Understanding Securities, Fraud Charges and Defense

Financial fraud is a serious crime. It assumes even greater proportions if it involves fraudulent practices in the stock markets. Any criminal charge is a serious matter – and you need to find legal counsel for active defense immediately. However, before you talk to a lawyer, here is a quick look at the details regarding securities fraud.

What constitutes securities fraud? Use of any deceptive means in buying, selling or trading in securities is within this category of white-collar crimes. It may be falsifying a record or securities trading on it based on insider information – if the intention is to defraud, it is a crime.

Which actions may be termed as this? Here are the broad categories.

Falsification of information regarding a company, or its securities, to investors, with the intention to defraud them

Manipulation of accounting records regarding a company, its assets and liabilities, with the intention to defraud investors

Insider trading, i.e. buying, selling or trading in securities based on nonpublic information

What are the laws in this regard? State laws in this regard varies; however, the prominent federal laws in this regard are –

• The Securities Act of 1933 – directives regarding the issuance of company securities
• The Securities Exchange Act of 1934 – directives regarding the monitoring of the industry by the Securities and Exchange Commission (SEC)
• The Sarbanes-Oxley Act (SOX) of 2002 – directives regarding the enhanced standards of buying, selling or trading in public companies’ securities

Who enforces these laws? Primarily, it is the task of the SEC to monitor the industry and enforce the laws in case of any violation. Legal actions may initiate from a government agency or a private investor. The SEC conducts the investigation and prepares the case.

In most cases, when you face such a criminal charge, the SEC has completed its investigation and prepared prosecution. You need to get a criminal lawyer immediately to avoid losing any more time.

What penalties does a conviction imply? Conviction of such a crime means serious penalties. The SEC and the National Association of Securities Dealers (NASD) imposes hefty fines for such crimes. If it is grouped as felony, you may face also face imprisonment for a period of up to 20 years.

Apart from the penalties you may face, there is also the criminal record, which seriously jeopardizes your chances of getting a finance related job. Only a qualified and experienced lawyer has the necessary knowledge and expertise to investigate the matter, accumulate the evidence, analyze the facts, and prepare for defense.

Your Credit Report – Who Uses it and What Do They Look For?

Access to your Credit Report is limited. A consumer reporting agency may provide information about you only to people with a valid need as determined by the FCRA, usually to consider an application with a creditor, insurer, employer, landlord or other business. Your score is a quick snapshot that may be used when credit decisions are made. Creditors may also obtain your full credit report to access more detailed information to aid their decision on your level of risk.

1. Housing

A. Rental – Landlords access your credit report and look particularly for the following:

1. Collections

2. Old unpaid bills that are unresolved and carry a long time rating of 5-9

3. Evictions or you owe any Property Management money

4. Bankruptcy in the last 3 years – It is OK as long as it is declared. If not declared on the rental

application it is denied for falsifying the application.

5. Credit Score is not important, but they have a credit default level they use

B. Buying a house

C. Mortgage

D. Refinance

2. Automobile

A. Purchase – Your credit score will determine your interest rate

B. Lease – Your credit score will determine eligibility for a lease program

3. Employment

A. Can you be bonded?

B. Prospective employers use your credit rating to gauge your sense of responsibility

C. Do you owe a landlord money at prior residence

D. Eviction

E. Conviction of misdemeanor or felony

F. Credit

4. Insurance – May effect your policy available and/or your premiums

A. Auto

B. Home

C. Renters

5. Interest Rates increase with the lower scores

A. Loans

B. Mortgage/Refinance

C. Credit Lines/ Credit Cards

D. Banks – Credit Extension, Review, or Collection

6. Credit Card Approval

A. Existing Credit Cards – Cards in good standing can adjust their interest rate based upon other agency bad reports.

B. Application for new credit card

C. Apartment Store Credit card

7. Other Financed Purchases-approval and interest rate

A. Store Purchases on credit

B. Cell Phone contracts

C. Recreational Membership Contracts

GET YOUR CREDIT REPORT AND CHECK IT TODAY! SEE WHO IS LOOKING! Make corrections to all inaccurate data. Be sure you like what they see.

Joining the Military With a Felony or Misdemeanor

Joining the military is an involved process regardless of your background. Stacks and stacks of paperwork are necessary just to get you in the door, much less qualified for a security clearance. Most people with a substantial criminal history find themselves dealing with a bit more paperwork than those without a record, but many are able to join in spite of it.

The question, “can I get into without a spotless legal history?” is straightforward enough, but the answer is a bit more involved. To put it simply, it goes something like “it depends.” The military expends plenty of time trying to filter through its possible candidates, in the interest of keeping a distinct standard of morality and character. Does that necessarily suggest that an individual with a record can’t get join? Definitely not. It just means that your success in starting your time in service mostly depends on the nature and variety of those charges, court action taken, and possibly a waiver to get you in the door. On the flip side, it almost goes without saying that a large number of repeated offenses, and certain crimes will just invalidate you from getting into the Armed Forces almost instantly.

With regard to security clearances, however, the stakes are inclined to increase somewhat. The U.S. goes to great measures to make sure that its interests and pursuits are safeguarded and seen by people not only with clean histories, but also clean credit scores. The rationale here is also pretty simple. Envision being in debt, but also having access to extremely sensitive data. Then sometime down the line, you’re contacted by an individual who might be proposing you money in exchange for specifications, data, and information you’re accustomed to seeing all day everyday, causing you lose sight of its significance. Between being hard pressed for money, given your finances and a degraded perception of the information you have access to, it can easily be a recipe for disaster.

Credit rating aside, felonies and misdemeanors are quite a concern when it comes to landing a military occupation with a security clearance. Unfortunately, there are no hard and fast rules stating which set of conditions let you to get this job or that. It’s often treated on a case by case basis.

