A Sebastian County man is charged with one count of health care fraud in a six-state federal crackdown on $143 million in false billings, including charges for medical tests never done, the U.S. Department of Justice announced Wednesday.
Billy Joe Taylor, 42, of Central City, defrauded the U.S. government of more than $88 million since November 2017, according to federal charges.
About a dozen fraudsters offered covid-19 tests to get the Medicare numbers of unsuspecting patients and used the information to bill for unneeded genetic tests costing thousands of dollars, according to the charges.
A message left at Taylor's attorney's office wasn't returned Wednesday. Central City is southeast of Fort Smith between Barling and Lavaca. The town has a population of about 540, according to U.S. Census estimates.
[CORONAVIRUS: Click here for our complete coverage » arkansasonline.com/coronavirus]
Taylor owns and operates two medical testing companies, Vitas Laboratories in Barling and Beach Tox in Torrance, Calif. Taylor used names and Social Security numbers from patients to file false claims for tests, including $42 million related to covid-19 tests, according to the criminal complaint.
The hundreds of false claims included fictitious tests in the names of patients who died, according to the charge.
Beach Tox had no working laboratory testing equipment after Taylor and other investors acquired it, according to court documents. Yet Beach Tox billed Medicare for more than $65 million in claims. Taylor had sole authority over billing at Beach Tox, according to the documents.
Connor Hagan, public affairs officer for the FBI's Little Rock office, said the charges against Taylor are why the FBI and several federal, state and local agencies were searching homes and businesses throughout western Arkansas on Tuesday.
The search included residences off Arkansas 255 in Central City and Vintage Vibes, a guitar store at 8819 Rogers Ave. in Fort Smith, in addition to places in Fayetteville and Oklahoma, Hagan said.
He said more than six properties were involved and all were connected to Taylor. Assets purchased with money believed to come from Taylor's fraud scheme, such as high-end luxury vehicles and electronics, were seized during the investigation.
Taylor was in the custody of the U.S. Marshals Service on Wednesday, according to Hagan. The marshals, along with the Fort Smith Police Department and Sebastian and Crawford county sheriff's offices, were among the other agencies involved in the investigation, Hagan said.
"The multiple health care fraud schemes charged today describe theft from American taxpayers through the exploitation of the national emergency," Deputy U.S. Attorney General Lisa O. Monaco said.
"These medical professionals, corporate executives and others allegedly took advantage of the covid-19 pandemic to line their own pockets instead of providing needed health care services during this unprecedented time in our country," Monaco said.
The charges were leveled a little more than a week after U.S. Attorney General Merrick Garland ordered the establishment of a special task force dedicated to countering covid-19 fraud.
The task force was designed to bring together the Justice Department's resources with other government agencies against pandemic-related fraud, Garland said in a memo to senior department officials.
Monaco, who was named head of the task force, will look for trends and examine past enforcement actions, in addition to bolstering efforts to investigate and prosecute criminals in the U.S. and internationally.
The Centers for Medicare and Medicaid Services announced Wednesday it took administrative actions against more than 50 medical providers involved in health care fraud schemes relating to covid-19 or abuse of Medicare and Medicaid programs designed to encourage access to medical care during the pandemic.
Medicare is a federal health care program for 65 and older. Medicaid is a state-administered, largely federally funded health care program for the poor.
"Medical providers have been the unsung heroes for the American public throughout the pandemic," FBI Director Christopher Wray said in the U.S. Department of Justice statement. "It's disheartening that some have abused their authorities and committed covid-19 related fraud against trusting citizens."
A number of defendants in the crackdown offered covid-19 tests to Medicare beneficiaries at senior-citizen living facilities, drive-thru covid-19 testing sites and medical offices to induce the beneficiaries to provide their personal identifying information and a saliva or blood sample.
The information and samples in each of the related cases were then used to submit claims for false and expensive laboratory tests, according to the Justice Department. Even when the tests were done, the covid results in many cases were delayed too long to be useful to either the patients or their doctors, the agency said.
The proceeds of the fraudulent schemes were laundered by each of the defendants through shell corporations and used to purchase exotic automobiles and luxury real estate, the Justice Department claims.
Taylor is the only Arkansas defendant in the case as of Wednesday. He's charged in the Justice Department's Western District of Arkansas.
Others charged include three people in the Northern District of California, one in the Central District of California, four in the Southern District of Florida, one in the Middle District of Louisiana, two in New Jersey and two in New York.
The charges go back to the early months of the pandemic, when there was a high demand for covid tests that were still in short supply. Also, Medicare had loosened its restrictive policies on telemedicine consultations to keep older patients out of medical offices where the virus might spread.
And the government had begun pumping out billions in special "provider relief" payments to help hospitals and doctors' offices remain solvent.
The schemes have shifted lately, and now involve fake vaccination cards bearing a likeness of the official Health and Human Services logo, said Chris Schrank, assistant inspector general for investigations with the Department of Health and Human Services.