RP firm's boss to be jailed for $100-M US health plan fraud
CHICAGO, Illinois – The American chief executive officer of a Philippine-registered company was sentenced to five years for duping a US government agency of almost $100-million in phony health claims.
Thomas Arthur Lutz, 41, president and CEO of Health Visions Corporation (HVC) based in Olongapo City will start doing time on March 18, 2009.
Assistant US Attorney Peter M. Jarosz of the Western District of Wisconsin in Madison, said Lutz's sentence was deferred until 2009 to give him time to liquidate the assets of HVC so that he and the firm could pay for the $99-million restitution.
Lutz, whose wife is a Filipina, was sentenced for mail fraud by Chief Judge Barbara B. Crabb, also from the US District Court of Western District of Wisconsin.
Last April 24, Crabb ordered HVC to liquidate all of its assets and pay $99,915,131 in restitution, $500,000 fine, and forfeit $910,910.60.
The corporation was placed on probation and was given ten months to liquidate its assets.
HVC was also ordered to enter into a consent decree in which all its officers, directors, and employees agree to a permanent exclusion as providers of TRICARE and other government programs.
The corporation pleaded guilty to the fraud charge on May 25, 2007. The Court sealed the plea agreement to allow Health Visions to begin the liquidation of its assets.
Lutz pleaded guilty on Dec. 11, 2006 to Count 33 in relation to his participation in a conspiracy with Health Visions and a physician in the Philippines to double bill TRICARE and get kickbacks from the inflated payments to Health Visions. He also agreed to assist the government in its investigation.
On July 15, 2005, a federal grand jury in Madison returned a 75-count superseding indictment against Health Visions and Lutz.
The indictment charged the corporation and Lutz with defrauding the TRICARE Program.
TRICARE, formerly known as CHAMPUS or the Civilian Health and Medical Program of the Uniformed Services, is the US Department of Defense's worldwide health care program for its military personnel, including those who retired from the service and their dependents.
The charges against the corporation and Lutz stemmed from their alleged plan of defrauding the TRICARE program from October 1998 to August 2004 by entering into an agreement with a medical provider in the Philippines, in exchange for kickbacks.
At the request of Lutz, the provider paid 50 percent of the bills for medical services rendered to TRICARE patients. It was Health Visions that referred the patients to the health provider in the Philippines.
Also, before submitting the bills for payment by the United States government, the court found out that Health Visions and Lutz inflated the bills of other providers by at least one hundred percent.
The defendants also created a sham insurance program to circumvent TRICARE's requirement that beneficiaries pay a deductible and cost share. They were also accused of submitting fictitious and fraudulent TRICARE claims that beneficiaries had been hospitalized rendered services to the military.
Erick C. Peterson, US Attorney for the Western District of Wisconsin, said in a press statement that, "This conviction furthers our goal to protect the TRICARE program. Our veterans deserve quality health care, and our nation deserves a program free from fraud. We will continue to vigorously investigate these cases."
Part of the scheme involved Health Visions directing WPS to send payments for all the
TRICARE claims to a lockbox account in the name of HVC at Bank of America (BA) in Columbia, Missouri.
When the account reached $1 million, Lutz's brother directed the bank in Missouri to wire transfer the funds in increments from HVC's account at BA to another Health Visions account at United Cocoa (sic) Planters Bank in Manila.
Between 1998 and 2004, WPS paid over $163 million in total TRICARE claims submitted by HVC. Of this amount, $144.6 million came from third-party billing by HVC and $18.7 million was from direct billing from HVC-owned hospitals.
Jarosz said at least five hospitals, one of them in Iloilo province, in the Philippines, were involved in the scam. A similar scam is being investigated in other countries such as Mexico, Panama and Costa Rica.
JOSEPH G. LARIOSA, GMANews.TV
Thomas Arthur Lutz, 41, president and CEO of Health Visions Corporation (HVC) based in Olongapo City will start doing time on March 18, 2009.
Assistant US Attorney Peter M. Jarosz of the Western District of Wisconsin in Madison, said Lutz's sentence was deferred until 2009 to give him time to liquidate the assets of HVC so that he and the firm could pay for the $99-million restitution.
Lutz, whose wife is a Filipina, was sentenced for mail fraud by Chief Judge Barbara B. Crabb, also from the US District Court of Western District of Wisconsin.
Last April 24, Crabb ordered HVC to liquidate all of its assets and pay $99,915,131 in restitution, $500,000 fine, and forfeit $910,910.60.
The corporation was placed on probation and was given ten months to liquidate its assets.
HVC was also ordered to enter into a consent decree in which all its officers, directors, and employees agree to a permanent exclusion as providers of TRICARE and other government programs.
The corporation pleaded guilty to the fraud charge on May 25, 2007. The Court sealed the plea agreement to allow Health Visions to begin the liquidation of its assets.
Lutz pleaded guilty on Dec. 11, 2006 to Count 33 in relation to his participation in a conspiracy with Health Visions and a physician in the Philippines to double bill TRICARE and get kickbacks from the inflated payments to Health Visions. He also agreed to assist the government in its investigation.
On July 15, 2005, a federal grand jury in Madison returned a 75-count superseding indictment against Health Visions and Lutz.
The indictment charged the corporation and Lutz with defrauding the TRICARE Program.
TRICARE, formerly known as CHAMPUS or the Civilian Health and Medical Program of the Uniformed Services, is the US Department of Defense's worldwide health care program for its military personnel, including those who retired from the service and their dependents.
The charges against the corporation and Lutz stemmed from their alleged plan of defrauding the TRICARE program from October 1998 to August 2004 by entering into an agreement with a medical provider in the Philippines, in exchange for kickbacks.
At the request of Lutz, the provider paid 50 percent of the bills for medical services rendered to TRICARE patients. It was Health Visions that referred the patients to the health provider in the Philippines.
Also, before submitting the bills for payment by the United States government, the court found out that Health Visions and Lutz inflated the bills of other providers by at least one hundred percent.
The defendants also created a sham insurance program to circumvent TRICARE's requirement that beneficiaries pay a deductible and cost share. They were also accused of submitting fictitious and fraudulent TRICARE claims that beneficiaries had been hospitalized rendered services to the military.
Erick C. Peterson, US Attorney for the Western District of Wisconsin, said in a press statement that, "This conviction furthers our goal to protect the TRICARE program. Our veterans deserve quality health care, and our nation deserves a program free from fraud. We will continue to vigorously investigate these cases."
Part of the scheme involved Health Visions directing WPS to send payments for all the
TRICARE claims to a lockbox account in the name of HVC at Bank of America (BA) in Columbia, Missouri.
When the account reached $1 million, Lutz's brother directed the bank in Missouri to wire transfer the funds in increments from HVC's account at BA to another Health Visions account at United Cocoa (sic) Planters Bank in Manila.
Between 1998 and 2004, WPS paid over $163 million in total TRICARE claims submitted by HVC. Of this amount, $144.6 million came from third-party billing by HVC and $18.7 million was from direct billing from HVC-owned hospitals.
Jarosz said at least five hospitals, one of them in Iloilo province, in the Philippines, were involved in the scam. A similar scam is being investigated in other countries such as Mexico, Panama and Costa Rica.
JOSEPH G. LARIOSA, GMANews.TV
Comments