The best course of action is to simply discuss your concerns with your recruiter. All the things outlined regarding your previous experiences is privileged information and will be kept between you and the guys trying to get you signed up. Of course, certain thing such as thinking about committing suicide, confessing to any type of child abuse are issues that recruiters are obligated to report. Otherwise, details exchanged will be maintained in strict confidence. Talking about past offenses candidly moves the process along a great deal more smoothly. It’s substantially better that past crimes are talked about in a pre-entrance environment than a Federal background check, which is bound to happen sooner than later. In addition to a pre-screening with a recruiter, you’ll also undergo an evaluation at the Military Entrance and Processing Station (MEPS).

Hospice Fraud – A Review For Employees, Whistleblowers, Attorneys, Lawyers and Law Firms

Hospice fraud in South Carolina and the United States is an increasing problem as the number of hospice patients has exploded over the past few years. From 2004 to 2008, the number of patients receiving hospice care in the United States grew almost 40% to nearly 1.5 million, and of the 2.5 million people who died in 2008, nearly one million were hospice patients. The overwhelming majority of people receiving hospice care receive federal benefits from the federal government through the Medicare or Medicaid programs. The health care providers who provide hospice services traditionally enroll in the Medicare and Medicaid programs in order to qualify to receive payments under these government programs for services rendered to Medicare and Medicaid eligible patients.

While most hospice health care organizations provide appropriate and ethical treatment for their hospice patients, because hospice eligibility under Medicare and Medicaid involves clinical judgments which may result in the payments of large sums of money from the federal government, there are tremendous opportunities for fraudulent practices and false billing claims by unscrupulous hospice care providers. As recent federal hospice fraud enforcement actions have demonstrated, the number of health care companies and individuals who are willing to try to defraud the Medicare and Medicaid hospice benefits programs is on the rise.

A recent example of hospice fraud involving a South Carolina hospice is Southern Care, Inc., a hospice company that in 2009 paid $24.7 million to settle an FCA case. The defendant operated hospices in 14 other states, too, including Alabama, Georgia, Indiana, Iowa, Kansas, Louisiana, Michigan, Mississippi, Missouri, Ohio, Pennsylvania, Texas, Virginia and Wisconsin. The alleged frauds were that patients were not eligible for hospice, to wit, were not terminally ill, lack of documentation of terminal illnesses, and that the company marketed to potential patients with the promise of free medications, supplies, and the provision of home health aides. Southern Care also entered into a 5-year Corporate Integrity Agreement with the OIG as part of the settlement. The qui tam relators received almost $5 million.

Understanding the Consequences of Hospice Fraud and Whistleblower Actions

U.S. and South Carolina consumers, including hospice patients and their family members, and health care employees who are employed in the hospice industry, as well as their SC lawyers and attorneys, should familiarize themselves with the basics of the hospice care industry, hospice eligibility under the Medicare and Medicaid programs, and hospice fraud schemes that have developed across the country. Consumers need to protect themselves from unethical hospice providers, and hospice employees need to guard against knowingly or unwittingly participating in health care fraud against the federal government because they may subject themselves to administrative sanctions, including lengthy exclusions from working in an organization which receives federal funds, enormous civil monetary penalties and fines, and criminal sanctions, including incarceration. When a hospice employee discovers fraudulent conduct involving Medicare or Medicaid billings or claims, the employee should not participate in such behavior, and it is imperative that the unlawful conduct be reported to law enforcement and/or regulatory authorities. Not only does reporting such fraudulent Medicare or Medicaid practices shield the hospice employee from exposure to the foregoing administrative, civil and criminal sanctions, but hospice fraud whistleblowers may benefit financially under the reward provisions of the federal False Claims Act, 31 U.S.C. §§ 3729-3732, by bringing false claims suits, also known as qui tam or whistleblower suits, against their employers on behalf of the United States.

Types of Hospice Care Services

Hospice care is a type of health care service for patients who are terminally ill. Hospices also provide support services for the families of terminally ill patients. This care includes physical care and counseling. Hospice care is normally provided by a public agency or private company approved by Medicare and Medicaid. Hospice care is available for all age groups, including children, adults, and the elderly who are in the final stages of life. The purpose of hospice is to provide care for the terminally ill patient and his or her family and not to cure the terminal illness.

If a patient qualifies for hospice care, the patient can receive medical and support services, including nursing care, medical social services, doctor services, counseling, homemaker services, and other types of services. The hospice patient will have a team of doctors, nurses, home health aides, social workers, counselors and trained volunteers to help the patient and his or her family members cope with the symptoms and consequences of the terminal illness. While many hospice patients and their families can receive hospice care in the comfort of their home, if the hospice patient’s condition deteriorates, the patient can be transferred to a hospice facility, hospital, or nursing home to receive hospice care.

Hospice Care Statistics

The number of days that a patient receives hospice care is often referenced as the “length of stay” or “length of service.” The length of service is dependent on a number of different factors, including but not limited to, the type and stage of the disease, the quality of and access to health care providers before the hospice referral, and the timing of the hospice referral. In 2008, the median length of stay for hospice patients was about 21 days, the average length of stay was about 69 days, almost 35% of hospice patients died or were discharged within 7 days of the hospice referral, and only about 12% of hospice patients survived longer than 180 days.

Most hospice care patients receive hospice care in private homes (40%). Other locations where hospice services are provided are nursing homes (22%), residential facilities (6%), hospice inpatient facilities (21%), and acute care hospitals (10%). Hospice patients are generally the elderly, and hospice age group percentages are 34 years or less (1%), 35 – 64 years (16%), 65 – 74 years (16%), 75 – 84 years (29%), and over 85 years (38%). As for the terminal illness resulting in a hospice referral, cancer is the diagnosis for almost 40% of hospice patients, followed by debility unspecified (15%), heart disease (12%), dementia (11%), lung disease (8%), stroke (4%) and kidney disease (3%). Medicare pays the great majority of hospice care expenses (84%), followed by private insurance (8%), Medicaid (5%), charity care (1%) and self pay (1%).

