Posts Tagged ‘fraud’

Secretary of State Wants Voter Photos At Polls

By Nevada News Bureau Staff | 4:16 pm November 27th, 2012

CARSON CITY – Secretary of State Ross Miller announced today he is seeking legislation in the 2013 session aimed at curbing the potential for voter fraud by including photographs of registered voters at polling places on election day.

Miller said today his proposal is not a voter identification measure. Instead it would be an upgrade to the current antiquated paper roster system by implementing electronic voter rosters with the enhanced feature of a photograph of each registered voter.

Secretary of State Ross Miller.

The requirement of a photograph in the new electronic roster would prevent ineligible voters from impersonating other, eligible voters at a polling place, Miller said. The proposed law, which is currently being drafted, will seek to import existing photographs of eligible voters from the Nevada Department of Motor Vehicles (DMV) database of drivers’ licenses and state identification cards.

The photographs would be part of a new “electronic poll book” as an adjunct to the existing poll books that currently use signatures for identifying voters. When photographs of the eligible voters are not available through the database, poll workers would be available to take photos at the polling place at the time of voting and verify their identity by way of an affidavit.

Voter ID laws have been passed in other states, but have frequently led to court challenges. Nevada does not now have such a law.

Sen. Michael Roberson, R-Las Vegas, proposed a voter ID law in the 2011 legislative session, but the measure did not win approval from a Senate Committee and died without action.

Assemblyman Lynn Stewart, R-Henderson, has submitted a bill draft request for a voter identification law for the 2013 session.

“This provides a significant safeguard in our election process while simultaneously ensuring that we don’t disenfranchise any voters,” Miller said. “It’s really just an enhancement of the existing system, by providing an electronic poll book that could include a photo to go with the already recorded signature.”

DOJ Reports $5.6 Billion In Fraud Recoveries In 2011, $8.3 Million In Nevada

By Nevada News Bureau Staff | 12:49 pm December 13th, 2011

CARSON CITY – The U.S. Department of Justice announced today that it recovered $5.6 billion in civil and criminal fraud efforts in 2011, a 167 percent increase over 2008.

In Nevada, recoveries totaled $8.3 million in 2011, a 137 percent increase over 2008 when $3.5 million was recovered.

Courtesy U.S. Department of Justice.

Of the $5.6 billion recovered by DOJ in 2011, over $2.9 billion was in health care fraud alone, the agency reported.

Nevada was one of 21 states where recoveries more than doubled.

“All across the country, the Department of Justice continues to move aggressively to protect the American people from fraud,” said U.S. DOJ Deputy Attorney General James Cole. “In this past fiscal year, we recovered more money from fraudsters than ever before, over $5.6 billion. These efforts not only send the message that those who commit fraud will be held to account, they also result in more dollars in the national treasury and demonstrate a high rate of return on the American taxpayers’ investment in the Justice Department.”

As a next step in an aggressive campaign to crack down on Medicare fraud, the Department of Health and Human Services (HHS) will direct all Medicare prescription drug plans to use every tool at their disposal to prevent fraud. Patients sometimes “doctor shop,” visiting numerous doctors to get multiple prescriptions for OxyContin, Percocet, and other painkillers and narcotics. In some cases, these medicines are abused by the patients. In others, patients sell the extra drugs.

OxyContin and Percocet abuse, prescription drug fraud, and so-called “doctor shopping” are major problems. The Government Accountability Office recently reported that “170,000 Medicare beneficiaries received prescriptions from five or more” doctors for drugs that are frequently abused, like OxyContin and Percocet.

While not all of these cases are fraudulent, some are. In 2008, for example, one Medicare beneficiary “received prescriptions for a total of 3,655 oxycodone pills [such as OxyContin]…from 58 different prescribers.”

Today, HHS announced they have urged insurance companies to take every step possible to prevent such fraud. Specifically, HHS’ guidance tells prescription drug plans to withhold payment on suspicious claims, including when enrollees use multiple doctors to obtain painkillers and narcotics.

