Cops in $33 Million Medicare Fraud Case Find Evidence Stolen From Prosecutors in Defendant Zafar Mehmood’s Jail Cell!
Miami may be the epicenter of Medicare fraud (and fraud in general) but Detroit is certainly trying to catch up. Luckily the FBI and whistleblowers are fighting back. Last month the FBI and Medicare agents obtained convictions against Zafar Mehmood and Badar Ahmadani. Both men were convicted of federal Medicare fraud charges. Mehmood was also convicted of obstruction of justice and money laundering charges. The obstruction charges relate to theft of evidence.
According to the Department of Justice and FBI, Mehmood and Ahmadani were masterminds in a $33 million Medicare fraud scheme centered in Detroit. (Both men are from Ypsilanti, Michigan.)
Court records say that Mehmood and Ahmadani paid kickbacks to physicians who referred patients to home health care companies operated by the two men. Kickbacks are illegal under federal law and are common in healthcare fraud schemes. If that wasn’t already bad enough, prosecutors say the patients didn’t even require the services and in some cases the services weren’t even performed.
According to Special Agent Steven Warren of the Department of Health and Human Services, the men were arrested after a former employee agreed to cooperate with investigators. The employee – who is not named in court documents – claimed his job was to deliver kickback money to patient recruiters. The recruiters would then be paid $30 in cash for each blank therapy form that the recruiter could get signed.
The FBI says that both men were able to carry on their scheme for years before getting caught.
Kickbacks, medically unnecessary services, patient recruiters, phony eligibility documentation and billing for services never performed are common badges of Medicare fraud. This case took a very unusual twist, however.
Prosecutors say that after Mehmood was caught and after police had used a search warrant to seize records, Mehmood stole the evidence seized by agents! Mehmood wasn’t the brightest criminal, however. The FBI says he hid the documents in his jail cell.
After his initial arrest and prior to stealing evidence, Mehmood had been held by U.S. Marshals and not released on bond. After three motions for release, however, Mehmood’s lawyer was finally able to convince a judge to release him for 3, eight hour days to assist counsel in reviewing documents. His lawyer said that with over 700,000 pages of documents, it was impossible to review the discovery off-site without Mehmood’s assistance.
According to court records, after one of those supervised record reviews, prosecutors realized that some records were missing. Agents then obtained a search warrant and searched Mehmood’s cell where they found the missing records!
Immediately prior to trial, Mehmood filed several motions relating to his Islamic beliefs and culture. Worried that he would try to raise issues having no relevance to his guilt or innocence, prosecutors filed their own motion to preclude Mehmood from raising selective prosecution arguments before the jury.
After a hearing, the court largely sided with prosecutors but did order the U.S. Marshall to pay for some of Mehmood’s witnesses to travel to court and did allow Mehmood to expose one of the government’s witnesses as a compulsive gambler.
The trial of Ahmadani and Mehmood began on July 8th. After a 13-day trial, the jury found both men guilty of all charges.
Both men will likely be sentenced in early 2016. Generally, healthcare fraud charges carry a maximum sentence of 10 years per count. (Judges can enhance the sentence if a patient suffered because of unnecessary treatment, which does not appear to be the case here.)
Mehmood is facing a life sentence but such sentences are rare. Although none of the patients appear to have suffered harm, Mehmood’s refusal to accept responsibility for his actions and stealing evidence from law enforcement is likely to negatively impact his sentence.
Ahmadani was convicted of two conspiracy counts and faces 20 years in prison.
Home health care is a common source of Medicare fraud. Home health agencies can’t bill Medicare without a certificate of medical necessity. That usually means a corrupt or dishonest doctor behind the scenes willing to sign the required paperwork in return for a bribe or a kickback. We hope prosecutors or the state medical licensing board pursues charges against all physicians involved.
Most Medicare fraud cases come to light because of whistleblowers – honest men and women who simply become tired of the constant fraud and theft. The recent prosecution of Farid Fata, the “Butcher of Detroit,” happened because 3 concerned colleagues, employees and former employees stepped forward.
Doing the right thing is usually the main motivator for most whistleblowers but under the federal False Claims Act, whistleblowers can receive up to 30% of whatever is collected by the government.
In 2014, the Justice Department and courts paid out $635,000,000.00 to whistleblowers. (Our clients received over $100,000,000.00 in award monies.)
Lest anyone think Medicare fraud is a victimless crime, taxpayers are the ultimate source of Medicare and state Medicaid programs. The FBI says that Medicare fraud costs taxpayers up to $8 billion per year.
We are proud to announce that we have opened a satellite office in metro Detroit to help our whistleblower clients stem Medicare fraud and collect the maximum possible awards available.
In a time with so much fraud and so little personal accountability, whistleblowers are the new American heroes. If you know of fraud against taxpayers, please give us a call. Simply want more information? Visit our Medicare fraud whistleblower page or for specific information on illegal recruitment schemes, visit our patient recruiter information page.
Feb 2018 update: In November of 2016, Mehmood was sentenced to 96 months in federal prison. The sentence imposed was a far cry from the 30 year sentence sought by prosecutors. In the words of the Justice Department,
The defendant, Zafar Mehmood, was the mastermind of a massive home health care fraud in the Eastern District of Michigan that not only defrauded Medicare of more than $40 million, but specifically targeted and exploited indigent Medicare beneficiaries. The defendant’s criminal enterprise was designed to steal as much as possible from Medicare, and to hide that money by laundering it through shell corporations. After finally being caught, the defendant then stole incriminating evidence in an attempt to avoid justice. The United States respectfully recommends that the Court impose a sentence of 360 months of imprisonment…
Not surprisingly, Mehmood filed an appeal immediately after his sentencing. Whether he serves his entire 8 year sentence or his conviction gets reversed on appeal, Mehmood will likely be deported back to Pakistan once released.
Criminal Prosecutions and Whistleblower Awards
Prosecutors can elect to civilly prosecute Medicare fraudsters, indict and proceed criminally or both. The federal False Claims Act is a civil remedy that pays huge whistleblowers based as a percentage of what the government collects from the wrongdoer. If the government uses a whistleblower’s information but collects fines and penalties under something other than the False Claims Act, the whistleblower may still seek an award. Such awards are called “alternate remedies.”
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Need more information, contact attorney Brian Mahany at or by telephone at 313-879-2070.
MahanyLaw – America’s Medicare Fraud & Whistleblower Lawyers