As of 2008, there were approximately 4,700 locations which were providing hospice care in the United States, which represented about a 50% increase over ten years. There were about 3,700 companies and organizations which were providing hospice services in the United States. About half of the hospice care providers in the United States are for-profit organizations, and about half are non-profit organizations.
General Overview of the Medicare and Medicaid Programs

In 1965, Congress established the Medicare Program to provide health insurance for the elderly and disabled. Payments from the Medicare Program arise from the Medicare Trust fund, which is funded by government contributions and through payroll deductions from American workers. The Centers for Medicare and Medicaid Services (CMS), previously known as the Health Care Financing Administration (HCFA), is the federal agency within the United States Department of Health and Human Services (HHS) that administers the Medicare program and works in partnership with state governments to administer Medicaid.

In 2007, CMS reorganized its ten geography-based field offices to a Consortia structure based on the agency’s key lines of business: Medicare health plans, Medicare financial management, Medicare fee for service operations, Medicaid and children’s health, survey & certification and quality improvement. The CMS consortia consist of the following:

• Consortium for Medicare Health Plans Operations
• Consortium for Financial Management and Fee for Service Operations
• Consortium for Medicaid and Children’s Health Operations
• Consortium for Quality Improvement and Survey & Certification Operations

Each consortium is led by a Consortium Administrator (CA) who serves as the CMS’s national focal point in the field for their business line. Each CA is responsible for consistent implementation of CMS programs, policy and guidance across all ten regions for matters pertaining to their business line. In addition to responsibility for a business line, each CA also serves as the Agency’s senior management official for two or three Regional Offices (ROs), representing the CMS Administrator in external matters and overseeing administrative operations.

Much of the daily administration and operation of the Medicare Program is managed through private insurance companies that contract with the Government. These private insurance companies, sometimes called “Medicare Carriers” or “Fiscal Intermediaries,” are charged with and responsible for accepting Medicare claims, determining coverage, and making payments from the Medicare Trust Fund. These carriers, including Palmetto Government Benefits Administrators (hereinafter “PGBA”), a division of Blue Cross and Blue Shield of South Carolina, operate pursuant to 42 U.S.C. §§ 1395h and 1395u and rely on the good faith and truthful representations of health care providers when processing claims.

Over the past forty years, the Medicare Program has enabled the elderly and disabled to obtain necessary medical services from medical providers throughout the United States. Critical to the success of the Medicare Program is the fundamental concept that health care providers accurately and honestly submit claims and bills to the Medicare Trust Fund only for those medical treatments or services that are legitimate, reasonable and medically necessary, in full compliance with all laws, regulations, rules, and conditions of participation, and, further, that medical providers not take advantage of their elderly and disabled patients.

The Medicaid Program is available only to certain low-income individuals and families who must meet eligibility requirements set forth by federal and state law. Each state sets its own guidelines regarding eligibility and services. Although administered by individual states, the Medicaid Program is funded primarily by the federal government. Medicaid does not pay money to patients; rather, it sends payments directly to the patient’s health care providers. Like Medicare, the Medicaid Program depends on health care providers to accurately and honestly submit claims and bills to program administrators only for those medical treatments or services that are legitimate, reasonable and medically necessary, in full compliance with all laws, regulations, rules, and conditions of participation, and, further, that medical providers not take advantage of their indigent patients.

Medicare & Medicaid Hospice Laws Which Affect SC Hospices

Hospice fraud occurs when hospice organizations, by and through their employees, agents and owners, knowingly violate the terms and conditions of the applicable Medicare and Medicaid hospice statutes, regulations, rules and conditions of participation. In order to be able to recognize hospice fraud, hospices, hospice patients, hospice employees and their attorneys and lawyers must know the Medicare laws and requirements relating to hospice care benefits.

Medicare’s two main sources of authorization for hospice benefits are found in the Social Security Act and the U.S. Code of Federal Regulations. The statutory provisions are primarily found at 42 U.S.C. §§ 1395d, 1395e, 1395f(a)(7), 1395x(d)(d), and 1395y, and the regulatory provisions are found at 42 C.F.R. Part 418.

To be eligible for Medicare benefits for hospice care, the patient must be eligible for Medicare Part A and be terminally ill. 42 C.F.R. § 418.20. Terminal illness is established when “the individual has a medical prognosis that his or her life expectancy is 6 months or less if the illness runs its normal course.” 42 C.F.R. § 418.3; 42 U.S.C. § 1395x(d)(d)(3). The patient’s physician and the medical director of the hospice must certify in writing that the patient is “terminally ill.” 42 U.S.C. § 1395f(a)(7); 42 C.F.R. § 418.20. After a patient’s initial certification, Medicare provides for two ninety-day benefit periods followed by an unlimited number of sixty-day benefit periods. 42 U.S.C. § 1395d(a)(4). At the end of each ninety- or sixty-day period, the patient can be re-certified only if at that time he or she has less than six months to live if the illness runs its normal course. 42 U.S.C. § 1395f(a)(7)(A). The written certification and re-certifications must be maintained in the patient’s medical records. 42 C.F.R. § 418.23. A written plan of care must be established for each patient setting forth the types of hospice care services the patient is scheduled to receive, 42 U.S.C. § 1395f(a)(7)(B), and the hospice care has to be provided in accordance with such plan of care. 42 U.S.C. § 1395f(a)(7)(C); 42 C.F.R. § 418.56. Clinical records for each hospice patient must be maintained by the hospice, including plan of care, assessments, clinical notes, signed notice of election, patient responses to medication and therapy, physician certifications and re-certifications, outcome data, advance directives and physician orders. 42 C.F.R. § 418.104.

The hospice must obtain a written notice of election from the patient to elect to receive Medicare hospice benefits. 42 C.F.R. § 418.24. Importantly, once a patient has elected to receive hospice care benefits, the patient waives Medicare benefits for curative treatment for the terminal disease upon which is the admitting diagnosis. 42 C.F.R. § 418.24(d).