Companies that offer prescription drug plans already process each of a patient’s prescriptions.  While HHS generally requires prompt payment, today’s guidance clarifies that if a plan sees signs of suspicious activity, it should withhold payment to pharmacies until it verifies the claim is valid.

Nevada Agencies Fight Medicaid Fraud, Return Millions Annually To Program

By Sean Whaley | 9:55 am September 23rd, 2011

CARSON CITY – Medicaid fraud is a growing problem here and around the country, and two different Nevada agencies are tasked with investigating cases and returning ill-gotten taxpayer dollars to the program.

The cases can be worth hundreds of millions of dollars when they involve multi-state investigations of large pharmaceutical firms, such as the $400 million paid by Merck in 2008 over rates charged to the program for its prescription drugs. Nevada, which played a key role in the Merck case, received $1.5 million as its share of the nationwide settlement with the company.

Or the cases can be more modest, such as the investigation earlier this year of two elderly brothers from Las Vegas, one of whom was eligible for Medicaid while the other was not. The ineligible brother attempted to use his sibling’s Medicaid identity to pay for a surgery.

Unluckily for him but fortunately for taxpayers, both brothers had scheduled surgeries for the same day. When the two different hospitals checked with the Nevada Department of Health and Human Services to verify the eligibility information, the situation came to light. The case is still under review.

The dollars involved in Medicaid fraud are not small, and even the money recouped from the more modest cases can quickly add up.

In the first seven months of this year, $1.15 million has been recovered by the attorney general’s Medicaid Fraud Control Unit, about half of it state funds. In 2010 the total recovery in both state and federal Medicaid funds was $5.72 million, and $5.5 million in 2009.

The big year for the unit came in 2008 when nearly $10.5 million was recovered, including $1.5 million from the Merck settlement. About $4.6 million was the state’s share of the recoveries.

“Obviously this is an important unit in my office and a top priority,” Attorney General Catherine Cortez Masto said in a recent interview. “It is important what we do because at the end of the day the goal here is to ensure that we’re protecting the integrity of the Medicaid dollars, the money that comes into the state, and we’re going after the bad players, holding them accountable.”

Medicaid in Nevada will cost $1.6 billion this year

Attorney General Catherine Cortez Masto. / Nevada News Bureau file photo.

Medicaid is a health insurance program for low income residents, many of them elderly or disabled. The cost of the program is shared between the states and the federal government. The program is a big cost to the state general fund and continues to grow, so fraud is a serious problem that drains taxpayer dollars at a time Nevada can least afford it.

For this 2012 fiscal year, the total Nevada Medicaid budget is $1.6 billion, with just over $500 million coming from the state general fund. The federal government is paying 55 percent of the cost of the Nevada Medicaid program. Other revenues also support the program.

Brenda Lee Burch, chief of investigations and recovery for the Division of Welfare and Supportive Services within HHS, said the fraud investigations save state taxpayer dollars.

“I truly believe that one of the best ways my unit can help save taxpayer money here in Nevada is through Medicaid investigations and prevention of fraud and recovering back those wrong payments,” she said.

Mark Kemberling, chief deputy attorney general and director of the Medicaid Fraud Control Unit since 2008, said his office is charged with investigating providers of Medicaid services. These can be physicians, a hospital, a long-term care facility and many other types of health care providers. He has been with the unit since 1996.

He has a staff of 17, with 14 positions filled. The costs of the unit are paid for through fines and other assessments resulting from successful prosecutions. No Medicaid dollars or general fund tax dollars pay for its operation.

Burch said her unit is charged with investigating Medicaid fraud by both those individuals seeking eligibility and those already enrolled in the program. Her staff of 16 investigators also review potential fraud in other programs offered by the agency, from cash assistance grants and food stamps to energy assistance grants.

It was her staff who uncovered the case of the ineligible brother trying to obtain medical services through the Medicaid program. Families attempting to share Medicaid cards to receive services for ineligible family members are becoming more frequent, she said.

For the 2011 fiscal year that ended June 30, Burch’s unit received 3,800 referrals regarding allegations of Medicaid fraud. The top two types of allocations were potential duplicate assistance in two states, and eligibility questions because of under-reported income.

