Three Nurses, Including Two Owners of a Home Health Care Agency, and the Company Among Six Defendants Indicted in Alleged Conspiracy Involving Kickbacks for Medicare Patients

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CHICAGO—A home health care agency insuburban Lincolnwood, two nurses who are part owners of the company, a thirdnurse affiliated with them, and two marketers were indicted on federal chargesfor allegedly participating in a conspiracy to pay and receive kickbacks inexchange for the referral of Medicare patients for home health care services,federal law enforcement officials announced today. Defendants Marilyn Maravillaand Junjee L. Arroyo, both part owners of Goodwill Home Healthcare Inc., andthree other defendants allegedly conspired to pay and receive approximately$400,000 in kickbacks to themselves, nurses, marketers, and others for thereferral and retention of Medicare patients that enabled Goodwill to billMedicare approximately $5 million.
Also indicted were Ferdinand Echavia, alicensed nurse who referred patients to Goodwill, and Jean Holloway andRakeshkumar Shah, both of whom marketed Goodwill’s services to Medicarepatients.
The 29-count indictment was returned bya federal grand jury last Thursday and unsealed on Friday following the arrestsof Holloway, 41, of Bellwood, and Shah, 46, of Des Plaines. Both were releasedon bond after pleading not guilty in U.S. District Court.
Maravilla, 55, of Chicago; Arroyo, 44,of Elmhurst; and Echavia, 39, of Chicago, all licensed nurses, together withGoodwill as a corporate defendant, are scheduled to be arraigned on August 22in U.S. District Court.
All six defendants were charged with onecount of conspiracy to pay and receive illegal kickbacks for Medicare patientreferrals, and each defendant was also charged with the following number ofcounts of violating the anti-kickback statute: Goodwill, 16 counts; Maravilla,15 counts; Arroyo, 16 counts; Echavia, five counts; Holloway, three counts; andShah, eight counts.
Maravilla began working as a nurse atGoodwill in August 2008 and, sometime during the next two months, became anowner and the administrator of the agency. Arroyo was also an owner andGoodwill’s director of nursing.
The indictment was announced by Gary S.Shapiro, Acting United States Attorney for the Northern District of Illinois;Lamont Pugh III, Special Agent in Charge of the Chicago Region of the U.S.Department of Health and Human Services, Office of Inspector General; and RobertD. Grant, Special Agent in Charge of the Chicago Office of the Federal Bureauof Investigation.
“Paying kickbacks to refer Medicarepatients is illegal. Money cannot be permitted to be the basis of a medicalreferral over medical necessity or quality of service,” Mr. Pugh said. Theinvestigation is continuing, the officials said.
Between August 2008 and July 2010, theindictment alleges that Maravilla, Arroyo, and two other individuals—one anofficer and an owner of Goodwill, and the other a certified public accountantand Goodwill’s bookkeeper—paid and caused Goodwill to pay kickbacks to nurses,marketers, and other home health care workers who referred patients toGoodwill; assisted in re-certifying patients as homebound; or caused patientsto begin new 60-day care cycles of home health care with Goodwill. By offeringkickbacks, Maravilla, Arroyo, and others sought to increase Goodwill’s patientcensus and to enrich themselves and Goodwill. During this time, Goodwillobtained referrals of approximately 900 cycles of home health care, includingnew patients and the re-certification of existing patients for additional60-day cycles of care.
According to the indictment, the amountof the kickback payments varied but generally ranged from approximately $400 to$700 for each new care cycle and approximately $100 to $300 for eachre-certification. The payments were intended to induce nurses, marketers, andothers in the home health industry to refer patients to Goodwill for servicesto be reimbursed by Medicare, the indictment alleges.
In January 2009, Maravilla and Arroyoallegedly created and circulated to Goodwill employees and affiliates a memo onGoodwill’s letterhead that set forth a structure for kickbacks relating topatient re-certifications, disguising the illegal payments as “bonuses.” Thememo provided that a $100 “bonus” would be given to nurses who re-certified apatient for a third cycle, and a $200 “bonus” would be given to a nurse whore-admitted a discharged patient a month after the discharge date.
In order to make certain kickbackpayments in cash, Maravilla and Arroyo obtained Goodwill checks payable to themand recorded on Goodwill’s books as “loans,” but they allegedly cashed thechecks and used the funds to pay kickbacks to marketers.
The indictment alleges that Maravilla,Arroyo, and Goodwill’s bookkeeper paid Echavia cash kickbacks totalingapproximately $28,000 and also paid kickbacks totaling approximately $56,000 toa company owned and controlled by Echavia. Maravilla and Arroyo allegedlycaused Goodwill to pay approximately $10,400 in kickbacks to Holloway, andkickbacks totaling approximately $21,500 to Shah. In addition, the two ownerscaused Goodwill to pay approximately $20,000 in kickbacks to two othermarketers who were not charged.
The indictment also alleges thatMaravilla and Arroyo caused Goodwill to pay at least $58,000 in kickbacks to atleast three other nurses who were affiliated with Goodwill and who were notcharged. In addition to receiving salary and profits from Goodwill, Maravillaand Arroyo allegedly caused the agency to pay kickbacks to them as well.Maravilla allegedly received approximately $138,000 in kickbacks for patientreferrals, and Arroyo allegedly received approximately $44,000 in kickbacks forpatients that either he or his wife referred to Goodwill.
Conspiracy and each count of violatingthe anti-kickback statute carry a maximum penalty of five years in prison and a$250,000 fine. If convicted, the court must impose a reasonable sentence underfederal statutes and the advisory United States Sentencing Guidelines.
The government is being represented byAssistant U.S. Attorneys Shoshana Gillers and John Kness.
The public is reminded that anindictment is not evidence of guilt. The defendants are presumed innocent andare entitled to a fair trial at which the government has the burden of provingguilt beyond a reasonable doubt.
The case falls under the umbrella of theMedicare Fraud Strike Force, which expanded operations to Chicago in February2011, and is part of the Health Care Fraud Prevention and Enforcement ActionTeam (HEAT), a joint initiative announced in May 2009 between the JusticeDepartment and HHS to focus their efforts to prevent and deter fraud andenforce current anti-fraud laws around the country. Approximately four dozendefendants have been charged in health care fraud cases since the strike forcebegan operating in Chicago last year. In unrelated cases indicted in late June2012, 10 defendants, including the owners of two Chicago home health careagencies and three physicians, were charged in two separate alleged Medicarereferral kickback schemes.
Since their inception in March 2007,strike force operations in nine locations have charged more than 1,330defendants who collectively have falsely billed the Medicare program for morethan $4 billion. In addition, the HHS Centers for Medicare and MedicaidServices, working in conjunction with the HHS-OIG, are taking steps to increaseaccountability and decrease the presence of fraudulent providers.
To learn more about the Health Care FraudPrevention and Enforcement Action Team (HEAT), go to:www.stopmedicarefraud.gov.