The hospice must designate an Interdisciplinary Group (IDG) or groups composed of individuals who work together to meet the physical, medical, psychosocial, emotional, and spiritual needs of the hospice patients and families facing terminal illness and bereavement. 42 C.F.R. § 418.56. The IDG members must provide the care and services offered by the hospice, and the group, in its entirety, must supervise the care and services. A registered nurse that is a member of the IDG must be designated to provide coordination of care and to ensure continuous assessment of each patient’s and family’s needs and implementation of the interdisciplinary plan of care. The interdisciplinary group must include, but is not limited to, the following qualified and competent professionals: (i) A doctor of medicine or osteopathy (who is an employee or under contract with the hospice); (ii) A registered nurse; (iii) A social worker; and, (iv) A pastoral or other counselor. 42 C.F.R. § 418.56.

The Medicare hospice regulations, at 42 C.F.R. § 418.200, summarize the requirements for hospice coverage in pertinent part as follows:

To be covered, hospice services must meet the following requirements. They must be reasonable and necessary for the palliation and management of the terminal illness as well as related conditions. The individual must elect hospice care in accordance with §418.24. A plan of care must be established and periodically reviewed by the attending physician, the medical director, and the interdisciplinary group of the hospice program as set forth in §418.56. That plan of care must be established before hospice care is provided. The services provided must be consistent with the plan of care. A certification that the individual is terminally ill must be completed as set forth in section §418.22.

The Social Security Act, at 42 U.S.C. § 1395y(a), limits Medicare hospice benefits, providing in pertinent part as follows: “Notwithstanding any other provision of this title, no payment may be made under part A or part B for any expenses incurred for items or services-… (C) in the case of hospice care, which are not reasonable and necessary for the palliation or management of terminal illness….” 42 C.F.R. § 418.50 (hospice care must be “reasonable and necessary for the palliation and management of terminal illness”). Palliative care is defined in the regulations as “patient and family-centered care that optimizes quality of life by anticipating, preventing, and treating suffering. Palliative care throughout the continuum of illness involves addressing physical, intellectual, emotional, social, and spiritual needs and to facilitate patient autonomy, access to information, and choice.” 42 C.F.R. § 418.3.

Medicare pays hospice agencies a daily rate for each day a beneficiary is enrolled in the hospice benefit and receives hospice care. The daily payments are made regardless of the amount of services furnished on a given day and are intended to cover costs that the hospice incurs in furnishing services identified in the patient’s plan of care. There are four levels of payments which are made based on the amount of care required to meet beneficiary and family needs. 42 C.F.R. § 418.302; CMS Hospice Fact Sheet, November 2009. These four levels, and the corresponding 2010 daily rates, are as follows: routine home care ($142.91); continuous home care ($834.10); inpatient respite care ($147.83); and, general inpatient care ($635.74).

The aggregate annual cap per patient in 2009 was $23,014.50. This cap is determined by adjusting the original hospice patient cap of $6,500, set in 1984, by the Consumer Price Index. See CMS Internet-Only Manual 100-04, chapter 11, section 80.2; 42 U.S.C. § 1395f(i); 42 C.F.R. § 418.309. The Medicare Claims Processing Manual, at Chapter 11 – Processing Hospice Claims, in Section 80.2, entitled “Cap on Overall Hospice Reimbursement,” provides in pertinent part as follows: “Any payments in excess of the cap must be refunded by the hospice.”

Hospice patients are responsible for Medicare co-insurance payments for drugs and respite care, and the hospice may charge the patient for these co-insurance payments. However, the co-insurance payments for drugs are limited to the lesser of $5 or 5% of the cost of the drugs to the hospice, and the co-insurance payments for respite care are generally 5% of the payment made by Medicare for such services. 42 C.F.R. § 418.400.

The Medicare and Medicaid programs require institutional health care providers, including hospice organizations, to file an enrollment application in order to qualify to receive the programs’ benefits. As part of these enrollment applications, the hospice providers certify that they will comply with Medicare and Medicaid laws, regulations, and program instructions, and further certify that they understand that payment of a claim by Medicare and Medicaid is conditioned upon the claim and underlying transaction complying with such program laws and requirements. The Medicare Enrollment Application which hospice providers must execute, Form CMS-855A, states in part as follows: “I agree to abide by the Medicare laws, regulations and program instructions that apply to this provider. The Medicare laws, regulations, and program instructions are available through the Medicare contractor. I understand that payment of a claim by Medicare is conditioned upon the claim and the underlying transaction complying with such laws, regulations, and program instructions (including, but not limited to, the Federal AKS and Stark laws), and on the provider’s compliance with all applicable conditions of participation in Medicare.”

Hospices are generally required to bill Medicare on a monthly basis. See the Medicare Claims Processing Manual, at Chapter 11 – Processing Hospice Claims, in Section 90 – Frequency of Billing. Hospices generally file their hospice Medicare claims with their Fiscal Intermediary or Medicare Carrier pursuant to the CMS Claims Manual Form CMS 1450 (sometime also called a Form UB-04 or Form UB-92), either in paper or electronic form. These claim forms contain representations and certifications which state in pertinent part that: (1) misrepresentations or falsifications of essential information may serve as the basis for civil monetary penalties and criminal convictions; (2) submission of the claim constitutes certification that the billing information is true, accurate and complete; (3) the submitter did not knowingly or recklessly disregard or misrepresent or conceal material facts; (4) all required physician certifications and re-certifications are on file; (5) all required patient signatures are on file; and, (6) for Medicaid purposes, the submitter understands that because payment and satisfaction of this claim will be from Federal and State funds, any false statements, documents, or concealment of a material fact are subject to prosecution under applicable Federal or State Laws.

