying kickbacks to physicians and fraudulently enrolling vulnerable beneficiaries in hospice care that prevented them from accessing curative care – all done to steal millions of dollars from Medicare to fund lavish personal spending,” said Special Agent in Charge Miranda L. Bennett of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Dallas Region. “This victimization is intolerable, and our investigators and law enforcement partners will continue to work hard to bring such criminals to justice and to protect those relying on federal health care programs.”

Mesquias and his co-conspirator Henry McInnis, 48, were both convicted of one count each of conspiracy to commit health care fraud, conspiracy to commit money laundering and conspiracy to obstruct justice as well as six counts of health care fraud. Mesquias was separately convicted on one count of conspiracy to pay and receive kickbacks. 

From 2009 to 2018, Mesquias orchestrated a scheme that involved $150 million in false and fraudulent claims for hospice and other health care services. Mesquias owned and controlled the Merida Group, a large health care company that operated dozens of locations throughout Texas.

According to evidence presented at trial, Mesquias and the Merida Group adopted a strategy to market their hospice programs as providing medical benefits “you don’t have to die to use.” They also aggressively enrolled patients with long-term incurable diseases, such as Alzheimers and dementia, and limited mental capacity who lived at group homes, nursing homes and in housing projects.

In some instances, Merida Group marketers falsely told patients they had less than six months to live and sent chaplains to lie to the patients. They also discussed last rites and preparation for their imminent death.

Hospice services require patients to be suffering from a terminal illness expected to result in death within six months. Not only were patients not in such circumstances, they were walking, driving, working and even coaching athletic sporting events in some instances. However, Mesquias and others kept patients on services for multiple years in order to increase revenue.

Placing patients on such palliative hospice care meant they were unable to obtain medical coverage for curative medical services. 

Mesquias also fired employees who refused to go along with the fraud. He often  directed them not to “[expletive] with his patients or [expletive] with his money” by discharging patients from services. One co-conspirator said with respect to hospice patients “the way you make money is by keeping them alive as long as possible.” This included engaging in surgical and other medical interventions that were designed to extend life through the use of medical technologies, according to trial testimony.

The evidence further established Mesquias obstructed justice by causing the creation of false and fictitious medical records. Further, Mesquias produced them to a federal grand jury in order to attempt to avoid indictment. The records added false diagnostic information, making it appear that patients were dying when, in fact, they were not.

Mesquias also was convicted in connection with laundering the proceeds of the fraud. The jury found they used monies to purchase expensive vehicles such as a Porsche, expensive jewelry, luxury clothing from high-end retailers such as Louis Vuitton, exclusive real estate, season tickets for premium sporting events and a security detail and bottle service at high-end Las Vegas nightclubs. Mesquias also treated physicians to lavish parties at these elite nightclubs, providing them with tens of thousands of dollars in alcohol and other perks in exchange for medically unnecessary patient referrals.

McInnis will be sentenced at a later date. Two other co-conspirators have pleaded guilty and are awaiting sentencing.

The Department of Health and Human Service – Office of Inspector General (DHHS-OIG); FBI and Texas Health and Human Services Commission conducted the investigation. Assistant Chief Jacob Foster and Trial Attorney Kevin Lowell of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Andrew Swartz of the Southern District of Texas are prosecuting the case. 

The Fraud Section leads the Health Care Fraud Strike Force. Since its inception in March 2007, the Health Care Fraud Strike Force, which maintains 15 strike forces operating in 24 districts, has charged more than 4,200 defendants who have collectively billed the Medicare program for nearly $19 billion. In addition, DHHS Centers for Medicare & Medicaid Services, working in conjunction with the DHHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

The year 2020 marks the 150th anniversary of the Department of Justice. Learn more about the history of our agency at www.Justice.gov/Celebrating150Years.

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Owner of Texas Chain of Hospice Companies Sentenced for $150 Million Health Care Fraud and Money Laundering Scheme

DOJ Crackdown on Nursing Homes to Include Criminal Counts

Federal prosecutors are looking to add criminal charges in fraud and elder abuse cases brought against nursing homes and staff.

