Miami U.S. Attorney’s Office accused again of spying; A ‘mole’ in the defense camp?

By Dan Christensen, FloridaBulldog.org 

Defense lawyers Marc Nurik, left, and J. David Bogenschutz

Defense lawyers Marc Nurik, left, and J. David Bogenschutz

For the second time this summer, Miami federal prosecutors stand accused of spying on the defense – this time in the case of an alleged $28-million, international sweepstakes fraud.

As described in court papers, the “invasion of the defense camp” appears to have begun in February when one of four defendants in the case cut a secret plea deal with the U.S. Attorney’s Office and began working undercover.

The informant, John Leon of Wilton Manors, participated in defense team strategy sessions for three months as a government “mole,” obtaining documents and listening to privileged discussions about witnesses and other sensitive defense matters and reporting back to the government, the documents say.

The fallout: defense accusations that the case has been irretrievably “tainted” due to constitutional violations of the attorney-client privilege.

“For a period exceeding two months, Leon, acting as a government informant with the government’s acquiescence, invaded the defense camp where he learned critical defense strategies by actively participating in numerous meetings, after already accepting a government plea and agreeing to cooperate,” say court papers filed by attorneys Marc Nurik of West Palm Beach, J. David Bogenschutz of Fort Lauderdale and Marshall Dore Louis of Miami.

Assistant U.S. Attorney H. Ron Davidson, while acknowledging that defendant Leon became a covert “government cooperator,” told U.S. District Judge Darrin P. Gayles in a July 8 pleading that Leon “never shared privileged information with the United States, the United States never asked for privileged information and the defendant’s motion lacks any merit.”

The judge, however, has sided so far with the defense. On Aug. 3, after an initial hearing, he ordered the government to turn over to the defense all “rough notes” of interviews of Leon by Internal Revenue Service agents who helped build the government’s fraud case. The defense had sought the agents’ notes, contending the government had “carefully sanitized” memos of interviews with Leon produced to the defense.

‘The ends of justice’

The same day, Judge Gayles also granted a continuance in the case and reset the trial date for Nov. 28, saying “the ends of justice outweigh the interests” of a speedy trial.

What’s expected to follow this fall is a full-blown hearing on whether felony charges of mail fraud, money laundering and conspiracy should be dismissed against the remaining defendants – Matthew Pisoni, Marcus Pradel and Victor Ramirez – due to government misconduct.

“An evidentiary hearing is exactly what is required to determine how to resolve these blatant [constitutional] violations, and the appropriate sanction for these pervasive violations,” attorneys Nurik and Bogenschutz said in court papers.

U.S. Attorney Wifredo A. Ferrer’s office declined Florida Bulldog’s request for comment.

In June, prominent Miami defense lawyer Howard Srebnick accused both the FBI and the U.S. Attorney’s Office of spying on the defense in a $55- million Medicare fraud case by illegally and obtaining copies of confidential defense documents. More specifically, it was alleged a government-approved copying service had surreptitiously provided agents with duplicates of documents culled by the defense team from 220 boxes of evidentiary records in preparation for trial.

The Florida Bulldog reported last month that those allegations of government misconduct dissipated weeks later when the U.S. Attorney’s Office abruptly gave all three defendants generous plea deals involving no prison time. The defendants had each faced lengthy jail terms if convicted.

The copying service, Imaging Universe, was fired. The U.S. Attorney’s Office conducted an internal inquiry, but declined to make public its findings. Srebnick withdrew his motion with the accusations after securing a deal for his client. Consequently, the judge never ruled on the merits.

The alleged scam

Pisoni was president of the now-defunct Mail Tree, Michael McKay, Spin Mail and other Florida companies that the government contends were used in the fraud. Pradel, Ramirez and Leon worked with him in the alleged scam.

The four were indicted together on May 7, 2015 for participating in a sweepstakes scheme that began in 2006. The indictment says victims were falsely notified by mail that they’d won a substantial prize, but needed to pay a fee of up to $50 to redeem their winnings.

Authorities have said the defendants collected more than $25 million from hundreds of thousands of victims in the U.S. and abroad, using shell companies and international bank accounts to lauder their loot.

Even before they were indicted, the four had learned they were under investigation “and circled the wagons in a Joint Defense Agreement,” the government said. A JDA is a contract in which defendants extend the attorney-client relationship among them to facilitate the sharing of privileged information.

But last winter, unknown to his fellow defendants, Leon and his Fort Lauderdale attorney, Omar F. Guerra Johansson, began plea negotiations that resulted in his Feb. 17 plea agreement with the government.

“His cooperation was kept covert because Leon was cooperating with the government against a non-charged defendant,” prosecutor Davidson wrote. “Moreover, the government specifically instructed Leon not to share privileged information.”

Leon’s plea deal became public on April 20 when the indictment against him was dropped and a single new conspiracy charge was filed. He’s now facing a maximum penalty of five years’ imprisonment. Before, like the others, he faced a maximum of 80 years in prison.

Miami U.S. Attorney’s Office, FBI accused of spying on defense in Medicare fraud case

By Dan Christensen, FloridaBulldog.org 

Judge Cooke has set a June 8 hearing to consider alleged wrongdoing by federal prosecutors and agents.

Judge Cooke has set a June 8 hearing to consider alleged wrongdoing by federal prosecutors and agents.

In a stunning twist in a long-running Medicare fraud case, both the Miami U.S. Attorney’s office and the FBI stand accused of spying on a defendant’s lawyer by illegally and secretly obtaining copies of confidential defense documents.