Hospices must also file with CMS an annual cost and data report of Medicare payments received. 42 U.S.C. § 1395f(i)(3); 42 U.S.C. § 1395x(d)(d)(4). The annual hospice cost and data reports, Form CMS 1984-99, contain representations and certifications which state in pertinent part that: (1) misrepresentations or falsifications of information contained in the cost report may be punishable by criminal, civil and administrative actions, including fines and/or imprisonment; (2) if any services identified in the report were the product of a direct or indirect kickback or were otherwise illegal, then criminal, civil and administrative actions may result, including fines and/or imprisonment; (3) the report is a true, correct and complete statement prepared from the books and records of the provider in accordance with applicable instructions, except as noted; and, (4) the signing officer is familiar with the laws and regulations regarding the provision of health care services and that the services identified in this cost report were provided in compliance with such laws and regulations.

Hospice Anti-Fraud Enforcement Statutes

There are a number of federal criminal, civil and administrative enforcement provisions set forth in the Medicare statutes which are aimed at preventing fraudulent conduct, including hospice fraud, and which help maintain program integrity and compliance. Some of the more prominent enforcement provisions of the Medicare statutes include the following: 42 U.S.C. § 1320a-7b (Criminal fraud and anti-kickback penalties); 42 U.S.C. § 1320a-7a and 42 U.S.C. § 1320a-8 (Civil monetary penalties for fraud); 42 U.S.C. § 1320a-7 (Administrative exclusions from participation in Medicare/Medicaid programs for fraud); 42 U.S.C. § 1320a-4 (Administrative subpoena power for the Comptroller General).

Other criminal enforcement provisions which are used to combat Medicare and Medicaid fraud, including hospice fraud, include the following: 18 U.S.C. § 1347 (General health care fraud criminal statute); 21 U.S.C. §§ 353, 333 (Prescription Drug Marketing Act); 18 U.S.C. § 669 (Theft or Embezzlement in Connection with Health Care); 18 U.S.C. § 1035 (False statements relating to Health Care); 18 U.S.C. § 2 (Aiding and Abetting); 18 U.S.C. § 3 (Accessory after the Fact); 18 U.S.C. § 4 (Misprision of a Felony); 18 U.S.C. § 286 (Conspiracy to defraud the Government with respect to Claims); 18 U.S.C. § 287 (False, Fictitious or Fraudulent Claims); 18 U.S.C. § 371 (Criminal Conspiracy); 18 U.S.C. § 1001 (False Statements); 18 U.S.C. § 1341 (Mail Fraud); 18 U.S.C. § 1343 (Wire Fraud); 18 U.S.C. § 1956 (Money Laundering); 18 U.S.C. § 1957 (Money Laundering); and, 18 U.S.C. § 1964 (Racketeer Influenced and Corrupt Organizations (“RICO”)).

The False Claims Act (FCA)

Hospice fraud whistleblowers may benefit financially under the reward provisions of the federal False Claims Act, 31 U.S.C. §§ 3729-3732, by bringing false claims suits, also known as qui tam or whistleblower suits, against their employers on behalf of the United States. The plaintiff in a hospice fraud whistleblower suit is also known as a relator. The most common FCA provisions upon which hospice fraud qui tam or whistleblower relators rely are found in 31 U.S.C. § 3729: (A) knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval; (B) knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim; (C) conspires to commit a violation of subparagraph (A), (B), (D), (E), (F), or (G);…, and, (G) knowingly makes, uses, or causes to be made or used, a false record or statement material to an obligation to pay or transmit money or property to the Government, or knowingly conceals or knowingly and improperly avoids or decreases an obligation to pay or transmit money or property to the Government…. There is no requirement to prove specific intent to defraud. Rather, it is only necessary to prove actual knowledge of the false claims, false statements, or false records, or the defendant’s deliberate indifference or reckless disregard of the truth or falsity of the information. 31 U.S.C. § 3729(b).

The FCA anti-retaliation provision protects the hospice whistleblower from retaliation from the hospice when the employee (or a contractor) “is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment” for taking action to try to stop the fraudulent activity. 31 U.S.C. § 3730(h). A hospice employee’s relief includes reinstatement, 2 times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination or retaliation, including litigation costs and reasonable attorneys’ fees.

A SC hospice fraud FCA whistleblower would initially file a disclosure statement, complaint and supporting documents with the U.S. Attorney’s Office in Columbia, South Carolina, and the US Attorney General. After the disclosures are filed, a federal court complaint can be filed. The SC division where the frauds occurred, the relator’s residence, and the defendant residence, will determine which division the case will be assigned. There are eleven federal court divisions in South Carolina. Once the case has been filed, the government has 60 days to decide whether or not to intervene. During this time, federal government investigators located in South Carolina will investigate the claims. If the case involved Medicaid, SC Medicaid fraud unit investigators will likely become involved as well. If the government intervenes in the case, the U.S. Attorney for South Carolina is usually the lead attorney. If the government does not intervene, the relator’s SC attorney will prosecute the case. In South Carolina, expect a qui tam case to take one to two years to get to trial.

Tips on Recognizing Hospice Fraud Schemes

The HHS Office of Inspector General (OIG) has issued Special Fraud Alerts for fraudulent and abusive practices of hospices. U.S. and South Carolina hospices, patients, hospice employees and whistleblowers, their attorneys and lawyers, should be familiar with these hospice fraud practices. Tips on recognizing hospice frauds in South Carolina and the U.S. are:

