What do you call a woman convicted four times of fraud? Friends and family of Barbara Moore will be calling her ‘inmate” for the next 41 months. Earlier this week Moore was sentenced to almost three and a half years after being convicted of Georgia Medicaid Fraud. Once released, Moore must also pay $948,000 in restitution and serve three more years of supervised release.
Moore’s most recent escapade involves Medicaid fraud but prosecutors say she has a long history of fraudulent behavior including federal convictions for bank fraud, bankruptcy fraud and even social security fraud. In her most recent case, the Justice Department and the Georgia Medicaid Fraud Control Unit say she defrauded the state funded healthcare program. According to one of her employees who testified before a Grand Jury, Moore also ripped off her workers as well.
Georgia Medicaid Fraud Indictment
Georgia’s Medicaid program (called the Peach Program for Georgia kids) insures hundreds of thousands of lower income families inside the state. Just the number of kids enrolled in the program is 894,000.
Georgia’s program is administered by the state’s Department of Community Health. Funding for its programs comes from state and federal tax dollars. That is important because whistleblowers who report fraud and abuse in taxpayer funded healthcare programs are usually eligible for large cash awards. More on that below.
Fraud Scheme Involved Custom Orthotics
Medicaid typically covers physician visits, hospital stays, therapists and certain medical supplies and equipment. Included in the equipment eligible for reimbursement are orthotics. Those orthotics can include special braces and footwear. To be eligible for payment, however, orthotics must be prescribed by a doctor and medically necessary.
Unfortunately, medical equipment sales frequently attract scam artists. Wallace and her company MBA Diabetic Footwear Solutions is a prime example.
It is unclear whether Wallace was a co-owner in the business but she certainly ran day to day operations. The indictment claims she handled billing functions and helped submit claims to Medicaid for reimbursement. The indictment also says she directed employees to canvas neighborhoods and offer “free” services and products to area residents.
Remember that saying that there is no such thing as a free lunch? Well the custom orthotic shoes and braces sold by Wallace’s company cost between $193 and $397. Perhaps the patients were not paying for their “free” shoes but taxpayers were.
Prosecutors selected eight specific patients that received orthotics without a valid prescription or without any medical necessity. According to the indictment, some patients never even received their shoes.
Last year a federal grand jury indicted Wallace on eight counts of healthcare fraud. Typically, each count carries a maximum sentence of 10 years although courts can greatly enhance those maximum sentences if the fraud causes injury to the patient. A common example of the latter is the doctor who performs unnecessary cardiac stent surgeries.
The Golden Rule – Don’t Treat Your Works Like Second Class Citizens
No one likes greed and fraud. Stealing isn’t cool. Some say Medicaid fraud is a victimless crime but it is certainly not. Many states are so financially strapped that there are long waits for certain types of care paid through Medicaid. It is also important to remember that ripping off Medicaid means ripping off taxpayers. If you are reading this post, you are a victim of Medicaid fraud. The system loses tens of billions of dollars each year to fraud.
Barbara Wallace took her personal greed one step further. She bounced checks on her workers and underpaid them. If you are going to commit crimes, don’t mistreat your employees! One of those employees was Natasha Banner, a billing clerk who would later testify before a federal Grand Jury shortly after quitting MBA Diabetic Footwear.
Banner testified there was a constant pressure to improve sales figures. If a doctor couldn’t be found quickly to sign a prescription, Wallace directed employees to use modified billing codes or reuse old prescriptions.
Wallace Heads to Prison
Wallace’s lawyer made valiant but unsuccessful attempts to get the case against his client dismissed. One novel argument claimed that the federal healthcare fraud law was unconstitutional! None of those efforts worked.
After losing several motions, Wallace changed her plea and was convicted of a single count of healthcare fraud pursuant to a plea agreement.
Under the agreement, a United States Sentencing Commission guideline sentence of 33 to 41 months was calculated. Federal judges aren’t bound by those guidelines but often follow them. The guidelines consider prior criminal convictions, seriousness of the crimes and the amount of money that a fraud costs victims or taxpayers.
