Alabama Psychologist Sharon D. Waltz Charged with $1 Million in False Medicaid Claims

August 20, 2019

A Birmingham psychologist has been charged with defrauding the Alabama Medicaid Agency of more than $1 million by filing false claims for counseling services that were not provided.

Sharon D. Waltz, 50, has agreed to plead guilty to the charge and pay restitution in the amount of $1.5 million, according to a joint announcement Thursday by Northern District of Alabama U.S. Attorney Jay Town, Department of Health and Human Services -Office of Inspector General Special Agent Derrick L. Jackson and Alabama Attorney General Steve Marshall.

“The greed of this defendant deprived mental health care to many at-risk young people in Alabama, with the focus on profit rather than the efficacy of care,” Town said. “The costs are not just monetary but have social and health impacts on the entire Northern District. This prosecution, and this investigation, demonstrates what is possible when federal and state law enforcement agencies work together.”

Waltz operated Capstone Medical Resources in a number of locations around the state, with its primary officer in Birmingham. Among other services, Waltz provided individual and group counseling sessions for at-risk youth. The charge against her states that many of the services billed to the Alabama Medicaid Agency were never performed.

She is the former mistress of Jonathan Dunning, the former Birmingham Health Care CEO who was sentenced to 18 years in federal prison for siphoning $13.5 million intended for health care for the poor. Waltz, who worked with Dunning at the BHC clinics, was not charged in that case but did testify against Dunning in the 2016 trial. Waltz has two children by Dunning, who was her married boss at the time. She filed a sexual harassment lawsuit in 2013, but the case was tossed out in 2015.

Birmingham Health Care was one of a nationwide network of federally funded clinics to treat the poor. It is now called Alabama Regional Medical Center (ARMS). Dunning’s release date from a Louisiana prison is Aug. 9, 2032.

In the case against Waltz, the Program Integrity Division of the Alabama Medicaid Agency launched an investigation after an audit showed that Waltz’s billings to the Medicaid Agency had increased from $99,000 in 2015 to more than $2.2 million in 2017. The findings of that audit were turned over to the Attorney General’s Medicaid Fraud Control Unit after Waltz submitted falsified records during the audit.

A subsequent investigation was conducted by the Medicaid Fraud Control Unit and the Office of Investigations of the U.S. Department of Health and Human Services Office of Inspector General. That investigation determined that the majority of claims submitted by Capstone from 2016 through 2018 were fraudulent and that Waltz submitted and directed her employees to submit claims for counseling services that never occurred, and in some instances for individuals—including family members and friends of employees—who never received services at all.

“This defendant was entrusted to provide essential mental health care for young people who were at risk, and to provide these services through an agency with scarce resources for vulnerable Alabamians who are truly in need,” Marshall said. “Her actions demonstrate a callous abuse of this trust and a fraud of staggering proportions against the Alabama Medicaid Agency and the taxpayers of our state. Thankfully, the vigilance of this agency served to protect public funds from further misuse and she has been held to account and punished for her crimes.”

“Stealing tax payer dollars meant for vital community services will not be tolerated,” said Jackson. “The OIG will continue to work with our partners at the Alabama Medicaid Fraud Control Unit to ensure that fraud schemes such as these are identified, and the perpetrators punished.”

The U.S. Department of Health and Human Services OIG, the Alabama Attorney General’s Medicaid Fraud Control Unit, and the Program Integrity Division of the Alabama Medicaid Agency, investigated the case, which Assistant U.S. Attorney J.B. Ward and Assistant Attorney General Bruce Lieberman, working as a Special Assistant U.S. Attorney, are prosecuting. Sentencing has not yet been set but Waltz faces up to 20 years in prison.

Source: “Birmingham psychologist defrauded state Medicaid of more than $1.5 million, authorities say,” AL.com, August 15, 2019. URL: https://www.al.com/news/birmingham/2019/08/birmingham-psychologist-defrauded-state-medicaid-of-more-than-15-million-authorities-say.html