Fraud News Around the Nation

October 24, 2016
Texas Health Clinic Owner Pleads Guilty to Insurance Fraud

The owner of a Houston, Texas, health clinic pled guilty to insurance fraud after billing for medical services – often provided to injured employees – despite having no licensed medical staff at the clinic. Instead, investigators found that the clinic was using foreign medical students to provide care.

Rosemary Phelan, the owner of Rose’s Houston Healthcare Clinic, entered a guilty plea in Harris County Court and was sentenced to seven years deferred adjudication and ordered to pay $88,000 in restitution.

A joint investigation by the Texas Department of Insurance Division of Workers’ Compensation and Texas Mutual Insurance Company revealed that Phelan’s clinic had no licensed medical providers on staff yet continued to accept patients. She would then file fraudulent workers’ compensation claims to collect from insurers.

According to investigators, the clinic had a licensed doctor on staff at one time. When that doctor left in 2012, Phelan began hiring foreign medical students to act as doctors and treat patients.

Workers’ Compensation Commissioner Ryan Brannan said this case was particularly egregious. “Someone filing false claims is bad enough,” he said. “But this scam put people’s health at risk. It’s unconscionable.”

Phelan submitted $166,843 in fraudulent workers’ compensation claims, representing more than 50 injured employees, claiming they had been treated by the clinic’s previous doctor.

Phelan pled guilty to second degree insurance fraud and a felony charge of practicing medicine without a license. The investigation found that her clinic was supplying narcotics to patients using the credentials of doctors and physician assistants who no longer worked at the clinic without their knowledge.

$5M Bond Revoked for Missouri Arson Suspect

A judge has revoked a $5 million cash bond paid by a central Missouri businessman accused of arson.

The Columbia Tribune reports that 62-year-old Mehrdad Fotoohighiam was charged with arson in 2015 after authorities accused him of paying another man $500 to set fire to a mobile home, injuring a woman.

A probable cause statement says the defendant wanted to buy the woman’s land to expand his Columbia area engineering company, and she refused to sell.

A judge Monday revoked Fotoohighiam’s $5 million bond, which he paid earlier. He’s now being held in Boone County. Prosecutors wanted the bond revoked because they were concerned he might flee the U.S.

His lawyer says Fotoohighiam is innocent and isn’t a flight risk. His next court date is Dec. 5.

Man Wanted for Fraud in Arizona Arrested in New Jersey

Authorities in New Jersey have arrested a man wanted on fraud and theft charges in Arizona.

Detectives found 43-year-old Brian McFarland living in Swedesboro.

McFarland is accused of bilking nearly 90 insurance customers of more than $450,000.

He waived extradition and agreed to return to Arizona.

It’s not known if he has a lawyer.

Former Iowa trooper accused of theft in workers’ comp case

A former Iowa state trooper has been charged with theft, accused by state authorities of improperly receiving workers’ compensation payments.

The Iowa Public Safety Department said Thursday that 38-year-old Lance Below turned himself in Wednesday to the Hardin County Sheriff’s Office. Court records don’t show the name of an attorney who could be contacted to comment for him. Below was released without bail.

The patrol says he left the department in September 2015.

Authorities say Below improperly receiving workers’ compensation for an ankle problem while working for the patrol and for another employer without notifying that employer or his workers’ compensation provider that he was being paid for the second job, which would have reduced his compensation.

Court records say Below, of Hubbard, was overpaid nearly $27,000.

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