So far $500,000 in over payments have been identified in the previous fiscal year for which the agency is seeking reimbursement, with another $400,000 saved in “cost avoidance,” a calculation based on keeping ineligible people off the Medicaid rolls.

Burch said the cases come to her attention from a variety of sources, including the public, a hotline, school nurses, home care staff and pharmacists, among others.

“A medical benefit for a month can be huge if you have a large family and you take into account there could be surgery and all kinds of coverage, so it is the highest cost avoidance we see for all the programs we investigate,” she said.

High stakes Medicaid fraud cases frequently rely on False Claims Act

Some of the biggest Medicaid fraud cases both in Nevada and nationally involve a legal process called qui tam, where a court action is brought against a provider, frequently a pharmaceutical firm, by an individual on behalf of a state or the federal government. It is also known as the false claims act, which Nevada and about two dozen other states have in statute.

The claims are often filed by individuals within the companies as whistle blowers. Those who file such claims can receive a portion of any settlement. There are about 250 such cases currently under way around the country currently, Kemberling said.

The Merck case was one of these and was filed under Nevada’s False Claims Act. It resulted in a landmark legal decision by U.S. District Court Judge Howard McKibben in May 2006 allowing the case to proceed.

After seven years of investigation and litigation, it was settled in 2008, returning more than $400 million to the Medicaid program nationwide. The case involved the prices charged for the prescription drugs Vioxx, a discontinued arthritis drug, and Zocor, a cholesterol drug.

Another false claims act case now under way involves Wyeth, a pharmaceutical company being sued by the United States government and 16 states, including Nevada.

In the legal action, Wyeth is alleged to have failed to provide the same discounts to the government for its drugs, Protonix Oral and Protonix IV, as it provided for private purchasers. By failing to give the government equal discounts, Wyeth fraudulently avoided paying hundreds of millions of dollars in rebates, and in so doing violated the Medicaid Drug Rebate Program, according to the lawsuit.

“What we’re doing is taking the dollars that rightfully belong to Medicaid and putting them back there if somebody fraudulently took them,” Masto said.


Audio clips:

Attorney General Catherine Cortez Masto says Medicaid fraud investigation is a top priority for her office:

092211Masto1 :25 holding them accountable.”

Masto says the fraud unit does a great job at no cost to the state general fund:

092211Masto2 :18 pays for itself.”

Brenda Lee Burch, chief of investigations and recovery for the Division of Welfare and Supportive Services, says fraudulent Medicaid costs can add up quickly:

092211Burch1 :19 that we investigate.”

Burch says recovering improper Medicaid payments is one of the best ways her unit can save taxpayer dollars:

092211Burch2 :17 those wrong payments.”




Nevada Securities Division Issues Cease and Desist to Wyoming Company

By Nevada News Bureau Staff | 2:26 pm September 10th, 2011

CARSON CITY — The Secretary of State’s Securities Division has issued a cease and desist order to a Wyoming company doing business in Nevada to stop selling shell corporations registered with his office because it is a securities violation.

Secretary of State Ross Miller says the sale of Nevada corporations and limited liability companies (LLCs) includes the sale of stocks or shares, and is therefore regulated by Nevada’s securities statutes and regulations.

“The sale of securities by an unlicensed broker or dealer is a clear violation of our securities statues,” said Miller in a Friday press release. “Every corporation has stock or shares representing ownership, so in order to sell the corporation you have to sell the stock or shares. It’s not illegal to do that, but it is illegal to do so without a license.”

Miller said his office will continue to investigate other possible criminal violations related to this type of activity.

The Chief Administrator of the Securities Division, Carolyn Ellsworth, says the Division will also be investigating possible fraudulent and misleading claims regarding the value of the shell companies in this case as well as future investigations.

“Many times when these corporations or LLC’s are sold, the buyer is told that simply because the entity was formed and registered a few years ago, it has more value because it’s an ‘aged’ corporation,” said Ellsworth. “Buyers are sometimes told that the aged nature of the entity makes it more valuable for things like getting a line of credit, or just general credibility. It does not, and so that’s a serious misrepresentation.”

