Consumer Fraud

Four Florida hospital execs convicted for their roles in giant Medicare fraud scheme

osha whistle Four Florida hospital execs convicted for their roles in giant Medicare fraud schemeA federal jury has convicted four South Florida individuals on multiple criminal charges for their participation in designing and conducting a scheme to defraud Medicare of millions of dollars.

The U.S. Justice Department said that four executives with Hollywood Pavillion, a mental-health hospital in Hollywood, Fla., participated in a $70-million scheme to defraud Medicare by bribing, falsifying documents, and submitting false claims to the government health care program.

“The defendants convicted today participated in a massive scheme that attempted to defraud the United States of approximately $70 million by taking advantage of Medicare beneficiaries,” Acting Assistant U.S. Attorney General Raman said in a statement.  “By paying bribes to a network of patient recruiters and falsifying documents, the defendants created the illusion of providing intensive psychiatric care to qualifying patients, when in reality they provided no care of substance.”

The convictions came after an investigation by the Medicare Fraud Strike Force, a coalition of investigators from multiple federal agencies devoted to fighting Medicare fraud and recovering vital health care funds.

Karen Kallen-Zury, 59, of Lighthouse Point, Fla., Daisy Miller, 44, of Hollywood, Fla., and Michele Petrie, 64, of Ft. Lauderdale, Fla. were each found guilty on multiple health care fraud, wire fraud, and bribery charges, while Christian Coloma, 49, of Miami Beach, Fla., was convicted of one count of conspiracy to pay bribes in connection with Medicare,

According to the Justice Department, the four executives caused the submission of false and fraudulent claims to Medicare through Hollywood Pavilion, a state-licensed psychiatric hospital located that purportedly provided inpatient psychiatric care, intensive outpatient psychiatric care, and other mental-health services. The defendants paid illegal bribes and kickbacks to patient brokers in order to obtain Medicare beneficiaries as patients, even though those patients did not qualify for psychiatric treatment.

The defendants then submitted claims to Medicare for the patients who were acquired through bribes and kickbacks and produced false documents to cover up the fraud. The scheme went on from at least 2003 through August 2012, the Justice Department said.

Formed in 2007, the Medicare Fraud Strike Force operates nine major cities across the country. It has charged more than 1,500 defendants for fraudulently billing the Medicare program for more than $5 billion.

In addition to the Medicare Fraud Strike Force, the Justice Department also relies on the qui tam or whistleblower provisions of the False Claims Act (FCA), which allow individuals who witness fraud, waste, abuse, and other wrongdoing to sue on behalf of the United States and share in the recovery. Whistleblower laws are effective tools in fighting fraud because they allow private individuals to be the “eyes and ears” for fraud detection – a task that government regulators aren’t equipped to carry out effectively and thoroughly.


The U.S. Department of Justice