Wallace argued that prosecutors never properly calculated the amount of loss to taxpayers. Frequently in Medicaid fraud cases, courts allow random sampling to determine the amount of losses. Wallace argued against the sampling method but the court was unmoved.
She also argued that she didn’t deserve to go to prison but U.S. District Court William Moore was not buying that either. In fact, because of her three prior federal fraud convictions, he sentenced her to the maximum guideline sentence of 41 months. He also ordered her to pay $948,361 in restitution, ordered all property acquired by her ill-gotten gains be forfeited and further ordered that she serve three more years of probation after release.
After the sentencing, FBI spokesperson David J. LeValley said, “Medicaid fraud is a selfish, greed driven act that takes public funds away from those who truly need them. The sentencing of Ms. Wallace to federal prison will provide much time and opportunity for her to reflect on her self-centered and, more importantly, criminal conduct. The FBI will continue to work with its law enforcement partners in identifying, investigating, and presenting for prosecution those individuals engaged in such healthcare based fraudulent schemes.”
The case against Wallace was a joint prosecution involving Georgia and federal agencies.
Georgia’s Attorney General Chris Carr remarked after Wallace’s sentencing, “The Office of the Attorney General will not stand by and allow those who commit fraud to take advantage of programs that are intended to support our state’s most vulnerable citizens. Our Georgia Medicaid Fraud Control Unit will continue to provide vital investigative and prosecutorial support to our partners at the federal and local levels, so that we can guarantee those who seek to undermine the integrity of the Medicaid system are prosecuted to the full extent of the law.”
Georgia Medicaid Fraud Whistleblowers Eligible for Awards
Most Medicaid and Medicare fraud prosecutions begin with a tip from a concerned healthcare worker. Maybe it is the billing clerk, maybe a worker recently demoted for speaking up about dishonesty and maybe a nurse from another practice that shares office space.
The Georgia False Medicaid Claims Act pays whistleblowers with information about Georgia Medicaid fraud awards of up to 30% of what the government collects in fines. A similar federal law, the False Claims Act, pays Medicare fraud whistleblowers awards.
Because the state and federal law allow for triple damages and huge fines, awards can increase in value quickly. Awards in the hundreds of thousands of dollars are not unusual. If a hospital or pharmaceutical company is the wrongdoer, awards in the millions of dollars are possible. (Since 2014, our False Claims Act whistleblowers have collected over $100 million in awards!)
Most awards are between 15% and 30% of the collected penalties. The government determines the amount of the award although whistleblowers are entitled to a fairness hearing before a judge if there is a disagreement over the size of the award. Factors used to determine the size of the award include the quality and freshness of the whistleblower’s information and whether the whistleblower suffered any consequences by coming forward.
The biggest factor in determining the award is who prosecuted the case. If the government takes over the case in its early stages, awards tend to be nearer the 15% figure. If the whistleblower’s own lawyers prosecute, however, the awards are generally between 25% and 30%.
Generally, only the first to file gets the award. Because these cases are filed under seal (meaning they are not made public upon filing), it is hard to know if someone has already filed. Our advice is therefore to file immediately and not delay.
Awards can also only be based on original source or inside information. If you read something in the newspaper, that information probably isn’t eligible for an award.
Georgia Medicaid Fraud Whistleblower Protections
Like most states and the federal government, Georgia has robust protections to protect whistleblowers who suffer retaliation or discrimination because they stood up and blew the whistle. Under the Georgia False Medicaid Claims Act, whistleblowers who suffer illegal retaliation are entitled to receive:
- Reinstatement with the same seniority status
- Two times the amount of back pay
- Interest on the back pay
- Compensation for any special damages sustained
- Reasonable attorney’s fees and costs.
The law extends beyond employees of the wrongdoer and can include independent contractors.
MahanyLaw – Georgia Medicaid Fraud Whistleblower Lawyers
Need more information? Give us the call. All inquiries are kept strictly confidential and are protected by the attorney – client privilege. We simply ask that you not call from a company phone or computer and that you not use a company email address.
We also invite you to visit our Medicare and Medicaid fraud page.