Mental health counselor gets 35-year prison sentence in biggest-ever U.S. mental health fraud case

October 11, 2011

A federal judge Monday issued another astonishing prison sentence in the nation’s biggest mental-health fraud case, sending a Miami therapist to prison for 35 years.

Marianella Valera, 40, a naturalized U.S. citizen from Peru who ran Miami-based American Therapeutic Corp. with her boyfriend, received less time in prison than he did.

On Friday, Lawrence Duran, 49, a New York transplant, got 50 years as the mastermind of the massive Medicare-fraud scheme —- accounting for more than $200 million in bogus billing to the taxpayer-funded program.

But in both instances, U.S. District Judge James Lawrence King gave out the longest prison sentences ever for a Medicare-fraud offender. Previously, the longest sentence was a 30-year term imposed in 2008 on a Miami physician convicted in an HIV-therapy scam.

This year, Duran and Valera pleaded guilty to a variety of conspiracy, fraud and money-laundering charges after they failed to reach plea deals with the Justice Department.

Prosecutors had pushed for a 40-year sentencing, but Valera’s lawyer, Arthur Tifford, sought considerably less time.

Justice Department lawyer Jennifer Saulino argued that Valera abused her “position of trust” as the licensed owner of American Therapeutic. Duran had registered the company in her name to disguise his past ownership of a similar mental-health company, which had carried a $2 million debt.

“Valera, a licensed mental health counselor in the state of Florida, held herself out as the face of American Therapeutic Corporation,” Saulino wrote in court papers. “She was the president and CEO — the licensed therapist in charge — whose picture was prominently figured on the ATC website.”

The couple’s company, with clinics stretching from Miami to Fort Lauderdale to Orlando, collected $87 million in Medicare payments after submitting $205 million in false claims. The couple paid kickbacks to recruiters to supply patients suffering from dementia, Alzheimer’s and addictions, but they could not have benefited from the company’s purported group therapy sessions.

Saulino, the prosecutor, further noted in court papers: “Valera certified that she would never knowingly submit claims to the Medicare program with reckless disregard for their truth or falsity.

“Valera has admitted she violated that certification for every one of the bills ATC submitted to Medicare,” Saulino wrote.

The seven-clinic chain submitted some 866,000 claims to the federal program for the elderly and disabled between 2003 and 2008.

Valera and Duran also threw “charting” parties, where they and other American Therapeutic employees altered patient records to make it look like they needed the purported group therapy sessions when they didn’t.

According to court records, Valera, like Duran, enjoyed the good life until her arrest last October, thanks to American Therapeutic’s profits.

Valera bought a BMW M3 coupe, an Audi sports car, a Land Rover Range and a Harley Davidson motorcycle.

A subsidiary of the clinic chain, MedLink, which was used for money laundering, issued a check for $212,000 toward Valera’s purchase of an Opera Tower condo overlooking Biscayne Bay. MedLink also paid her association fees.

A total of 34 people, including American Therapeutic employees, doctors, therapists, nurses and recruiters, have been charged in the ongoing fraud case, which is being investigated by the FBI and Health and Human Services-Office of Inspector General.

This year, about a dozen defendants have pleaded guilty.

The criminal case was sparked by a former nurse who once worked for American Therapeutic. She filed a civil whistle-blower case in 2007 with the Justice Department.

Source: Jay Weaver, "Miami woman gets 35 years for Medicare fraud," Miami Herald, September 19, 2011.