Photographer: David Paul Morris/Bloomberg

The Department of Justice is making a push this fall to identify criminal charges that can be brought alongside civil actions against nursing homes and staff accused of abusing and defrauding elderly patients, DOJ attorneys told Bloomberg Law.

The attoneys say the agency is seeking to “amplify” the work of its Elder Justice Initiative, which was launched in 2018 to protect the nation’s elderly. Federal prosecutors will be looking at potential criminal charges such as wire fraud and health-care fraud when they uncover false claims for government reimbursements of care.

News of the Justice Department’s push for criminal charges is likely to raise alarm bells among the nation’s more than 15,000 nursing homes. One industry trade group said criminal charges are not the way to correct what it said are rare cases of poor care.

The Justice Department’s civil division has historically used the False Claims Act to pursue nursing homes that bill the federal government for services not rendered or care that is grossly substandard, said Andy Mao, deputy director of the commercial litigation branch of the DOJ’s Civil Division who heads the Elder Justice Initiative.

But in egregious cases, criminal charges may also be warranted, federal prosecutors say.

“We need to go after cases civilly because they a providing grossly substandard care and, in the appropriate case, refer it for a parallel criminal prosecution,” said Toni Bacon, an associate deputy attorney general.

“As America’s aging, it’s becoming a larger problem and we need to be able on the federal side to identify who is the worst of the worst,” she said.

There were 15,600 nursing homes in the U.S. as of 2016, according to data from the Centers for Disease Control and Prevention.

Almost all of them, 95.2%, were authorized or certified to participate in Medicaid in 2016, according to data from the National Center for Health Statistics. Participation rates were similarly high for adult day services centers (76.9%), home health agencies (78.4%), and residential care communities (48.3%).

Medicare generally does not cover long-term care, making Medicaid the most common source of reimbursement for nursing home care.

Criminal Interest

If a provider bills the Centers for Medicare & Medicaid Services for services that are not rendered, that false representation is often made through the mail or online, creating the potential for not only a violation of the False Claims Act, but a criminal wire fraud charge as well, a DOJ official said.

“I think there has not been quite as much criminal interest, but I hope that’s changing,” the official said. “We are collaborating with the consumer protection branch, which has indicated that they are willing to explore what criminal angles there may be.”

The agency earlier this month brought criminal embezzlement, health-care fraud, and wire fraud charges against a Connecticut woman accused of stealing $150,000 from the trust accounts of residents at Bridgeport Health Care Center and Bridgeport Manor, two nursing and rehabilitation facilities.

Poor-quality care is a common problem in nursing homes with inadequate staffing levels and untrained staff, said Eric Carlson, directing attorney at Justice in Aging, a nonprofit legal advocacy organization that fights senior poverty.

“That’s where you see the bed sores and infections, the malnutrition and some of the other unfortunately common issues that arise in nursing facilities,” he said.

Carlson welcomes the DOJ crackdown on bad actors. The agency needs to be aggressive, he said.

“If something meets the standard for a criminal violation, it should be prosecuted as a criminal charge,” Carlson said.

Early Opposition

Not everyone agrees.

The American Health Care Association, which bills itself as the nation’s largest association of long-term and post-acute care providers, said instances of abuse, neglect, and fraud are rare and that “the overwhelming majority of nursing home staff provide high-quality resident care.”

“Criminalizing poor quality is not the answer,” David Gifford, AHCA’s senior vice president of quality and regulatory affairs and chief medical officer, said in a statement to Bloomberg Law.

The AHCA said it has been working with health-care providers and other interested parties to identify reforms that will “further improve the lives of America’s elderly, including policies that help facilities retain more high-quality staff, bring more transparency to abuse and neglect reporting, and provide consumers additional information to help them make informed decisions.”

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DOJ Crackdown on Nursing Homes to Include Criminal Counts

International telemarketing fraud sees man convicted for scamming the elderly out of $10 million

by Dylan Gibbons

According to a U.S. Department of Justice (DOJ) press release on August 20, a telemarketer has been sentenced to 63 months in prison followed by three years of supervised release for his involvement in a $10 million telemarketing scheme that stole money from primarily elderly victims in the U.S. through his call centers in Costa Rica.

