DOJ Creates Veterans Affairs Health Care Fraud Task Force

The Department of Veterans Affairs Office of Inspector General (VA-OIG) and the Department of Justice have announced the establishment of the VA Health Care Fraud Task Force to combat fraud in VA’s expanding health care programs.

The Task Force combines VA-OIG’s substantial experience investigating health care fraud at VA with the Justice Department’s proven track record prosecuting health care fraud through its Medicare Fraud Strike Force, which resides within the Criminal Division’s Fraud Section.  The Task Force initially will focus on investigating and prosecuting health care fraud in VA’s growing Community Care program, under which eligible veterans may receive health care from a private provider in their community (rather than from a VA medical facility), similar to the Medicare program.  As part of the Task Force, a VA-OIG attorney will be detailed to serve as a special prosecutor in the Health Care Fraud Unit of the Fraud Section.

The VA operates the nation’s largest integrated health care system, providing care to approximately nine million veterans at over 1,200 medical facilities.  Beginning on June 6, 2019, the VA MISSION Act significantly increased veterans’ access to health care by expanding their ability to receive health care from approved non-VA providers (referred to as community care providers).  As with the Medicare program, these community care providers submit claims to the VA for payment for their services.

“It is beyond the pale when individuals commit fraud against health care programs designed to assist the men and women who have served in our nation’s military,” said Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division.  “This new Task Force leverages the proven success of the Department’s Strike Force model and will aggressively target fraud in the VA’s expanding health care programs.”

“Combating health care fraud is one of our highest priorities at VA-OIG,” said VA Inspector General Michael J. Missal.  “Our agents in the VA-OIG are experts at detecting and investigating health care fraud in VA’s complex and diverse health care system.  We are enthusiastic about the opportunity to tap into the wealth of knowledge and expertise of DOJ and the Medicare Fraud Strike Force, particularly in the fee-for-service environment.  As the VA MISSION Act expands VA’s Community Care program, this is one of those rare opportunities in government where we can be proactive and get ahead of the curve by partnering with the Fraud Section and leveraging its proven strategies for combating fraud in the Medicare program.  This Task Force sends a clear message to anyone considering committing health care fraud at VA – we will protect our veterans’ health care system at all costs.”

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In coordination with the recently announced Medicare Fraud Strike Force enforcement actions, VA-OIG partnered with the Department to bring charges in cases impacting VA’s health care programs in August and September 2019.  These cases are being investigated by agents from the FBI, HHS-OIG, IRS-CI and other federal law enforcement agencies and are being prosecuted by the Fraud Section.

Among those charged are the following:

In the Northern District of Texas:

Jamshid Noryian, Dehshid Nourian, Christopher Rydberg, Leyla Nourian, Ashraf Mofid, Leslie Benson, Michael Taba and Ali Khavarmanesh were charged for their alleged participation in a scheme to defraud the Department of Labor-Office of Worker’s Compensation and Blue Cross Blue Shield and conspiracies to launder money and evade the payment of taxes through Ability Pharmacy, Industrial & Family Pharmacy and Park Row Pharmacy, all located in the Dallas/Fort Worth area of Texas.  As part of the scheme, the defendants allegedly provided unnecessary and expensive creams to VA employees and employees of other federal agencies, that were billed to DOL-OWCP.  The case was investigated by the VA-OIG, USPS-OIG, DOL-OIG and IRS-CI and is being prosecuted by Assistant Chief Adrienne Frazior of the Fraud Section.

Nilesh Patel, Craig Henry and Bruce Henry were charged for their alleged participation in a scheme to defraud TRICARE through marketing company RxConsultants and a compounding pharmacy located in Fort Worth, Texas.  The case was investigated by the VA-OIG, FBI and HHS-OIG and is being prosecuted by Trial Attorney Carlos Lopez of the Fraud Section.

In the Southern District of Mississippi:

Wade Ashley Walters, 52, of Hattiesburg, Mississippi, a co-owner of numerous compounding pharmacies and pharmaceutical marketing companies, was charged for his alleged role in a scheme to defraud TRICARE and other private health insurance companies by paying kickbacks to practitioners and marketers for the prescribing and referring of fraudulent prescriptions for medically unnecessary compounded medications that were ultimately dispensed by his pharmacies, as well as for his alleged role in a scheme to launder the proceeds of the fraud scheme.  The indictment alleges that, based on these fraudulent prescriptions, Walters caused TRICARE and other health care benefit programs to reimburse his and other compounding pharmacies more than $510 million.  Assistant Deputy Chief Dustin Davis and Trial Attorney Sara Porter of the Fraud Section, Trial Attorneys Amanda Wick and Stephanie Williamson of the Criminal Division’s Money Laundering and Asset Recovery Section, and Assistant U.S. Attorney Mary Helen Wall of the Southern District of Mississippi are prosecuting the case.

Gregory Auzenne, M.D., 49, and Tiffany Clark, 45, both of Meridian, Mississippi, were charged for their alleged participation in a scheme to defraud TRICARE and other private health insurance companies by prescribing medically unnecessary compounded medications in exchange for kickbacks and bribes.  The indictment alleges that Auzenne and Clark caused the submission of over $1.6 million in fraudulent claims to TRICARE.  Trial Attorneys Jared Hasten and Sara Porter of the Fraud Section and Assistant U.S. Attorney Mary Helen Wall are prosecuting the case.

A complaint, information or indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

The VA OIG conducts oversight of VA programs and operations, providing independent and objective reporting to VA and Congress in order to prevent and detect fraud, waste and abuse, as well as enhance VA’s integrity, efficiency and effectiveness.  To report potential fraud, waste, mismanagement, or other abuse, contact the VA OIG Hotline at www.va.gov/oig/hotline/default.asp.

The Fraud Section leads the Medicare Fraud Strike Force, which maintains 15 strike forces operating in 24 districts.  The Medicare Fraud Strike Force is a partnership among DOJ’s Criminal Division, U.S. Attorney’s Offices, the FBI and the Department of Health and Human Services Office of Inspector General (HHS-OIG).  Since its inception in March 2007, the Medicare Fraud Strike Force has charged over 4,200 defendants who have collectively billed the Medicare program for more than $19 billion.