Texarkana Area Podiatrists, Assistants Feel Pain of 134-Count Indictment

March 15, 2004

Texas Attorney General Greg Abbott’s Medicaid Fraud Control Unit
participated with federal authorities in the Texarkana-area recently to arrest six podiatrists and several of their associates, charging them with numerous felony offenses included in a previously sealed 134-count indictment. Eight arrests were made and others are expected.

The indictment, returned by a federal grand jury under seal on Feb. 19 and unsealed recently, names podiatrists James Naples, Frederick Day, Glenn Feeback, Philip Hahn, Gregg Petty and John White. Also charged are non-licensed associates Linda Velvin, Cynthia Capps and Shannon Richardson. All were associated with New Boston General Hospital Inc. in New Boston.

“With help from the Texas Legislature and federal authorities we will
continue to strengthen our mission of making sure the Medicaid system is not bilked out of taxpayer dollars at the expense of patients who need medical care,” said Attorney General Abbott. “This enforcement action is the culmination of a long investigation. I am proud of my investigators and their work to protect the Medicaid system for all Texans.”

The federal charges range from health care fraud, to conspiracy to operate a racketeer-influenced and corrupt organization, commonly known as RICO, to aiding and abetting, obstructing justice, destruction of records, bribery and perjury. The entire scheme, as described in the indictment, was devised to bill Medicare, Medicaid and Tricare for podiatry (foot treatments) not ordered or supervised by licensed podiatrists.

The podiatrists allegedly allowed members of the Podiatry Residency Program at the hospital to perform foot treatments on patients without supervision by the podiatrists themselves, which is prohibited. The podiatrists would then allegedly collect reimbursement from Medicaid for these services. Moreover, at the time these treatments were done by members of the residency program, the podiatrists were either out of town or out of the country.

Other allegations in the indictment describe illegal cancer treatments the podiatrists conducted, for which they billed Medicaid. The podiatrists allegedly used a chemical used in pesticides known as DNP (2,4-dinitrophenal) to treat the cancers, the use of which is prohibited by the U.S. Food and Drug Administration. The podiatrists billed the state insurers for reimbursement claiming that approved cancer treatments and chemotherapy drugs had been used.

A federal search warrant was executed in November 2001 at seven locations involved in this case. In that instance, officers seized thousands of documents for review in the investigation.

Abbott’s Medicaid Fraud Control Unit was a part of a team of investigators, that also included the FBI, the Office of Inspector General-U.S. Health and Human Services Commission, the FDA, the IRS and Department of Defense, Criminal Investigative Service.

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