Two owners of Guam Medical Transport (GMT) were sentenced to prison terms today for their roles in a health care fraud and money laundering scheme that resulted in a loss to the United States of approximately $10.8 million, one of the largest single Medicare ambulance fraud cases ever prosecuted by the Justice Department.
Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Shawn N. Anderson of the Districts of Guam and the Northern Mariana Islands, Special Agent in Charge Eli S. Miranda of the FBI’s Honolulu Field Office, Special Agent in Charge Justin Campbell of IRS Criminal Investigation (IRS-CI) Seattle Field Office and Special Agent in Charge Timothy DeFrancesca of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) Los Angeles Regional Office made the announcement.
U.S. District Judge Frances Tydingco-Gatewood of the District of Guam sentenced Clifford P. Shoemake, 63, of Guam, and Kimberly Clyde “Casey” Conner, 60, of Saipan, to serve 71 and 63 months, respectively, in federal prison in connection with their Oct. 29, 2019, guilty pleas to one count of conspiracy to commit health care fraud and one count of conspiracy to engage in monetary transactions with the proceeds of specified unlawful activity. Judge Tydingco-Gatewood also ordered the defendants to pay $10,884,964.49 in restitution and to forfeit the same amount.
Medicare and TRICARE are federal health benefit programs which, under certain specified conditions, reimburse providers for medically necessary, non-emergency, scheduled ambulance transportation to and from dialysis treatments, provided to beneficiaries with end stage renal disease (ESRD). Ambulance services are medically necessary when provided to such beneficiaries who cannot be transported by any other means without endangering their health, or were bed confined before, during and after the transportation.
According to their admissions at the plea hearing, from approximately March 11, 2010, to approximately March 21, 2014, the defendants engaged in a conspiracy to defraud Medicare and TRICARE by submitting claims for reimbursement for medically unnecessary ambulance services that GMT provided to patients with ESRD. The defendants admitted they were aware that GMT was transporting patients who did not qualify for ambulance transportation under applicable Medicare and TRICARE regulations and guidelines, with which they had failed to familiarize themselves. Specifically, the defendants admitted they were aware that many of GMT’s patients were not bed-confined, and did not have acute medical conditions that would otherwise qualify them for ambulance transportation.
As part of the scheme, the defendants directed GMT employees to remove from internal documents references to GMT patients’ ability to walk because they knew that Medicare and TRICARE would not provide reimbursement for the patients. The defendants further admitted they were aware of, but failed to address, concerns about GMT’s Medicare and TRICARE billing practices raised by other GMT employees. According to court documents, GMT submitted claims to Medicare totalling approximately $32 million during the course of the scheme. The conspiracy resulted in improper payments to GMT of approximately $10.8 million, the defendants admitted.
The defendants further admitted to conspiring to engage in money transactions involving the proceeds of their health care fraud scheme. Specifically, they admitted that they used the proceeds of their health care fraud scheme to pay for personal expenses, such as vacations, personal income taxes, a personal residence and other items. They then caused these expenses to be falsely categorized as business expenses of GMT, thereby improperly reducing GMT’s taxable income and GMT’s corresponding tax liability, they admitted.
This case was investigated by the FBI, IRS and HHS-OIG. Senior Litigation Counsel John A. Michelich and Trial Attorney Michael McCarthy of the Criminal Division’s Fraud Section and First Assistant U.S. Attorney Marivic David of the District of Guam and the Northern Mariana Islands prosecuted the case.
The Fraud Section leads the Medicare Fraud Strike Force. Since its inception in March 2007, the Medicare 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 approximately $19 billion. In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-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.