Miami Man Sentenced to More Than a Decade in Federal Prison for Million-Dollar Medicaid Fraud

VARIAN V. SCOTT, 36, of Miami, Florida, was sentenced today by United States District Judge Charles A. Pannell, Jr. to federal prison on charges of health care fraud and conspiracy to commit health care fraud. The charges arose out of a scheme to present forged doctors’ prescriptions for high-dollar cancer and HIV medications to dozens of Atlanta-area pharmacies using the identities of Georgia Medicaid recipients, causing the cost of the medications to be billed to the Georgia Medicaid program, and resulting in an approximately $1.1 million loss to state and federal taxpayers.

Georgia Attorney General Thurbert Baker said, “The defendant and his cronies not only defrauded Georgia’s taxpayers, but they endangered the patients who were on the receiving end of these re-sold prescriptions. These medications must be handled and stored with extreme care to preserve their effectiveness, and street sellers aren't known for running hygienic operations. Prison is the appropriate place for Scott, and today's prison sentence sends a clear message that law enforcement will protect taxpayer resources and preserve the integrity of these critical treatment programs.”

FBI Atlanta Special Agent in Charge Gregory Jones said, “Mr. Scott will now sit in prison for many years hopefully thinking about the crimes he committed and their full impact on the people that could have used the help that was, instead, diverted to his bank account through greed. Medicaid fraud and healthcare fraud in general cannot and will not be tolerated and the FBI recognizes these crimes for what they are, acts of greed and indifference to others.”

Dr. Rhonda Medows, Commissioner of the Georgia Department of Community Health, which administers Georgia Medicaid, said, “This case is a perfect example of what government agencies can accomplish when they share information and partner on key initiatives. With an increasing number of people in need of health care, it is important that we continue to work with our partners to ensure that we safeguard taxpayer dollars.”

SCOTT was sentenced to 12 years in federal prison, to be followed by three years of supervised release. There is no parole in the federal justice system. SCOTT was also ordered to pay $1,142,720.67 in restitution to Georgia Medicaid. SCOTT was convicted of these charges on October 5, 2009, after a four-day jury trial.

According to Acting United States Attorney Sally Q. Yates, the charges, and other information presented in court: SCOTT directed and funded a health care fraud conspiracy between September 2005 and April 2006. SCOTT and his cousin, HEZRON D. COLLIE, 29, of Atlanta, Georgia, bought blank doctors’ prescription pads from insiders at Emory University’s Winship Cancer Institute and two other doctor’s offices, one in Atlanta and one in Florida. SCOTT and COLLIE then bought names, dates of birth, and Medicaid numbers of dozens of Georgia Medicaid recipients, and forged approximately 164 doctors’ prescriptions for Neupogen, a chemotherapy drug, and multiple medications used to treat HIV, using the patient Medicaid information. A one-month supply of Neupogen costs approximately $10,000.

SCOTT and COLLIE then presented the forged prescriptions along with the patient information to CVS, Publix, Walgreens, Kroger, and Eckerd pharmacies throughout the Atlanta area. SCOTT and COLLIE also recruited a pharmacist at one of the Publix pharmacies, and a pharmacy technician at one of the Kroger pharmacies, to help facilitate the scheme. The pharmacies billed approximately $1.1 million to Georgia Medicaid for the cost of the medications that SCOTT and COLLIE fraudulently acquired. The evidence at trial also showed that after obtaining the medications, SCOTT and COLLIE transported them to South Florida for sale on the so-called “gray market,” in which there is significant demand for such medications.

SCOTT and COLLIE were indicted on December 16, 2008. On June 4, 2009, COLLIE pleaded guilty to one count of conspiracy and one count of health care fraud charged in the indictment, and to a criminal information charging him with one count of health care fraud for a related scheme in which he participated between May and June of 2008, and cooperated with authorities. COLLIE’s sentencing is scheduled to take place before Judge Pannell tomorrow, Tuesday, December 15, 2009, at 10:00 a.m. The Publix pharmacist also cooperated with authorities and pleaded guilty to related charges in Gwinnett County Superior Court on January 13, 2009. The pharmacy technician was not charged in the scheme but cooperated with law enforcement. The pharmacies and the doctors also cooperated in the investigation.