“Carlin Woods, 35, of Merrillville, Indiana, was sentenced by U.S. District Judge Max Cogburn Jr. of the Western District of North Carolina,” the DOJ said. “Woods pleaded guilty on May 15, 2017, to one count of conspiracy to commit wire fraud, one count of wire fraud and one count of conspiracy to commit money laundering.”

As part of his plea agreement, Woods admitted to working in a call center where co-conspirators falsely posed as U.S. employees of various government agencies to convince his mostly elderly and vulnerable victims that they had won a substantial “sweepstakes” prize. He and his co-conspirators, then, fraudulently told victims that up-front payments were required for a “refundable insurance fee” before receiving their prize.

According to the DOJ, they used various applications, such as “Voice over Internet Protocol (VoIP) technology” to obfuscate their locations and make it appear they were calling from a Washington, D.C. area code.

Acting as an authority figure or masquerading as a loved one, such as a grandchild, is a common tactic many fraudsters targeting the elderly use to gain trust in such cases. In the former instance, an official sounding department is enough; in the latter instance, fraudsters often say they’re the elderly person’s grandchild and then play a game of ‘guess who’ with the elderly person until they can take on the identity of one of the elderly’s actual relatives.

To receive payments, Woods utilized a system whereby victims would send money to Costa Rica or “through people in the United States who collected money from victims and forwarded the payment to Woods and others in Costa Rica, he admitted.”

When he was sentenced, it was determined that Woods and his co-conspirators stole more than $1.5 million from victims as a part of a larger network.

According to the DOJ, since President Trump signed the bipartisan Elder Abuse Prevention and Prosecution Act (EAPPA) into law, the DOJ has been able to participate in hundreds of additional criminal and civil cases that “targeted or disproportionately affected seniors.”

The DOJ says that this law enabled the DOJ to undergo the “largest elder fraud enforcement action in American history” in March alone, wherein more than 260 defendants were charged with some form of elder exploitation in a nationwide elder fraud sweep.

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International telemarketing fraud sees man convicted for scamming the elderly out of $10 million

Wisconsin DOJ Files Charges Against Minnesota Man for Allegedly Preying on Elderly in Wisconsin and 8 Other States

COTTAGE GROVE, Minn. – Today, Attorney General Brad Schimel announced the Wisconsin Department of Justice (DOJ) filed criminal charges against Matthew D. Erickson of Cottage Grove, Minn., for contracting to deliver snow removal services, and never completing those services for 111 victims nationwide, 28 in Wisconsin. Many of the victims were over the age of 60. The Elm Grove Police Department in Wisconsin and local law enforcement in Minnesota assisted DOJ with the arrest of Erickson today and he remains in custody in Minnesota, awaiting extradition to Wisconsin.

DOJ’s criminal complaint alleges that victims contracted with Erickson’s company, Snow Angels, for snow removal services, but the services were never completed. 111 victims have been identified nationwide, across the following states: Wisconsin, Connecticut, Illinois, Massachusetts, Maine, Michigan, Minnesota, New York, and Rhode Island. 28 victims are from Wisconsin, and reside in Waukesha, Milwaukee, Washington, and Racine counties. In Wisconsin, the total amount of restitution is currently $13,060; nationwide, the amount is in excess of $50,000.

A defendant in a criminal case is innocent until proven guilty. Relevant court filings are available below. This case is being prosecuted by DOJ Criminal Litigation Unit Assistant Attorney General Rich Chiapete.

If you have further information about Erickson or the company Snow Angels, please contact Wisconsin DOJ Consumer Protection investigators at (608) 266-8063.

Wisconsin Attorney General Brad Schimel launched the Attorney General’s Task Force on Elder Abuse in August 2017, charging the task force with compiling the resources and knowledge of a multi-disciplinary team of professionals to study the impact of elder abuse in Wisconsin and assess ways to improve outcomes for this growing population of citizens. In addition to developing strategies to address barriers in investigations and prosecutions of elder abuse, the task force will strengthen consumer protection for seniors and create recommendations for improved cross-system communications.

