Mental health services owner Calvin C. Estrich guilty of health care fraud, stealing identities, money laundering, etc.

December 17, 2013

CHARLOTTE, N.C. – A federal jury sitting in Charlotte returned a guilty verdict today for a Charlotte man accused of conspiring to defraud Medicaid of at least $700,000, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina. Calvin Cantrell Estrich, 32, of Charlotte, was convicted following a four-day trial before U.S. District Judge Max O. Cogburn, Jr. Estrich was also found guilty of committing health care fraud, making false statement in connection with a health care program, stealing the identities of children and clinicians to commit the fraud, money laundering and making false statements to investigators.

U.S. Attorney Tompkins is joined in making today’s announcement by Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID).

“We will not allow the likes of Estrich to use Medicaid or any other taxpayer funded health care program as their personal ATMs,” said U.S. Attorney Tompkins in making today’s announcement of the guilty verdict. “Working together with our state partners we will find and prosecute those who pilfer precious health care resources from patients who need them and use scams to pocket taxpayer dollars.”

“Ripping off Medicaid harms needy patients, wastes tax dollars and contributes to rising health care costs,” North Carolina Attorney General Roy Cooper said. “This conviction sends a strong message that criminals who cheat Medicaid will pay, and it’s a great example of our ongoing partnership to stamp out health care fraud here in North Carolina.”

According to filed court documents and trial proceedings, from October 2009 to November 2010, Estrich and his co-conspirator, Joye Strong, participated in a scheme to defraud Medicaid for medically unnecessary services. Estrich’s company, Everyday’s Blessing, was approved by Medicaid to provide Intensive In-Home Community Intervention Services, which are mental and behavioral services designed to stabilize living arrangements for youth and children and prevent out-of-home therapeutic treatment. Trial evidence showed that Estrich and Strong stole and misused the identities of a nurse practitioner and two therapists in order to complete the necessary paperwork for Medicaid to approve services for Medicaid recipients to receive these services. According to evidence presented at trial, once Medicaid approved Everyday’s Blessing to provide services to these recipients based upon the fraudulent paperwork, Estrich and Strong sought and received payment from Medicaid for the fraudulent services. Evidence presented at trial established that in many instances, the Medicaid recipients did not receive any services at all. For example, evidence presented at trial established that Estrich, aided and abetted by others, used the Medicaid recipient identification number of a juvenile identified as “J.R.” and falsely and fraudulently billed Medicaid for services that J.R. never received. Estrich and Strong, through Everyday’s Blessing, received over $24,000 in payments from Medicaid for these false services.

Evidence presented at trial also showed that Estrich and Strong stole the identity of therapist “J.O.” in order to obtain approval from Medicaid for fraudulent and medically unnecessary services. Trial testimony revealed that J.O. provided her name and credentials to Strong when she sought employment at another company operated by Strong. Thereafter, Estrich and Strong stole and misused J.O.’s identity by forging J.O.’s signature to paperwork for diagnostic and therapeutic services which J.O. did not perform.

According to trial evidence, based on the fraudulent claims Medicaid reimbursed Estrich and Strong $462,178, from which Estrich received $192,000 for his role in the scheme. Trial evidence also showed that when investigators interviewed Estrich about the fraud scheme in December 2012, Estrich made materially false and fraudulent statements to investigators.

Estrich remains free on bond pending sentencing. At sentencing, Estrich faces a maximum term of ten years in prison for the health care fraud conspiracy count and for each of the four counts of health care fraud. Each of the four counts of making false statements in connection with health care matters carries a maximum term of five years in prison. Each of the eight aggravated identity theft counts carries a mandatory prison term of two years. Estrich also faces a maximum of 10 years in prison for the money laundering charge and a maximum of five years in prison for the one count of making false statements to investigators in a federal health care fraud investigation. Each count of conviction carries a maximum fine of $250,000. A sentencing date for Mr. Estrich has not yet been set.

Estrich’s co-conspirator, Joye Strong, pleaded guilty to eight counts of health care fraud and two counts of money laundering on October 4, 2011. Strong is awaiting sentencing on these charges.

The investigation into Estrich and Strong was handled by MID with assistance from the North Carolina Division of Medical Assistance.

The prosecution was handled by Special Assistant United States Attorneys Timothy Rodgers and Laura Lansford of the Western District of North Carolina. Mr. Rodgers is a Special Deputy Assistant Attorney General and Ms. Lansford is an Assistant Attorney General with the North Carolina Department of Justice Medicaid Investigations Division. The SAUSA position is reflection of the partnership between the Medicaid Investigations Division and the United States Attorney that helps ensure the effective and vigorous prosecution of Medicaid fraud.

The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The Task Force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil prosecutors, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future. The Task Force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistle blower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The Task Force builds upon existing partnerships between the agencies and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.

Source: "Defendant Submitted Over $700,000 In Fraudulent Reimbursement Claims To Medicaid," news release of United States Attorney for Western District of North Carolina," November 22, 2013.