The issuance of the Cease and Desist Order is part of an ongoing effort to address abuses of the Nevada commercial filing statutes and regulations.

In addition, corporate entities registered in Nevada and the formation agents and registered agents representing those entities will be the focus of the new Corporate Ownership Fraud Task Force that was announced this week by Miller.

The Task Force will investigate registered Nevada business entities that are suspected of being involved in illegal activities including tax evasion, money laundering, securities violations, and the marketing of shell or shelf companies for fraudulent and/or deceptive purposes.

Miller has appointed former criminal prosecutor Tera Ames as his Special Liaison to the Task Force which will also include Special Agent in Charge Paul Camacho from the Internal Revenue Service, and John P. Kelleher, Chief Deputy Attorney General of the Attorney General’s Bureau of Criminal Justice Fraud Division.

The Task Force will use shared resources and information to target possible criminal activity.

“We have a unique law in Nevada which allows us to demand a list of beneficial owners of any entity registered in Nevada that is suspected of illegal activities,” said Miller. “We plan to use that law aggressively, which is why I’ve brought in a criminal prosecutor to be my liaison to the Task Force.”

Miller said that although the problem is not rampant, there are cases of individuals and entities falsely promoting Nevada as a safe haven for criminal activity.

The IRS recently took aggressive action against individuals involved in asset protection schemes in Nevada. In July, William S. Reed, Richard Neiswonger, and Wendell Waite were indicted on federal charges of defrauding the U.S. Government, mail fraud, wire fraud, conspiracy and money laundering.

Additionally, criminal fraud relating to disguised corporate ownership has long been a focus of the IRS and was once again named as one of the IRS’ 2011 Dirty Dozen Tax Scams.

In these schemes, corporations and other entities are formed and operated for the purpose of disguising the ownership of the business or financial activity by means such as improperly using a third party to request an employer identification number. Such entities can be used to facilitate underreporting of income, fictitious deductions, non-filing of tax returns, participating in listed transactions, money laundering, financial crimes and even terrorist financing.

The Task Force’s investigations will be backed by an aggressive prosecutorial effort by the Nevada Attorney General, according to press release this week.

Secretary of State Investigators Arrest Southern Nevada Man in Multi-State Ponzi Scheme

By Nevada News Bureau Staff | 9:28 am July 22nd, 2011

Investigators from the Secretary of State’s office today arrested Hans Seibt at his Las Vegas residence on 25 counts of securities fraud and six counts of theft. The criminal complaint filed by Attorney General Catherine Cortez Masto charges that Seibt was essentially operating a Ponzi scheme that victimized investors in Nevada and several other states.

Operating under the business names HSLV Development Corp. and Clark and Nye County Development Corp., Seibt successfully solicited investments of $10,000 or more from his victims, offering them trust deeds, joint venture agreements, and subscription agreements, all of which were supposedly secured by parcels of land Seibt was holding in Nye County.

Investigators say the land’s value was grossly exaggerated in order to support Seibt’s claims to his victims. The complaint also charges that Seibt and his representatives told victims they would receive a return of between 10 percent and 12 percent on their investment, but that Seibt, rather than actually purchasing the land, had used the money to pay off other investors and for personal use.

“Targeting senior citizens is particularly egregious,” Masto said. “I want to commend the Secretary of State’s office for bringing the evidence which resulted in the filing of this complaint.”

Attorney General Catherine Cortez Masto. / Nevada News Bureau file photo

Secretary of State Ross Miller said: “I can’t stress enough the importance of every investor conducting the most thorough due diligence possible when making an investment. Investing is a complicated and, to varying degrees, risky process. So-called interest payments or distributions that are paid to some investors aren’t a guarantee that an investment is legitimate. That’s the whole basis for a Ponzi scheme. Potential investors just can’t be careful enough, especially in the current economic environment.”

Seibt was booked in Clark County jail this morning, and was initially being held without bail pending an initial appearance in Justice Court.