• A hospice offering free goods or goods at below market value to induce a nursing home to refer patients to the hospice.
• False representations in a hospice’s Medicare/Medicaid enrollment form.
• A hospice paying “room and board” payments to the nursing home in amounts in excess of what the nursing home would have received directly from Medicaid had the patient not been enrolled in the hospice.
• False statements in a hospice’s claim form (CMS Forms 1450, UB-04 or UB-92).
• A hospice falsely billing for services that were not reasonable or necessary for the palliation of the symptoms of a terminally ill patient.
• A hospice paying amounts to the nursing home for “additional” services that Medicaid considered included in its room and board payment to the hospice.
• A hospice paying above fair market value for “additional” non-core services which Medicaid does not consider to be included in its room and board payments to the nursing home.
• A hospice referring patients to a nursing home to induce the nursing home to refer its patients to the hospice.
•A hospice providing free (or below fair market value) care to nursing home patients, for whom the nursing home is receiving Medicare payment under the skilled nursing facility benefit, with the expectation that after the patient exhausts the skilled nursing facility benefit, the patient will receive hospice services from that hospice.
• A hospice providing staff at its expense to the nursing home to perform duties that otherwise would be performed by the nursing home.
• Incomplete or no written Plan of Care was established or reviewed at specific intervals.
• Plan of Care did not include an assessment of needs.
• Fraudulent statements in a hospice’s cost report to the government.
• Notice of Election was not obtained or was fraudulently obtained.
• RN supervisory visits were not made for home health aide services.
• Certification or Re-certification of terminal illness was not obtained or was fraudulently obtained.
• No Plan of care was included for bereavement services.
• Fraudulent billing for upcoded levels of hospice care.
• Hospice did not conduct a self-assessment of quality and care provided.
• Clinical records were not maintained for every patient.
• Interdisciplinary group did not review and update the plan of care for each patient.

Recent Hospice Fraud Enforcement Cases

The DOJ and U.S. Attorney’s Offices have been active in enforcing hospice fraud cases.

In 2009, Kaiser Foundation Hospitals settled an FCA lawsuit by paying $1.8 million to the federal government. The defendant allegedly failed to obtain written certifications of terminal illness for a number of its patients.

In 2006, Odyssey Healthcare, a national hospice provider, paid $12.9 million to settle a qui tam suit for false claims under the FCA. The hospice fraud allegations were generally that Odyssey billed Medicare for providing hospice care to patients when they were not terminally ill and ineligible for Medicare hospice benefits. A Corporate Integrity Agreement was also a part of the settlement. The hospice fraud qui tam relator received $2.3 million for blowing the whistle on the defendant.

In 2005, Faith Hospice, Inc., settled claims an FCA claim for $600,000. The hospice fraud allegations were generally that Faith Hospice billed Medicare for providing hospice care to patients more than half of whom were not terminally ill.

In 2005, Home Hospice of North Texas settled an FCA claim for $500,000 regarding allegations of fraudulently billing Medicare for ineligible hospice patients.

In 2000, Michigan osteopath Donald Dreyfuss, who pleaded guilty to criminal fraud charges, including violation of the AKS for receiving illegal kickbacks from a hospice for recommending the hospice to the staff of his nursing home, settled an FCA suit for $2 million.


Hospice fraud is a growing problem in South Carolina and throughout the United States. South Carolina hospice patients, hospice employees, and their SC lawyers and attorneys, should be familiar with the basics of the hospice care industry, hospice eligibility under the Medicare and Medicaid programs, and typical hospice fraud schemes. Hospice organizations should take steps to ensure full compliance with Medicare/Medicaid hospice billing requirements to avoid hospice fraud allegations and FCA litigation.

Felonies and Bankruptcy

In our legal system, if you have been convicted of a felony, life can become more challenging because certain rights have been taken away from you. If you are facing financial difficulties, there are still legal options available to help you get out of debt and even if you have felonies on your record, you may still be able to secure the protection of bankruptcy as you get your finances back under your control.

Anyone can slip into debt, no matter their background or individual circumstances, and should have the same resources available to help them that everyone else is entitled to.

How Felonies Could Affect Bankruptcy Proceedings

When you file for bankruptcy, certain types of felonies could affect your eligibility for bankruptcy. Bankruptcy courts may appear hesitant to help you out because they may judge you based on your past record.

This is why it is extremely important to hire a skilled legal professional to represent you and defend your rights in court. An experienced attorney can help to show the courts that you are actually in need of financial protection under bankruptcy at this time in your life. You deserve to have your rights defended and be treated fairly by the legal system. The sooner you get help, the sooner you will be back on the road to recovery and financial stability. You deserve to be given a chance to put your life in order and reach your financial goals, no matter what your past may have held.

What’s the Difference Between Lehman Bros and Bear Stearns? Lehman’s CEO is on NY Fed Board

An earlier article by this author (“The Secret Bailout of JP Morgan”) summarized evidence presented by John Olagues, an expert in options trading, suggesting that JPMorgan, far from “rescuing” Bear Stearns, was actually its nemesis.[1] The faltering investment bank was brought down, not by “rumors,” but by insider trading based on a plan drawn up much earlier. The deal was a lucrative one for JPM, handing the Wall Street megabank $52 billion in loans from the Federal Reserve (meaning ultimately the U.S. taxpayer). So how did JPM get away with it? Olagues notes the highly suspicious fact that JPM’s CEO James Dimon sits on the Board of the New York Federal Reserve.

In his latest post, Olagues discusses the fate of Lehman Brothers, the nation’s fourth-largest investment bank and the next faltering bank expected to fail.[2] Unlike Bear Stearns, which got decimated by the JPM buyout using Federal Reserve money, Lehman Brothers is probably in line for a massive bailout from the Fed. At least, that’s what its CEO Richard Fuld seems to believe. The June 4, 2008 Financial Times of London quoted him as stating, “The Federal Reserve’s decision earlier this year to lend directly to investment banks should take questions about Lehman’s liquidity off the table.” Whether Lehman can come up with the “liquidity” to meet its debts is no longer an issue, because it expects to be feeding at the trough of the Federal Reserve, just as JPM did when it bought Bear Stearns at bargain-basement prices. The difference between the two “bailouts” is that Lehman Brothers, unlike Bear Stearns, will actually get the money. Why is Fuld so confident of this rescue operation? Olagues notes that Fuld, like Dimon (and unlike Bear CEO Alan Schwartz), sits on the Board of the New York Federal Reserve.