The case was the culmination of a joint investigation conducted by the Federal Bureau of Investigation, Georgia Bureau of Investigation, Georgia Drugs & Narcotics Agency, Georgia Department of Community Health, and the Georgia Medicaid Fraud Control Unit. Valuable assistance was also provided by the Georgia State Patrol, Twiggs County Sheriff’s Office, Clayton County Sheriff’s Office, Gwinnett County Police Department, and the Florida Department of Law Enforcement.

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Miami Man Convicted in Million-Dollar Medicaid Fraud

A federal jury today returned a guilty verdict against VARIAN V. SCOTT, 36, of Miami, Florida, in a health care fraud scheme that used forged doctors’ prescriptions for high-dollar cancer and HIV medications and caused the cost of those medications to be billed to the Georgia Medicaid program, resulting in an approximately $1.1 million loss to state and federal taxpayers.

Acting United States Attorney Sally Quillian Yates said of the verdict, “The Georgia Medicaid Fraud Control Unit confirms that the conviction of this defendant and his co-conspirator are the first convictions in the State of Georgia for a fraud scheme in which Medicaid was defrauded through stolen and forged prescriptions and stolen patient information. Identity theft, wherever it occurs, must be stopped. State and federal agencies in Georgia are geared up to pursue and stop identity thieves from defrauding our health care programs, and from victimizing others, including innocent patients and doctors, who are hurt by such schemes.”

Georgia Attorney General Thurbert Baker said of the case, “The defendant and his cronies harmed not only the taxpayers by defrauding the state Medicaid program, but they caused potential harm to the individuals who were on the receiving end of these re-sold prescriptions. These cancer-fighting medications must be handled and stored with extreme care to preserve their effectiveness, and street sellers aren't known for running hygienic operations or for making sure they properly handle these sensitive medications. At the end of the day, this verdict sends a clear message that this type of fraud will result in significant punishment in order to protect taxpayer resources and to preserve the integrity and efficacy of these cancer treatment programs.”

FBI Atlanta Special Agent in Charge Gregory Jones said, “Now, more than ever, it is imperative that federal funds within the health care arena be directed towards those that need it. Those that choose to exploit and defraud these government programs also are depriving many people in need of the medical care that these programs provide. The FBI will continue to work with its law enforcement partners and industry experts in pursuing these types of criminal activities and exposing those individuals responsible who, by their actions, demonstrate little or no compassion for their fellow man but instead are driven by greed.”

According to Acting United States Attorney Yates, the charges, and other information presented in court: Today the jury found SCOTT guilty of running a health care fraud conspiracy between September 2005 and April 2006. SCOTT and his cousin, HEZRON COLLIE, 29, of Atlanta, Georgia, bought blank doctors’ prescription pads from insiders at Emory University’s Winship Cancer Institute and two other doctor’s offices, one in Atlanta and one in Florida. SCOTT and COLLIE then bought names, birthdates, and Medicaid numbers of dozens of Georgia Medicaid patients, and forged approximately 164 doctors’ prescriptions for “Neupogen,” a chemotherapy drug, and multiple medications used to treat HIV, using the patient Medicaid information. A one-month supply of Neupogen costs approximately $10,000. SCOTT and COLLIE then presented the forged prescriptions along with the patient information to CVS, Publix, Walgreens, Kroger, and Eckerd pharmacies throughout the Atlanta area. SCOTT and COLLIE also recruited a pharmacist at one of the Publix pharmacies, and a pharmacy technician at one of the Kroger pharmacies, to help facilitate the scheme.

According to the evidence, SCOTT and COLLIE picked up the drugs from the pharmacies, removed the pharmacy adhesive labels using lighter fluid, and then transported the drugs to south Florida, where SCOTT had a connection who bought them at 30 percent of their wholesale cost. Expert testimony at trial established that there is significant demand for the medications that SCOTT and COLLIE fraudulently acquired. Testimony established that there is currently a multi-billion dollar gray market for stolen, illegally obtained, or counterfeit pharmaceuticals, and that such medications often end up traveling through the stream of commerce back to shelves of legitimate pharmacies.

