A health care CEO pleaded guilty today to a superseding indictment as part of an investigation into a $300 million health care fraud scheme that involved the distribution of over 6.6 million dosage units of controlled substances and the administration of medically unnecessary injections that resulted in patient harm.
Attorney General Jeff Sessions, Assistant Attorney General Brian A. Benczkowski of the Justice Department’s Criminal Division, U.S. Attorney Matthew Schneider of the Eastern District of Michigan, Special Agent in Charge Timothy R. Slater of the FBI’s Detroit Field Office, Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Region and Special Agent in Charge Manny Muriel of IRS Criminal Investigation (IRS-CI) Detroit made the announcement.
Mashiyat Rashid, 38, of West Bloomfield, Michigan, was the CEO of the Tri-County Wellness Group of medical providers in Michigan and Ohio, and pleaded guilty to one count of conspiracy to commit health care fraud and wire fraud, and one count of money laundering. In connection with his plea agreement, Rashid agreed to the entry of a forfeiture money judgment in the amount of $51,396,917.70, as well as forfeiture to the United States of property traceable to proceeds of the health care fraud scheme, including over $11.5 million, commercial real estate, residential real estate, and a Detroit Pistons season ticket membership.
“The Department of Justice has made ending the opioid crisis a top priority and taken historic new steps to stop the spread of addiction,” said Attorney General Sessions. “That includes prosecuting important cases like this one. The defendant and physicians working for him allegedly flooded the streets with some 4.2 million unnecessary doses of drugs like oxycodone and required patients to undergo expensive and unnecessary back injections in exchange for pills. And while people were suffering, this corporate executive lived in luxury funded by ill-gotten gains. Today’s guilty plea helps us bring the defendant to justice and reduce the supply of illegal drugs flowing into our communities. And so I want to thank our FBI agents, our partners with HHS and IRS Criminal Investigation and everyone else who helped investigate and prosecute this case. Opioid prescription abuse is clearly a cause of some of the addiction we are seeing today. Successful conclusions of important cases like this one will have a great impact. We are not through yet. There will be more cases like this. Ending opioid prescription abuse is achievable and we intend to end it.”
“Health Care Fraud diverts taxpayer dollars from Medicare and lines the pockets of dishonest health care providers,” said U.S. Attorney Schneider. “This case is particularly troubling in that Rashid, through his clinics, made Michigan’s opioid crisis even worse by prescribing over six million dosages of medically unnecessary opioids to individuals who were already suffering from opioid addiction.”
“Health care fraud schemes such as these threaten the vital trust between a patient and his or her health care provider, undermine the integrity of our health care system, and cost all Americans billions of dollars,” said FBI Special Agent in Charge Slater. “Americans already struggling with health care issues and rising premiums are further burdened with each dollar lost to fraud. To those dishonest and unethical physicians and healthcare providers who prioritize profits over their pledge to provide honest services to those in need, the message should be clear: that the collective resources of local, state and federal law enforcement will expose these schemes and will bring you to justice.”
“Ensuring the appropriate prescribing and use of controlled substances is essential to protecting the health and safety of patients and the Medicare program,” said HHS-OIG Special Agent in Charge Pugh. “Health care professionals play a key role in combatting opioid misuse but some choose to exploit patients and commit criminal acts in order to pursue financial gain and when this happens the OIG and our law enforcement partners will be there to hold them accountable.”
“Hippocratic Oaths and Laws are in place for a reason and in this particular case, it’s about controlling medically unnecessary dosages and administered injections,” said IRS-CI Special Agent in Charge Muriel. “Mashiyat Rashid and others allowed greed to drive their moral compass, contributing to the growing opioid epidemic our nation is facing. IRS-CI and its law enforcement partners will painstakingly work, day in and day out, to catch these greedy healthcare providers in efforts to keep dangerous prescriptions off the streets of our communities.”
In connection with his guilty plea, Rashid stated that he was the CEO of Tri-County Wellness Group, and owned, controlled and operated numerous pain clinics, laboratories and other providers in Michigan and Ohio. As alleged in the superseding indictment, from 2008 until their arrest in 2017, Rashid and physicians working in Rashid’s clinics conspired to obtain patients by prescribing over 4.2 million dosage units of medically unnecessary controlled substances, including oxycodone, hydrocodone and oxymorphone, to Medicare beneficiaries, some of whom were addicted to narcotics. Some of these opioids were allegedly resold on the street.
