Court upholds conviction of Maria C. Palazzo, convicted of Medicaid fraud

March 25, 2010

A federal appeals court has upheld psychiatrist Maria Carmen Palazzo's fraud convictions.

Palazzo was indicted June 14, 2007 on 55 counts of health care fraud and false documentation associated with a clinical trial of Paxil in children and adolescents, conducted at New Orleans’ Touro Infirmary.  She also defrauded the Medicare program by submitting false and fraudulent invoices to Touro for consulting and medical director services. 

On April 16, 2008, she was convicted of 39 of the counts. 

On January 14, 2009, Palazzo was sentenced to 87 months in federal prison, restitution of $655,260.97 to the Medicaid and Medicare programs and three years of supervised release following her prison sentence.

In her appeal of the conviction, Palazzo claimed jurors heard insufficient evidence to support her convictions for defrauding the Medicare program by billing for services she didn't provide.

But a three-judge panel from the 5th U.S. Circuit Court of Appeals rejected that argument this week affirmed her convictions.

Federal prosecutors say Palazzo submitted false invoices to Touro Infirmary as part of the scheme. She was sentenced last year to 87 months in prison and ordered to pay more than $655,000 in restitution.

Source: "N.O. psychiatrist's fraud convictions upheld," Associated Press, March 25, 2010; "Local psychiatrist indicted for fraud associated with mentally ill patients and children in clinical trials," press release of the the United States Attorney's Office, Eastern District of Louisiana, June 14, 2007 and "New Orleans doctor sentenced to seven years, 3 months in federal prison for healthcare fraud violations," press release of the the United States Attorney's Office, Eastern District of Louisiana, January 14, 2009.