The attorneys general of North Carolina and South Carolina and federal prosecutors say eight people involved in a complex Medicaid scam allegedly bilked more than $21 million in federal funds by exploiting children’s and vulnerable patients’ medical information, mainly in South Carolina.
The sting was part of a nationwide crackdown announced Monday by federal prosecutors upon 324 people accused of defrauding $14.6 billion in healthcare scams in 12 states.
At a press conference in Charlotte Monday morning, South Carolina Attorney General Alan Wilson joined North Carolina Attorney General Jeff Jackson, FBI Special Agent in Charge Jim Barnacle, and U. S. Attorney for the Western District of North Carolina Russ Ferguson to announce arrests in a five-year investigation – called Operation Border War – involving a scheme that allegedly took advantage of a South Carolina law that allows Medicaid providers to enroll companies located within 25 miles of the state.
“ You have to wonder if these people went across state borders to hide the scheme,” Ferguson said.
The attorneys general said they became aware of the scam in 2020, then built their cases with the help of several partners at the state and federal levels.
“T his [scam] was built around behavioral health programs that exploited our citizens for years,” Wilson said.
The scheme, as Wilson described it, involved fraudsters creating bogus companies, recruiting legitimate behavioral healthcare providers, getting professional license and national provider number information from their applications, and then using that information to start filing fraudulent claims connected to actual patients.
Wilson said most of the providers recruited into the scheme “were duped. There were a couple who actually were complicit in this scheme, but the vast majority of them did not know this.”
Officials did not say how many providers were part of the scheme, unknowingly or complicitly.
Officials did, however, emphasize whose medical information was at the center of the scam.
“Nearly all of [the Medicaid beneficiaries] were severely disabled children,” Wilson said. “Children who were quadriplegic or nonverbal or autistic or had some other mental health issue that was significant or severe. [The alleged scammers] would start billing for services that these … children never received.”
The accused scammers also allegedly sold children’s beneficiary information for $200 to $300 to other scammers, Wilson said.
Ferguson’s office added that scammers allegedly also received and paid bribes and kickbacks in the scheme.
Wilson said some red flags early in the investigation included notes about a child’s behavior that would not be possible for that child.
“By way of example, on a child who was a quadriplegic, they were saying this child was being disruptive and running around the classroom, or yelling things when the child was nonverbal,” Wilson said.
Some “children” were creations of federal agents.
“ We were able to follow the fraud because whenever that beneficiary claim would be filed, we knew that was a fake kid,” Wilson said.
Jackson said data mining played a major role in helping the North Carolina State Bureau of Investigation’s Medicaid Criminal Investigation Unit build cases against suspected fraudsters.
“We found out about this when our Medicaid investigation division did some forensic data work and saw some … very unusual billing practices,” he said.
Jackson also added a warning to would-be fraudsters.
“We have never had more forensic tools for detecting fraud,” he said. “You have to provide a lot of data to us if you are asking the taxpayers for money. With that data that you provide to us, we have new forensic tools to engage in the type of data mining that will spot your fraud. If you are committing fraud as a Medicaid provider, you have never been more vulnerable.”
Those charged with conspiracy to commit health care fraud and to pay and receive illegal kickbacks, according to the U.S. Department of Justice are:
· Donald Calvin Saunders, 62, of Charlotte. Saunders is also charged with six counts of health care fraud; one count of unlawful purchase of beneficiary identification numbers; one count of conspiracy to commit money laundering; and three counts of money laundering;
· Vanessa Ragin-Boatright, 59, of Manning, S.C. Boatright is also facing two counts of health care fraud; one count of unlawful purchase of beneficiary identification numbers; and one count of conspiracy to commit money laundering;
· Dajuan Strickland, 47, of Charlotte and Buffalo, N.Y. Strickland is also charged with three counts of health care fraud; two counts of unlawful purchase of beneficiary identification numbers; one count of conspiracy to commit money laundering; and three counts of money laundering;
· Cynthia Jenkins Harris, 60, of Elgin. Harris is also facing one count of health care fraud and one count of conspiracy to commit money laundering;
· Latarsa Hitchcock, 56, of Jacksonville, N.C.;
· Stephanie Corbett, 59, of Jonesboro, Georgia;
· Karen McClary, 51, of Kingstree, S.C.
David Corey Hill, 54, of Concord, N.C., who allegedly was also part of the scheme was charged separately via a criminal bill of information with conspiracy to commit health care fraud and money laundering. Hill has agreed to plead guilty and is expected to appear in federal court for a plea hearing in the days ahead.