SCOTT and COLLIE were indicted on December 16, 2008. On June 4, 2009, COLLIE pleaded guilty to one count of conspiracy and one count of health care fraud charged in the indictment, and to a criminal information charging him with one count of health care fraud for a related scheme in which he participated between May and June of 2008. The Publix pharmacist cooperated with authorities, pleaded guilty to related charges in Gwinnett County Superior Court on January 13, 2009, and awaits sentencing. The pharmacy technician was not charged in the scheme but cooperated with law enforcement. The pharmacies and the doctors also cooperated in the investigation.

The pharmacies billed approximately $1.1 million to Georgia Medicaid for the cost of the medications that SCOTT and COLLIE fraudulently acquired.

SCOTT could receive a maximum sentence of 10 years in prison and a fine of up to $250,000 on each of the 21 counts. Sentencing is scheduled for Monday, December 14, 2009 at 10:00 a.m., before United States District Judge Charles A. Pannell, Jr. In determining the actual sentence, the Court will consider the United States Sentencing Guidelines, which are not binding but provide appropriate sentencing ranges for most offenders. A sentencing date for COLLIE has not yet been set.

The case is the culmination of a joint investigation conducted by the Federal Bureau of Investigation, Georgia Bureau of Investigation, Georgia Drugs & Narcotics Agency, Georgia Department of Community Health, and the Georgia Medicaid Fraud Control Unit. Valuable assistance in this case has also been provided by the Georgia State Patrol, the Twiggs County Sheriff’s Office, the Clayton County Sheriff's Office, and the Gwinnett County Police Department.

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“Alternative Medicine” Clinic Operator Sentenced to Federal Prison for Health Care Fraud Chaunsay Beckwith Defrauded Insurance Companies and Medicare

“Alternative Medicine” Clinic Operator Sentenced to Federal Prison for Health Care Fraud
Chaunsay Beckwith Defrauded Insurance Companies and Medicare in Hyperbaric Therapy Scheme


CHAUNSAY BECKWITH, 46, of Tucker, Georgia, was sentenced today by Senior United States District Judge Marvin H. Shoob to serve nearly 5 years in federal prison on a charge of health care fraud.

United States Attorney David E. Nahmias said of the case, “Hyperbaric chambers have a number of legitimate medical uses, as varied as helping burn victims and scuba divers in their recovery. This defendant turned a hyperbaric chamber into a scheme for generating over a million dollars in fraudulent claims. Health care fraud raises the costs of health care for everyone, and those responsible for such fraud may end up prison like this defendant.”

BECKWITH was sentenced to 4 years, 8 months in prison to be followed by 3 years of supervised release, ordered to pay $1,035,144 in restitution, and perform 50 hours of community service. BECKWITH pleaded guilty to the charge on April 7, 2009.

According to United States Attorney Nahmias and other information presented in court: Between 2003 and 2007, BECKWITH, an owner/operator who does not hold any type of medical license, provided hyperbaric oxygen therapy to numerous patients in her clinic, International Alternative Medicine, Inc., located at 4450 Hugh Howell Road, in Tucker, Georgia. None of the patients were diagnosed with medical conditions that made them eligible to receive payments from health care benefit programs. BECKWITH submitted $1,577,827 in claims to insurance companies and Medicare, which included false diagnosis codes that enabled her to fraudulently receive $1,035,144 in payments for the hyperbaric chamber treatments.

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Conspirator in $12 Million Medicare Fraud Ring Sentenced to Prison

ALAIN AMADOR, 31, of Miami, Florida, was sentenced today by Senior United States District Judge Jack T. Camp to serve over 4 years in prison on a charge of conspiracy to commit health care fraud.

