Detroit medical clinic owner sentenced to 151 months in prison for role in $23 mln Medicare fraud scheme

A Detroit-area medical clinic owner has been sentenced to 151 months in prison for his role in a $23 million Medicare fraud scheme, the Department of Justice (DOJ) and Health and Human Services (HHS) have announced.

Bernice Brown, 56, the owner of Wayne County Therapeutic Inc. (WCT), was sentenced by U.S. District Court Judge Arthur Tarnow in the Eastern District of Michigan to 151 months in prison for committing health care fraud.

Daniel Smorynski, 63, the vice president of WCT, has also been sentenced to 108 months in prison for committing the same crime.

In addition to their prison terms, Brown and Smorynski were sentenced to three years of supervised release and were ordered to pay jointly and severally $6.5 million in restitution.

Brown and Smorynski were convicted by a federal jury earlier this year, following a six-day trial. While Brown was convicted of one count of conspiracy to commit health care fraud and nine counts of health care fraud, Smorynski was convicted of one count of conspiracy to commit health care fraud and five counts of health care fraud. However, Smorynski was acquitted on four counts of health care fraud.

According to evidence presented at trial, WCT, which operated in Livonia, Michigan, purported to specialize in physical and occupational therapy. The evidence at trial established that Brown had purchased from certain third-party contractors fake physical and occupational therapy files that were created by non-enrolled, and in many cases, non-licensed contractor therapists.

And, rather than provide therapy, the contractor therapists paid Medicare beneficiaries cash kickbacks to induce the Medicare beneficiaries to provide their Medicare numbers and to sign false documentation to make it appear as if they had received therapy.

The services reflected in the fictitious files were then billed to Medicare as if WCT therapists had provided the services.

Brown also had instructed her staff to create false documents to add to the fictitious medical files to make it appear that WCT therapists, who were licensed in the state and enrolled with Medicare, had performed the services, when she knew they had not.

Smorynski was in charge of billing at WCT and aided in the submission of claims for services he knew WCT did not provide.

Between October 2002 and September 2006, they submitted around $23.2 million in claims to Medicare for the therapy services that were never actually provided. At that time, Medicare had paid around $6.5 million of those claims.

According to the evidence at trial, Brown and Smorynski had caused WCT to also submit fraudulent claims for psychotherapy services to Medicare.

In January 2006, when the Congress enacted a cap on physical and occupational therapy services to control costs, Brown and Smorynski also launched an effort to lobby against the law by instructing WCT staff to draft letters and petitions to Congress purportedly on behalf of Medicare patients. They then instructed the WCT staff to bill Medicare for their lobbying efforts as psychotherapy evaluations and visits.

In 2006, WCT had billed $493,200 to Medicare for psychotherapy services that were not necessary and not provided, and Medicare had paid approximately $121,921 of those claims.

Since its inception in March 2007, Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 825 individuals and organizations that collectively have billed the Medicare program for more than $2 billion.