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 5. Owner of Miami-Area Mental Health Company Sentenced To 35 Years In Prison
    For Orchestrating $205 Million Medicare Fraud Scheme




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Press Release


OWNER OF MIAMI-AREA MENTAL HEALTH COMPANY SENTENCED TO 35 YEARS IN PRISON FOR
ORCHESTRATING $205 MILLION MEDICARE FRAUD SCHEME

Thursday, December 8, 2011
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For Immediate Release
Office of Public Affairs

WASHINGTON – The owner of a fraudulent Miami-area mental health care company,
American Therapeutic Corporation (ATC), was sentenced today to 35 years in
prison for orchestrating a $205 million Medicare fraud scheme, announced the
Department of Justice, the FBI and the Department of Health and Human Services
(HHS).

Judith Negron, 40, was sentenced by U.S. District Judge James Lawrence King in
the Southern District of Florida. Judge King ordered Negron to pay more than $87
million in restitution, jointly and severally with her co-defendants. Negron was
also sentenced to three years of supervised release following her prison term.
Two other owners of ATC, Lawrence Duran and Marianella Valera, were sentenced in
September 2011 to 50 and 35 years in prison, respectively, for their roles in
the scheme. These sentences are the three longest prison sentences ever imposed
in a Medicare Fraud Strike Force case.

 

On Aug. 24, 2011, after a six-day trial, a federal jury in the Southern District
of Florida found Negron guilty of 24 felony counts, including conspiracy to
commit health care fraud, health care fraud, conspiracy to pay and receive
illegal health care kickbacks, conspiracy to commit money laundering, money
laundering and structuring to avoid reporting requirements.

 

Evidence at trial demonstrated that Negron, along with Duran and Valera,
masterminded and executed a scheme to defraud Medicare beginning in 2002 and
continuing until they were arrested in October 2010. Evidence at trial
established that the three owners submitted false and fraudulent claims to
Medicare through ATC, a Florida corporation headquartered in Miami that
purportedly operated partial hospitalization programs (PHPs) in seven different
locations throughout South Florida and Orlando. A PHP is a form of intensive
treatment for severe mental illness. Negron and her co-conspirators also used a
related company, American Sleep Institute (ASI), to submit fraudulent Medicare
claims.

 

According to the evidence at trial, Negron, Duran, Valera and others paid bribes
and kickbacks to owners and operators of assisted living facilities and halfway
houses and to patient brokers in exchange for delivering ineligible patients to
ATC and ASI. In some cases, the patients received a portion of those kickbacks.
Throughout the course of the conspiracy, millions of dollars in kickbacks were
paid in exchange for Medicare beneficiaries, who did not qualify for PHP
services, to attend treatment programs that were not legitimate PHP programs, so
that ATC and ASI could bill Medicare for more than $205 million in unnecessary
or illegitimate services.

 

According to the evidence, Negron and her co-conspirators used another company
they owned and operated, Medlink Professional Management Group Inc., to conceal
the fraud and kickback scheme from Medicare and law enforcement. Once Medicare
paid ATC and ASI for the fraudulently billed services, Duran, Valera and others
transferred the money to Medlink. Evidence at trial showed that Negron and her
co-conspirators used Medlink to pay millions of dollars in kickback payments by
using an extensive money laundering scheme.

Evidence at trial demonstrated that Negron signed kickback checks to patient
recruiters whose only jobs at ATC were to provide patients from halfway houses
or assisted living facilities. Evidence at trial also established that Negron
and others caused the alteration of patient files and therapist notes for the
purpose of making it falsely appear that patients being treated by ATC qualified
for PHP treatments and that the treatments provided were legitimate PHP
treatments. For instance, evidence established that Negron would “robo-sign”
patient files, meaning she would sign patient documents as a supervising
therapist without having treated the patients. The evidence also showed that
Negron signed files as though she had been in two places at the same time, in
Boca Raton and Homestead, Fla. Evidence further revealed that Negron knew
doctors were similarly signing patient files without reading them or seeing the
patients. In some cases, Negron provided the doctors with the files for their
signature. According to evidence presented at trial, Negron and her
co-conspirators billed Medicare for PHP treatment, including group
psychotherapy, provided to a patient who was in a neuro-vegetative state, who
would not lift her head or respond. The evidence also showed that Negron and her
co-conspirators caused doctors to refer ATC patients to ASI even though the
patients did not qualify for sleep studies.

 

Negron has been in federal custody since her conviction.

 

ATC and Medlink pleaded guilty in May 2011 to conspiracy to commit health care
fraud. ATC also pleaded guilty to conspiracy to defraud the United States and to
pay and receive illegal health care kickbacks. The corporations were sentenced
to five years of probation per count and ordered to pay restitution of $87
million. Both corporations have been defunct since their owners were arrested in
October 2010. A top manager, Margarita Acevedo, was sentenced in September 2011
to 91 months in prison.

 

Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of
the Justice Department’s Criminal Division; U.S. Attorney Wifredo A. Ferrer of
the Southern District of Florida; Special Agent-in-Charge John V. Gillies of the
FBI’s Miami Field Office; and Special Agent-in-Charge Christopher Dennis of the
HHS Office of Inspector General (HHS-OIG), Office of Investigations Miami
office.

 

The case was prosecuted by Trial Attorney Jennifer L. Saulino and Acting
Assistant Chief Benjamin D. Singer of the Criminal Division’s Fraud Section. The
case was investigated by the FBI and HHS-OIG, and was brought as part of the
Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section
and the U.S. Attorney’s Office for the Southern District of Florida.

 

Since its inception in March 2007, the Medicare Fraud Strike Force operations in
nine locations have charged more than 1,140 defendants that collectively have
billed the Medicare program for more than $2.9 billion. In addition, HHS’s
Centers for Medicare and Medicaid Services, working in conjunction with the
HHS-OIG, are taking steps to increase accountability and decrease the presence
of fraudulent providers.

 

To learn more about the Health Care Fraud Prevention and Enforcement Action Team
(HEAT), go to www.stopmedicarefraud.gov.

Updated November 29, 2021

--------------------------------------------------------------------------------

Component
Criminal Division
Press Release Number: 11-1604



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