A conflict of interest? It certainly looks like it. Indeed, Olagues points to a statute defining this sort of self-dealing as a criminal offense. 18 U.S.C. Chapter 11, Section 208, makes it a felony punishable by up to 5 five years in prison for members of the Board of Directors of a Federal Reserve Bank to make decisions that benefit their own financial interests. That would undoubtedly apply here:

“Fuld, at last count, owns 1.9 million shares of Lehman . . . . Although Mr. Fuld sold over $320,000,000 worth of stock at near all time highs in 2006 and 2007, received through the premature exercise of his stock options, he still has value in his present holdings of approximately $100,000,000.”

Likewise, says Olagues, “James Dimon holds almost 3 million shares of J.P. Morgan stock worth over $120 million with taxes already paid and executive stock options equal in my estimate of another $70 million. His dispositions of stock equaled $140 million over the past few years.” Olagues adds:

“Fuld, like Jamie Dimon, was at the luncheon on March 11, 2008 with Bernanke, Rubin, CEO of Citigroup, Geithner, President of the New York FED, Thain of Merrill Lynch, and Schwarzman. Some claim that the meeting was about Bear Stearns and how to handle the situation.”

Needless to say, Bear CEO Schwartz was not invited to the luncheon. “Lehman Bros. is one of the original stock holders of the New York Federal Reserve Bank,” Olagues observes. “Bear Stears does not now have any ownership in the FED banks.”

The luncheon was held three days before the March 14 collapse of Bear Stearns stock that led to the bank’s demise. If the luncheon attendees were indeed discussing the Bear problem on March 11, testimony before the Senate Banking Committee in which the principals said they first heard of the problem on the evening of the thirteenth, says Olagues, was “less than truthful.”

The evidence at least warrants an investigation, but who is going to hold these self-dealing Federal Reserve Board members to account? New York Governor Eliot Spitzer, the former thorn in the side of the Wall Street bankers, has been summarily disposed of; and under the latest proposal of U.S. Treasury Secretary Hank Paulson, the Federal Reserve itself will soon become the chief overseer and regulator of the banks. The Federal Reserve will regulate the Federal Reserve Boards, with their litany of private bank CEOs, a clear case of the fox guarding the henhouse.

Can Realtors Really Help Investors Find Buyers and Sellers?

Obviously realtors find buyers and sellers all the time, after all, that’s the only way they make a living. But, can they help real estate investors who have a different mind-set about buying and selling? Surprisingly, the answer is not a simple “Yes” because a better answer is actually “Possibly”.

Let’s first look at the differences between real estate investors and realtors – state licensed professionals who are required to uphold high standards of ethics but don’t always, take continuing education courses, either are or should be trained in selling, spend money to advertise, and maintain an office; but in the final analysis have no direct money invested in the properties they sell. They are most benefited by getting the highest possible price for a property for which they receive a larger commission. They make a modest living in most cases if the market helps them.

Investors, on the other hand, have some similarities but not many. Investors only need a driver’s license to do business, should uphold high standards of ethics but don’t always, take continuing educational courses because they want to, generally are not trained in selling since they are buyers, have overhead and expenses, but do not have to maintain an office, and in the final analysis they take the risk and burden of owning a property to make a profit. Investors must pay the lowest possible price for a property to make a profit, they are not guaranteed a commission as a realtor gets for a sale. The only guarantee for an investor is a learning experience – good, bad or ugly. Investors can make great livings even in the worst of market conditions.

Having set the stage for the differences between investors and realtors, let’s look at specific examples of properties where investors are generally involved:

1. Bank-owned properties (REOs) – the banks want a realtor to list these properties and take care of the resulting investor inquiries and offers. Agents have a field day with new listings as investors who are rehabbers or newbies swarm to get these deals and bid against themselves in a crazed frenzy. WARNING- if you use a buyer’s agent to make offers on REOs it is very unlikely you will get the deals. Simply put, the listing agent will not split the seller’s commission. This may offend buyers’ agents, “But even stipulating that you will not get the buyer’s commission from the seller’s side, doesn’t work most of the time.” Do yourself and your investor clients a favor and don’t bid for them. Have the investor pay you a buyer’s commission on the HUD-1 Statement. I suggest you only tell the closing agent after a contract has been signed by the seller (bank’s Asset Manager). Also, the last listing price on the MLS becomes a glass ceiling for the investor if he wants to wholesale it so don’t think you can just re-list it unless he does substantial repairs to it.

2. What about a MLS listed property in general? If it has been listed on the MLS more than five days, it becomes “price tainted” as the days on the market (“DOMs”) get larger and larger. Ultimately it is only for a retail buyer to buy it with conventional financing – not what your investor has in mind unless he bought it substantially lower. If the property has a price reduction it may be a buying opportunity, if the seller is really motivated. However, as always, any realtor can also see this update and be on it with a retail buyer. As a realtor you are better off to become an investor or partner with an investor to make more money on deals that are “pocket listings” or direct seller contracts with motivated sellers. Personally, I believe pocket listings are unethical for the seller could likely get a higher price in the open market and in some states these are a third degree felony for the buyer and the realtor.

3. As for Realtors finding buyers for investor properties, there is no doubt that the MLS is the spot for many retail buyers to find their dream homes. As investors selling wholesale properties, the benefit of the MLS is getting exposure to other investors searching for bargains. Usually these are newbies who believe what a realtor has told them about finding deals there. The frustration for the realtor comes when the investor doesn’t think it’s a deal and doesn’t’ buy it. Even worse is when it’s not a deal and the investor does buy it only to learn just how much money can be lost on a single deal. If it is such a deal, “Why don’t the realtors buy them?”,- basically because they don’t have the money (not successful enough or don’t understand doing “no money” deals) or they won’t take the market risk – both are opposite to investor thinking.

You may have gotten the idea that I am anti-realtor but that isn’t true at all. Some of my best friends are realtors because they’re also investors. It is in the best interest of any investor to spend some time before getting involved with a realtor so both parties understand how they will operate and what is expected of both parties. If the realtor “gets it” they will not want to chase listed properties for the investor, if the investor “gets it”, he will realize the realtor has no special ability that he doesn’t have and the realtor is handicapped by his license.