As in all criminal matters, the Secretary of State’s office cautions that allegations are only accusations and individuals are presumed to be innocent until proven guilty in a court of law.

Questionable Billing, Attendance Problems Costing $2.3 Million Identified In Audits Of Nevada Mental Health Programs

By Sean Whaley | 2:15 pm June 30th, 2010

CARSON CITY – Audits of two state mental health programs reviewed today identified a number of serious findings, from physicians working only a few hours a day to questionable and potentially fraudulent bills for services to the mentally ill.

In one case, the Division of Mental Health and Developmental Services is investigating a provider who billed for services to a mentally ill client even though the individual was hospitalized at the time.

Harold Cook, administrator of the agency, said it appears as if there was a “deliberate attempt to deceive us.”

Cook acknowledged that other billings identified in the audit of the residential support programs, where services are provided to mentally ill clients, were “egregious” and “inappropriate.”

The review by the Division of Internal Audits identified numerous cases of questionable expenses, including paying supplemental rent to a client who had spent money on tattoos, $150 biofeedback sessions and $175 on Christmas cards.

The audits were reviewed by the Executive Branch Audit Committee, which includes Gov. Jim Gibbons, the other state constitutional officers and a representative of the public.

Gibbons said the audits show there are people trying to take advantage of the state, and called the findings troubling because they are evidence of a systemic problem.

“And it doesn’t speak well of the people who are submitting the billing or trying to take advantage of the state’s fiscal condition at this point in time,” he said. “The state of Nevada is not for sale. The state of Nevada should not be defrauded.”

In another case cited in the audit, a provider submitted reports that were identical from month to month except for the editing of dates. The same provider showed a charge for 2.5 hours to “meet a client at a restaurant and count change.”

Another provider billed for taking a client on eight-hour bike rides and massage.

Another involved $80 to $105 payments for music therapy with no supporting documentation.

One billing was for more than $1,000 a month on services identified only as, “in home discrete trial.”

Another was for $369 for action lessons with no evidence the service met a client’s needs.

Another case involved a billing from a provider for a client who was missing for over a week.

The claims were approved and paid by the agency with no evidence they were questioned, the audit found.

The audit said the agency could save at least $650,000 a year by clarifying policies for expenditures and improving monitoring. All 11 recommendations were accepted by the agency, although Cook noted in his response that the questionable spending amounts to less than one half of one percent of the $110 million budget for these services.

Cook said there are 5,000 providers, some of whom generate hundreds of bills each month that must be reviewed by staff.

“Sometimes we miss them,” he said.

The second audit reviewed the operations at the agency’s two psychiatric hospitals and 24 out-patient clinics, and found a number of physicians employed by the state were not working full days.

In one case, a doctor who worked at the Rawson-Neal Hospital in Las Vegas averaged two hours a day.

The audit found that on average, none of the doctors, who earn as much as $170,000 a year, worked full days.

“We were able to identify one day in the four months when one of these doctors worked a full day,” the audit said. “We estimate the division lost up to $1.7 million from doctors’ attendance problems at the Rawson-Neal Hospital in fiscal year 2009.”

Cook said the doctor who only worked two hours a day is no longer with the agency. Three other doctors with attendance problems are also gone, he said.

Cook said the expectation is that all state employees will put in an eight-hour day.

The agency is looking at privatizing the medical services as a way to address the issue going forward, he said.

All 11 audit recommendations were accepted by the agency.

Gibbons said the audits help pinpoint problems so fixes can be made going forward. The audit of the agencies is critical to ensuring the state meets its fiduciary obligation to taxpayers.

“We need to know where our weaknesses are, we need to know where the state can do better,” he said.


Audio clips:

Gibbons on audit findings:

063010Gibbons1 :18 not be defrauded.”

Gibbons on need for audits:

063010Gibbons2 :12 solving those probelms.”

Cook on potential fraud:

063010Cook1 :30 to deceive us.”

Cook on findings that were inappropriate:

061030Cook2 :19 by the staff.”

Cook on physican attendance problems:

063010Cook3 :15 are also gone.”