“Elder abuse is vastly underreported; only one in 44 cases of financial abuse is ever reported[1],” said Attorney General Schimel. “The Wisconsin Department of Justice is working hard to get resources out to communities, increase collaboration in order to better serve elderly victims, and hold criminals exploiting our loved ones accountable.”

In addition to the task force’s work, Attorney General Schimel has moved quickly to provide public safety tools to seniors and their loved ones. In October 2017, Attorney General Schimel expanded Dose of Reality, a statewide prevention campaign designed to raise awareness about prescription drug abuse and its effect on the opioid epidemic, to include resources and information unique to seniors and caregivers.

This year, the attorney general launched a radio ad campaign to raise awareness about elder abuse and encourage citizens to report abuse against seniors at Medicaid-funded or other senior care facilities. The attorney general also started “Safe Seniors Camera Program” a new pilot project in Brown, Outagamie, and Winnebago counties that allows Wisconsin residents, who suspect a caregiver is abusing their loved one, to use a covert camera to provide surveillance over someone who may have been harmed by a caregiver in their residence.

To report suspected financial, physical, emotional, or sexual abuse, please contact your county elder adult-at-risk agency or call 1-800-488-3780. If you witness an act of abuse, neglect, or exploitation that requires immediate attention, please call 911.

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Wisconsin DOJ Files Charges Against Minnesota Man for Allegedly Preying on Elderly in Wisconsin and 8 Other States

Western Union to pay $586 million to compensate senior fraud victims, others

Western Union will forfeit $586 million after admitting to the Justice Department that it aided and abetted wire fraud and did not maintain an effective program to deter money laundering. The money will be used to compensate victims of fraud and implement anti-fraud programs to protect older adults and others in the future.

The dollar amount is the largest forfeiture ever imposed on a money services business, according to the government, which announced agreements with the Englewood, CO-based company on Jan. 19. Several federal agencies were involved in the investigation.

Leaders of the Senate Special Committee on Aging praised the effort, saying that Western Union's actions “disproportionately affected aging Americans.” Those actions, according to investigators, enabled the proliferation of mass marketing schemes, illegal gambling, money laundering, human smuggling and drug trafficking. Hundreds of millions of dollars in prohibited transactions were processed, they said.

In some cases, government officials said, fraudsters contacted U.S. residents and falsely posed as family members in need, or they promised prizes or job opportunities. The scammers directed the victims to send money through Western Union to help a relative or claim their prize. Various company agents were complicit in these schemes, often processing payments in return for a cut of the proceeds, government officials said.

The company heard about fraudulent transactions more than a decade ago through reports made by customers but did not implement guidelines that its security department subsequently proposed for the disciplining, suspension or firing of agents involved in the deals, the Justice Department said. As part of its agreements with the DOJ, Federal Trade Commission and four U.S. attorneys' offices, Western Union said it will take steps to ensure that it complies with the law in the future.

“Americans have long been aware of ‘grandparent scams' that encourage victims to transfer funds to fake family members allegedly in need of assistance,” Sen. Susan Collins (R-ME), chairwoman of the Senate Aging Committee, said in a statement following the Justice Department announcement. “Our committee has worked to shine a spotlight on these criminals, and today's action by the FTC and DOJ will help bring protections and restitution for innocent victims.”

People who believe they were victims of the fraud scheme can visit the Department of Justice website for instructions on how to request compensation through the Victim Asset Recovery Program.

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Western Union to pay $586 million to compensate senior fraud victims, others

Judge Blocks Effort To Remove Kids From Nursing Homes

A federal judge in Fort Lauderdale, Fla. has tossed out of court a lawsuit filed three years ago by the U.S. Department of Justice that claimed Florida health administrators had acted with “deliberate indifference to the suffering” of children with disabilities who were being warehoused in nursing homes for lack of more appropriate accommodations with family members or in the community.

