Tennessee Health Care Executives Charged in $4.6-M kickback scheme

April 19, 2018

A kickback scheme that allegedly defrauded Medicare and lined the pockets of two health care executives was halted this week by the government. John Davis and Brenda Montgomery, two top executives and owners of health care companies involved in the scheme, were charged not only for the kickback scheme but also for having defrauded Medicare. They were arrested morning of April 9.

The government said that from around June 2011 to June 2017, Montgomery agreed to pay Davis illegal kickbacks in exchange for Medicare referrals for durable medical equipment. Montgomery owns the medical equipment company CCC Medical Inc. Davis, meanwhile, is former CEO of pain management company Comprehensive Pain Specialists (CPS). As head and owner of CPS, Davis allegedly used the CPS to generate need, and sales, for CCC Medical’s durable equipment, in exchange for 60 percent of Medicare proceeds collected on claims for these.

“The charges against John Davis and Brenda Montgomery, alleging almost three quarters of a million dollars in illegal health care kickbacks and the submission of over $4.6 million in fraudulent claims to Medicare, demonstrate the Department of Justice’s commitment to protect taxpayer dollars and to hold corporate executives accountable for fraudulent and abusive conduct,” said Acting Assistant Attorney General Cronan.

The government also charged the two for their efforts to cover up their scheme. These involve making kickback payments through a nominee, creating and filing false tax documents, creating and filing false tax documents, and, for Davis, intervening as CEO to prevent the owners of CPS from obtaining their own Medicare DME supplier numbers that would have allowed CPS to bill for its own Medicare DME orders.

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The government said that since around May 2015, Davis and Montgomery renegotiated their illegal agreement to further obscure their personal contract from Medicare and from CPS owners and employees.  This, the government said, resulted in a sham purchase of a shell entity known as ProMed Solutions, LLC. Montgomery allegedly paid $150,000 for this, to induce Davis to continue driving CPS referrals to CCC Medical, the government lawyers said.

All these, so far, are still allegations. Davis and Montgomery are presumed innocent until proven guilty beyond a reasonable doubt in a court of law, the Department of Justice said on April 11.

U.S. Attorney Cochran promised “unrelenting efforts” to bring to justice individuals and corporations who he said choose profit at the expense of the health of those in greatest need.

“Stealing funds from our health care system places the vulnerable at greater risk and diverts public funds into the pockets of the greedy individuals who exploit those with the greatest need,” he said.

Trial Attorney Anthony Burba of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ryan Raybould of the Middle District of Tennessee are prosecuting the case.

More than 3,500 defendants have previously been charged by the government’s Medicare Fraud Strike Force. These defendants have collectively billed the Medicare program for over $12.5 billion. Private whistleblowers have helped the government achieve this.

If you know of similar kickback schemes or moves defrauding Medicare, help put a stop this. Call our Whistleblower Law Firm Toll Free (877) 561-0000