As part of his plea, Rashid admitted that he conspired with physicians to require Medicare beneficiaries who wished to obtain controlled substances to submit to expensive, medically unnecessary, and painful injections. Rashid paid physicians based on the number of injections that Medicare paid for, regardless of the medical necessity of the injections. In turn, the physicians conducted these repetitive and unnecessary injections on patients in order to increase revenue for Rashid, themselves, and their co-conspirators. Rashid stated that the beneficiaries included vulnerable patients, including those addicted to opioids, who were willing to submit to unnecessary and painful injections in order to obtain pills.
When Medicare conducted a medical review of the injection claims, it determined that 100 percent of the claims were not eligible for Medicare reimbursement and summarily suspended the medical billing privileges of one of the pain clinics involved in the scheme. In order to conceal the continued billing of these fraudulent claims to Medicare, the guilty plea states, Rashid and others created new shell companies that they enrolled in Medicare to keep billing the same fraudulent claims, often changing only the name of the company on the door to the medical practice and/or inventing new suite numbers to conceal the continuation of the fraudulent practices at the same location.
Rashid also owned a diagnostic laboratory and caused physicians to order medically unnecessary urine drug testing from the laboratory. When Medicare conducted a medical review of claims submitted by the laboratory, it determined that 95 percent of the claims were not eligible for Medicare reimbursement. In order to conceal the continued billing of these fraudulent urine drug testing claims to Medicare, the guilty plea states, Rashid and others created a new corporate entity that they enrolled in Medicare so that physicians could keep ordering the same fraudulent urine drug testing claims through this new entity.
In addition, Rashid stated in his guilty plea that he paid illegal health care kickbacks to obtain patients and solicited illegal kickbacks and bribes for physicians to refer Medicare beneficiaries to specific third-party home health agencies, laboratories and diagnostic providers even though those referrals were medically unnecessary.
Further, Rashid pleaded guilty to committing money laundering in connection with a $6.6 million wire transfer on April 13, 2016. The superseding indictment alleges that Rashid transferred the proceeds derived from the conspiracy to live an extravagant lifestyle and spend millions of dollars on luxury clothes from retailers like Hermes, rare Richard Mille watches, and exotic automobiles such as a Lamborghini and Rolls Royce Ghost; a mansion and other real estate in the Detroit, Michigan area; and to sit courtside or in the first row of NBA basketball games, including the NBA Finals.
Rashid; Spilios Pappas, 61, of Monclova, Ohio; Joseph Betro, 57, of Novi, Michigan; Tariq Omar, 61, of West Bloomfield, Michigan; and Mohammed Zahoor, 51, also of Novi, were each charged in a superseding indictment with one count of conspiracy to commit health care fraud and wire fraud. Pappas, Betro, Omar, and Zahoor were each additionally charged with one count of health care fraud. All of the defendants were previously charged in an original indictment, along with Yasser Mozeb, 35, of Oakland County, Michigan and Abdul Haq, 72, of Ypsilanti, Michigan. Mozeb and Haq have pleaded guilty, along with 12 other defendants, including seven other physicians. The case is pending before U.S. District Judge Denise Page Hood of the Eastern District of Michigan. Trial has been scheduled to begin on Nov. 27 before Judge Hood. Rashid’s sentencing is set for April 11.
An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
This case was investigated by the FBI, HHS-OIG and IRS-CI. Trial Attorney Jacob Foster of the Criminal Division’s Fraud Section is prosecuting the case. The financial investigation into Rashid’s assets was conducted by a partnership between the FBI, IRS, U.S. Marshals Service, Department of Justice’s Health Care Fraud Unit, and the U.S. Attorney’s Office’s Forfeiture and Financial Litigation Unit. The group conducted an extensive pre-indictment investigation and continued to support the prosecution through today’s guilty plea. Assistant U.S. Attorney Shankar Ramamurthy and DOJ Trial Attorney Jacob Foster led the financial investigation.
The Fraud Section leads the Medicare Fraud Strike Force, which is part of a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country. Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in 12 cities across the country, has charged nearly 4,000 defendants who have collectively billed the Medicare program for more than $14 billion.
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