These comments and analysis represent my opinions only and are based solely on 34 years of investing experience and having worked with hundreds of realtors®. In general, realtors are hard working but disrespected individuals because their commissions are fully disclosed to the buyer/seller. Few other industries have this burden to answer to with sellers’ question of, “What am I paying for?” Realtors® have the ability to become great investors but the few who do generally drop their licenses because of unrealistic legal restrictions. This is not a reflection of any other investors’ opinions.

Tax Deeds and Tax Liens – Your Simple Guide

The safest place to invest money is in real estate. If you are thinking of investing your money in this business, try considering tax lien and tax deeds investments.

What is tax lien? A tax lien is where lien is filed on a property by the local authority when a property owner – deliberately or unintentionally – fails to pay the property taxes. In that case if an investor buys that lien, you become owner of a lien on the property. This way, the investor, with interest, receives interest on any unpaid tax or penalties which are put up on the property. Ultimately, the investor gains a good profit out of this investment.

A tax deed is quite different from a tax lien. When you buy a tax deed at an auction, it means you have become the new owner of the property. It gives you complete authority over the property. Whether you want to rent it, use for self-purpose or put it up for re-sale, it’s your property after all.

Counties and municipalities greatly rely on money from property taxes to earn their finances. When property owners fail to pay off their taxes, the county or municipality takes charge of the property and will sell off the taxes to an interested investor, who then pays the taxes on the property and puts a lien on the property. This is a good investment because investors get a good interest rate on their deal and not to mention, a tax lien is ahead of numerous other liens, so the investor is definitely paid and gets good money in return.

In some cases, when a property owner fails to pay off their taxes, county takes a different action than selling a lien – they will sell the property at a tax deed sale. A tax deed too, can make a profitable investment, particularly in states where property is sold off for acquiring back taxes since the investor has a possibility to purchase real estate at less market value.

Also, some counties sell redeemable tax deeds, in which the deed to the property is sold at the tax sale. But there is a liberation period given in which the felonious taxpayer can come back and redeem the property. In that case, the felonious taxpayer is legally charged to pay the investor either a penalty or interest on their investment. It’s either a penalty or in some cases, an interest rate. In some states this very penalty or interest rate can be very high, thus making it a fruitful experience for the investor. So, dear investor! You may count your chickens before they hatch. Nevertheless, you’d have to wait until they do. To further enhance your information, tax liens can earn you a return as high as 50% on your investment.

With time, resources and money you can successfully acquire a tax lien or a tax deed and earn a nice profit for instance 24%, 30% 36% and even acquire 50% return on your investment.

Consulting a real estate attorney in advance is a good way to get your queries and confusions laid to rest.

Little Information On Chartered Accountants And What Is Their Importance

Managing your own finances is OK for those people who know how or those don’t have too many accounts or too large an income but this is not the case for everybody. Businessmen may have a great working knowledge of their finances but may not necessarily have the time to do everything themselves. Also if you have a large number of investments and many different accounts into which your profits are being deposited then you need someone who is completely dedicated to keeping track of these. For all these reasons it is important to have a chartered accountant. This is a professional whose sole duty is to keep track of all your expenses, accounts, deposits and any other money related issues.

If you are a resident of London or for that matter any city in the world, a chartered accountant should be fairly easy to come by. With economic boom before the recession and the also with the world standing up on its feet again post-recession the profits of a lot of businesses has been steadily rising and thus the dependence on these kind of professionals has also risen proportionately. This is the reason why the number of people opting to become accountants has also risen tremendously. The Chartered Accountant or CA exams to be taken to receive the required certifications are not easy but are still being attempted by a large demographic because it is an extremely lucrative career option. For large corporation heads as well as the corporation itself CAs are practically indispensable.

Another really important duty that a CA is expected to carry out is filing the income tax dues at the end of the financial year. Anyone who has attempted to file their own taxes is aware of just how tedious these procedures really are. They are time consuming and need to be done extremely carefully because if you miss anything out or misfile any documentation then it can be considered to be tax fraud that could result in a felony. This is the reason why getting a CA to handle this will work in your favor because he or she is trained to know all the ins and outs of the tax system and will make sure everything is not only submitted but also that it is done in a timely manner. This way you are saved of the headache as well as any problems that may arise later on!

DUI Convictions and Renting a Home

At this point you should be well aware of the consequences of a driving under the influence/driving while intoxicated (DUI/DWI) charge. Jail time, monetary fines, and so on. However, something more and more people are discovering in the recent home turnover is that it can also impact your ability to find a home. Herein I will address the different repercussions that might be felt if you find yourself in that situation.

A landlord may not discriminate against tenants based on age, sex, race, religion, or nationality. What about discriminating against those with criminal records? You betcha! Not only is there no protection for such people, it is almost universal practice to conduct a criminal background check on potential tenants, at the tenants’ cost. Typically, when a new tenant applies to live in a property, their information is sent to a private investigator (PI) who conducts a multifaceted check on their finances and records.

While it is up to the individual landlord to decide what is and is not acceptable, typically any felony and most criminal charges will disqualify a tenant.

What about a DUI?

Depending on the jurisdiction, most DUI’s are criminal offenses and will show up on a criminal background check. Some felonies are considered felonies, and are often immediate disqualifiers. The advisable course for a potential tenant with a DUI conviction is to be upfront and honest with the future landlord when applying, and to detail what the potential tenant has done to remedy the situation. Every landlord is concerned about the tenant’s ability to pay their rent, and so they will be concerned that a small incident could cause the renter to be placed into custody for an extended period of time.

If you have been charged with a DUI, before your court date it is important to contact a DUI attorney. A DUI lawyer will represent you in court and can negotiate with the prosecution to alleviate the potential consequences, or if there has been some kind of procedural issue they may facilitate in having the charges thrown out.