A cautionary tale about the pitfalls present in a $150 million Opioid healthcare fraud scheme.
About the Author:
My name is Jim Keating. I attended college in Philadelphia, PA and law school in Wilmington, DE. Our team at Compliance Mitigation offers services to help people develop mitigation strategies that lead to lower sentences if they’ve been charged with crimes.
Upon completion of this Case Study, participants will be able to:
- Understand aspects of healthcare fraud and money laundering;
- Describe potential penalties for healthcare fraud and money laundering;
- Understand how white-collar professionals can become unwitting participants in criminal activities;
- Identify basic concepts of criminal forfeiture laws; and
- Explain basic implications of guilty pleas and sentencing.
Business owners, business leaders, and white-collar professionals.
Healthcare Fraud, Opioids, Fraud, Money Laundering, Guilty Plea, Sentencing, Forfeiture, Medicare Fraud Strike Force
Current State of the Industry:
According to the National Institute on Drug Abuse, nearly 50,000 Americans die annually due to opioid addiction. Physicians, medical professionals, and other white-collar professionals are involved in issuing and filling these prescriptions each day, most times when the prescription would not be medically necessary. Physicians and their staff, business owners and white-collar professionals oftentimes feel pressure from unexpected places, whether personal or professional. These pressures can create challenges forcing individuals to seek out quick solutions without considering all possible consequences. Government agencies will investigate wrongdoing, unintentional or not. White-collar professionals who do not view themselves as being “criminals” frequently find themselves being accused of white-collar crimes. In this case, we see a flaw in one CEO’s thinking patterns. We also see the consequences that followed.
Future State of the Industry:
Oftentimes white-collar professionals do not realize the power government investigators wield. Government investigators always have the benefit of hindsight and view white-collar subjects through these lenses. Business leaders should make decisions with a full understanding of how government investigators will perceive them. At Compliance Mitigation, we want to eliminate instances where our business owner and business leader clients state that they did not know their decisions could result in victims – as government investigators view matters. Knowledge of consequences may result in people making better decisions, helping them avoid being vulnerable to federal investigations and prosecutions for white-collar crimes.
This case study involves an investigation by the Medicare Fraud Strike Force of over 22 defendants, including more than a dozen physicians who became involved in an opioid healthcare fraud scheme prescribing unnecessary opioids to their patients and seeking fraudulent reimbursement from Medicare. Some of the physicians in the medical practice became unwitting participants in the scheme, while others knew the fraudulent nature of the situation. Business owners, business leaders, and other white-collar professionals can become the target of a federal investigation for actions they did not know amounted to illegal behavior. At Compliance Mitigation, we show our business clients how to avoid these traumatic and life-altering situations.
This case study profiles Mashiyat Rashid, CEO of Tri-County Wellness Group operating healthcare facilities, pain clinics, and laboratories in both Michigan and Ohio. Rashid owned Tri-County and operated all of the locations of his healthcare business. All the information in this Background came from three sources: an October 2018 Justice Department press release, a March 2021 Justice Department press release, and a newspaper article on this topic.
According to the federal prosecutors, from 2008 to 2016, Rashid and other physicians at Tri-County developed a corporate policy for Tri-County Wellness Group to administer unnecessary injections to patients in exchange for prescriptions of unnecessary opioids, totaling more than 6.6 million doses. Many of the Tri-County patients lived in homeless shelters, and these unnecessary injections caused more pain than their original illness. Some of the patients suffered legitimate pain while others sought relief from drug addiction. According to the evidence adduced at a co-defendant’s trial, Rashid and Tri-County received more money for the injections than any other medical clinic in the United States, intentionally targeting the Medicare reimbursement program.
Other evidence presented at a co-defendant’s trial showed Rashid hired some doctors who willingly disregarded patient care in the pursuit of money while others practiced medicine unaware of the nature of their crimes. Rashid incentivized the physicians to follow the Tri-County protocol of offering opioid prescriptions and administering unnecessary injections by offering to split the Medicare reimbursements for these lucrative procedures. The specific injections used had nothing to do with the medical needs of the patients but instead had been selected by the physicians to be administered because they happened to be the highest-paying injection procedures reimbursed by Medicare.
Investigators also uncovered 100 percent of the Medicare claims filed by Tri-County for coverage did not qualify for reimbursement by Medicare, and Medicare suspended the medical billing privileges for one of Rashid’s pain clinics involved in this scheme. In order to conceal the continued fraudulent billing practices, Rashid created new shell companies and enrolled them with Medicare. Federal investigators and prosecutors found this to constitute money laundering and included this charge against the defendants. Federal prosecutors define money laundering as “disguising the financial proceeds of crime and integrating it into a legitimate financial system. After being laundered, the financial proceeds of crime become difficult to distinguish money from legitimate financial resources, and the funds can be used by criminals without detection.” To date, 12 physicians have either pleaded guilty or have been found guilty by a jury relating to Tri-County.
The evidence used against Rashid included testimony from a co-defendant’s trial indicating that Rashid knew prescribing prescription painkillers for his patients may be addictive and maybe deadly. Rashid moved forward with his plan anyway, dragging many white-collar professionals at his healthcare facility down with him. Unfortunately for his employees, some merely lost their jobs, others happened to be investigated by the federal government, tried and found guilty, or pled guilty to their crimes. Many people who have been convicted of white-collar crimes did not even know a crime had been committed, placing them in a bad situation. These folks became unwitting criminals not knowing what they did would be considered a crime or understanding the potential consequences.
At Compliance Mitigation, we recommend more training, and better training for white-collar professionals to help them avoid these tragic circumstances. At Compliance Mitigation we profile the personal stories of white-collar workers who unwittingly and unknowingly broke the law during their ordinary course of business creating chaos and havoc in their lives. When people understand how authorities view crimes like healthcare fraud and money laundering, they may be more inclined to make law-abiding decisions.
At this point, Rashid has been sentenced to 15 years in prison. Rashid’s sentence includes an order to pay $51 million in restitution to Medicare as well as forfeiture of property obtained from the fraud scheme, including more than $11.5 million in commercial and residential real estate. Forfeiture means the federal government seizes defendants’ assets as part of the case against him and typically auctioned off to pay part or all or a part of any fines or restitution orders. Rashid’s best option now will be to take as many steps as possible to reduce his sentence and time spent incarcerated and using his prison time in the best way possible.
- Health Care CEO Pleads Guilty to $150 Million Health Care Fraud Scheme Involving Harmful Injections and Unnecessary Prescription of Millions of Opioids | OPA | Department of Justice
- CEO Sentenced to Prison in $150 Million Health Care Fraud, Opioid Distribution, and Money Laundering Scheme | OPA | Department of Justice
- Tri-County Wellness Group CEO Mashiyat Rashid Sentenced to 15 Years in Prison for Medicare Fraud (usaherald.com)