U.S. District Judge William J. Zloch never tackled the substantive dispute between federal civil rights lawyers and state health regulators. Rather, Zloch concluded the Justice Department lacked “standing” to sue the state. Zloch’s order said that, when Congress passed the landmark Americans with Disabilities Act in 1990, it did not grant the Justice Department authority to sue states or other “public entities” that it believes are violating the legislation.

Zloch’s order effectively guts a years-long effort by the DOJ and Florida civil rights attorneys to remove children with severe disabilities from nursing homes, where advocates claimed — and a good bit of the state’s own inspections showed — youngsters were being segregated with little access to education, socialization or family. Zloch neutered a similar lawsuit filed in 2012 by a Miami civil rights attorney when he declined to certify that children in nursing homes represented a “class.”

In an email, a publicist for the Tallahassee lawyers who represented Florida health regulators said Florida was the only state that “refused” to settle a civil rights suit claiming children with disabilities in institutions were being discriminated against. “A handful of states have settled such suits,” the statement said.

Matthew Dietz, the Miami lawyer whose suit prompted the DOJ to intervene, said in an email that Zloch’s order had “eviscerated 26 years of federal enforcement” of laws designed to end discrimination against people with disabilities by states or municipalities. He said hundreds of youngsters with disabilities now will either die, or grow up, in nursing homes along with frail elders.

“This renders the rights of these kids with disabilities a sham.”

In his order, Zloch said that the intent of the ADA was to “provide a clear and comprehensive national mandate for the elimination of discrimination against individuals with disabilities.”

But, the judge added, the portion of the law pertaining to other governments never explicitly granted the Justice Department the authority to sue other governments. Without such a mandate, Zloch wrote, the DOJ overstepped its bounds when it sued the Florida Agency for Health Care Administration, and other departments.

Zloch dismissed a host of arguments from the Justice Department, including its contention that affirming the DOJ’s lack of authority to sue states and municipalities will leave such governments free to openly discriminate. “Not so,” Zloch wrote. Private parties still may sue governments, making each of them a “private attorney general,” Zloch wrote.

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Judge Blocks Effort To Remove Kids From Nursing Homes

Feds Sue Over Kids In Nursing Homes

Federal officials are suing alleging that hundreds of children with disabilities are being unnecessarily segregated in nursing homes in violation of the Americans with Disabilities Act.

The U.S. Department of Justice filed suit Monday accusing the state of Florida of relegating nearly 200 children with significant disabilities to nursing homes who could be served at home or in other community-based settings.

Last September, the Justice Department warned Florida officials of ADA violations after an investigation found that state policies and practices limited access to in-home care for kids with significant medical needs leaving many families with little choice but to send their children to nursing homes. What’s more, the probe identified children who spent years at the facilities before receiving federally-mandated screening to assess whether or not the environment was the most appropriate for them.

Though the state made some changes since being notified of the investigation’s findings, federal officials said that after several months of negotiating, violations remain making legal action necessary.

“Children have a right to grow up with their families, among their friends and in their own communities,” said Eve Hill, deputy assistant attorney general for the Justice Department’s Civil Rights Division. “The violations the department has identified are serious, systemic and ongoing and require comprehensive relief for these children and their families.”

Kids living in nursing homes have limited interaction with individuals without disabilities and are often located hundreds of miles away from their families, according to the federal complaint.

In addition, the suit alleges that the state’s policies and practices put other children with significant medical needs who are currently living in the community at risk of similar institutionalization.

For their part, Florida officials said they have taken steps in the last year to improve an “already strong program” providing services for children with complex medical needs, indicating that more than 1,000 children are now receiving enhanced care services to help them return to or remain in the community.

“Today’s Obama administration action shows that Washington is not interested in helping families improve but instead is determined to file disruptive lawsuits with the goal of taking over control and operation of Florida’s Medicaid and disability programs,” said Elizabeth Dudek, secretary of Florida’s Agency for Health Care Administration, in a statement.

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Feds Sue Over Kids In Nursing Homes