United States Attorney David E. Nahmias said, “This was a bold crime in which the defendant and his conspirators made up phony medical companies and billed Medicare for millions of dollars of fake medical services. This defendant, who was a key part of the scheme, will now spend several years in federal prison. The good news is that most of the money the conspirators attempted to get was either not paid or was seized by law enforcement. The crime was identified early because several Medicare patients carefully reviewed and reported discrepancies in the paperwork they received. We thank those citizens, who with many others are on the front lines in our battle against health care fraud.”

“We are proud to be part of the Federal team that brought AMADOR to justice," said Melody Jackson, Special Agent in Charge of the Office of Inspector General's Atlanta Regional Office, who also warned, “Criminals can rest assured that if they attempt to defraud federal health care programs and their patients, they will be held accountable.”

AMADOR was sentenced to 4 years, 3 months in prison to be followed by 3 years of supervised release, ordered to pay restitution in the amount of $3.9 million, and ordered to perform 200 hours of community service. AMADOR pleaded guilty to the charges on March 3, 2009.

According to United States Attorney Nahmias and the information presented in court: AMADOR and his conspirators set up a series of fake medical clinics in the Atlanta area. They leased space in the names of the companies, opened bank accounts, filed corporate documents in the names of the companies, and ultimately applied for and received Medicare billing numbers. However, the companies existed in name only. They maintained no operations, employees, or equipment. Using improperly obtained identity information of actual doctors and Medicare patients, the conspirators filed more than $12 million in Medicare claims for phony services in less than a year.

Of the amount billed, Medicare paid approximately $3 million before the scheme was uncovered and the payments were halted. As part of this criminal case, the United States seized approximately $2 million of this money, some of which was still present in bank accounts when the scheme was identified, and some of which was in the form of checks that were sitting in the fake offices waiting to be picked up and deposited. Most of the remainder of the money was transferred to or deposited in foreign bank accounts.

AMADOR, who has a nursing degree, helped set up and maintain the fake companies. He assisted in incorporating the companies and opening the bank accounts. He periodically traveled from Miami, where most of the conspirators were based, to Atlanta, to keep up appearances at the office space, check the mail (including picking up outstanding Medicare checks), and pay rent.

The investigation is still ongoing. One named co-defendant remains a fugitive. JESUS LLOSA, a Cuban national, was last known to live in Miami, Florida. This case was investigated by Special Agents of the Federal Bureau of Investigation and the Department of Health and Human Services, Office of the Inspector General.

Assistant United States Attorneys Justin S. Anand and Gerald S. Sachs prosecuted the case.

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“Alternative Medicine” Clinic Operator Arraigned on Federal Health Care Fraud Charges

CHAUNSAY BECKWITH, 46, of Tucker, Georgia, made an initial appearance before a federal magistrate January 8 on charges of health care fraud in connection with the operation of her clinic, “International Alternative Medicine, Incorporated.” She was indicted on 35 counts of health care fraud by a federal grand jury on December 16, 2008.

United States Attorney David E. Nahmias said of the case, “Many people are familiar with hyperbaric chambers as having a number of legitimate medical and practical uses, as varied as helping burn victims and even scuba divers in their recovery. This defendant allegedly turned a hyperbaric chamber into a means of generating over a million dollars in fraudulent claims. Health care fraud raises the costs of health care for everyone.”

According to Nahmias, the indictment, and information presented in court today: Between 2003 and 2007, CHAUNSAY BECKWITH, an owner/operator who does not hold any type of medical license, provided hyperbaric oxygen therapy to numerous patients in her clinic, International Alternative Medicine, Inc., located at 4450 Hugh Howell Road, in Tucker, Georgia. None of the patients were diagnosed with medical conditions that made them eligible to receive payments from health care benefit programs. The indictment further alleges that BECKWITH submitted $1,577,827 in claims to insurance companies and Medicare, which included false diagnosis codes that enabled her to fraudulently receive $1,035,144 in payments for the hyperbaric chamber treatments.

Members of the public are reminded that the indictment only contains charges. The defendant is presumed innocent of the charges and it will be the government's burden to prove the defendant's guilt beyond a reasonable doubt at trial.

This case is being investigated by Special Agents of the Federal Bureau of Investigation.

Assistant United States Attorney David E. McClernan is prosecuting the case.

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