Court papers filed last week by attorneys for Dr. Salo Schapiro contend the secret practice was not the action of “just one rogue agent or prosecutor.” Rather, it was apparently an “office-wide policy” of both the U.S. Attorney’s Office and the FBI that’s gone on for “at least 10 years.”

The unwritten policy involves “surreptitiously copying defense counsel’s work product through the government-contracted copy service that the government requires defense counsel to use to obtain the discovery documents’’ needed to properly prepare for trial, according to court papers that seek either the dismissal of Schapiro’s indictment or the disqualification of the entire prosecution team.

Miami attorneys Howard Srebnick and Rossana Arteaga-Gomez represent Schapiro and filed the motion, which asserts that the U.S. Attorney’s Office has for several weeks been investigating itself in the matter.

Miami U.S. District Judge Marcia G. Cooke held an initial hearing Tuesday that was continued until June 8 at 1:30 p.m. The judge, in an order, has asked both parties to respond to this extraordinary question: “What remedies, if any, are available to the court were the court to find that the described conduct in defendant Schapiro’s motion is a systemic, consistent and/or pervasive practice of or on behalf of the United States Attorney’s Office?”

A spokeswoman for Miami U.S. Attorney Wifredo Ferrer would not be interviewed. However, late Thursday night prosecutors filed court papers confirming that an internal probe is underway and asserting that defense arguments are “based on erroneous accusations and insinuations.”

Howard Srebnick, left, and James V. Hayes

Howard Srebnick, left, and James V. Hayes

“Despite the charged language this is not a case about intrusion into the attorney-client relationship, eavesdropping or sneaking into the defense camp,” wrote Assistant U.S. Attorney James V. Hayes and Justice Department fraud attorney Lisa H. Miller.

Defense attorney Srebnick did not return a phone call seeking comment.

 Specifically, the court papers allege that Fort Lauderdale-based copying service Imaging Universe and president Ignacio E. Montero provided the government with CDs containing duplicates of documents Schapiro’s defense team culled from 220 boxes of evidentiary records in preparation for trial. Federal agents had seized those records from the mental-health clinic Biscayne Milieu, where Schapiro worked.

“Covertly cloning defense counsel’s work-product to obtain a tactical advantage is nothing short of ‘shocking to the universal sense of justice’ mandated by the Due Process Clause of the Fifth Amendment,” Srebnick and Arteaga-Gomez wrote. “To the extent that the prosecution team can infer from Dr. Schapiro’s selection of discovery documents his thought process, the government has violated his Fifth Amendment right not to be compelled to be a witness against himself. This intrusion into the attorney-client relationship has also violated Dr. Schapiro’s Sixth Amendment right to the effective assistance of counsel.”

The government responds

The government’s Thursday night response acknowledged that Imaging Universe did supply the FBI with duplicate CDs of what the company had copied for Schapiro’s defense team, but said the discs “were never requested by any agent, prosecutor or anyone else on the government’s behalf.”

Prosecutors Hayes and Miller also stated that they were unaware of the duplicate CDs until an FBI agent disclosed their existence in late April. They said that when they found out they immediately told “Montero to stop and began an internal inquiry.”

“To date it has found that there was simply no pervasive practice of receiving or recording defense discovery, and that it was not a widespread or institutionalized practice,” says the government’s response.

Nova Southeastern University constitutional law professor Robert Jarvis was skeptical of the defense’s sensational claims, but said that if the allegations prove true it could upend hundreds of criminal cases, free untold defendants and potentially result in criminal charges against government officials responsible for violating defendants’ rights.

“This opens a huge can of worms,” Jarvis said. “It’s potentially catastrophic for the government and I would think that the [U.S.] Attorney General would be swooping in on this. There are 95 judicial districts. If it happened in this office, you have to wonder if it’s happening in any others.”

Schapiro, 70, Sonia Gallimore, 74, both Broward residents, and Marlene Cesar, 64, of Allentown, PA., were indicted on charges of health care fraud and conspiracy and making false statements in September 2014. According to the indictment, they and other alleged co-conspirators submitted more than $55 million in phony Medicare claims through the Miami clinic, Biscayne Milieu, collecting more than $11 million. Previously, about 25 other owners and employees of the clinic pleaded guilty or were convicted of healthcare fraud.

On Tuesday, attorneys for Gallimore and Cesar filed paperwork seeking dismissal of their charges, claiming their clients’ rights were similarly violated by the alleged scheme.

The defense motion says that between late 2014 and last month, Schapiro’s lawyers repeatedly visited an FBI warehouse in Miramar where discovery documents are kept for review. During Arteaga-Gomez’s first visit to the warehouse federal agents told her that if she wanted to copy any documents she would have to use Imaging Universe, the motion says.

Since the indictment, Imaging Universe has charged Schapiro $8,200 to produce nine sets of discovery documents to his defense team. The motion identifies those records to include a dozen CDs containing approximately 1,140 PDF files, many with multiple pages.

The motion contends that company president Montero “lied” to Arteaga-Gomez about the copying process, and instead of making sure the government did not see the defense’s hand-selected files, provided FBI case agent Deanne Lindsey with duplicate copies.

Montero did not respond to a detailed voicemail message seeking comment.

Prosecutor discloses FBI received defense CDs

Hayes, the federal prosecutor on Schapiro’s case, first informed Srebnick and his associate that agent Lindsey “had been surreptitiously receiving the CDs” on April 22, according to the defense motion.

“Hayes proposed to immediately destroy the CDs,” but the lawyers asked instead that he give them to the defense, “which he did,” the motion says.

Hayes declined to be interviewed about the matter.

Arteaga-Gomez phoned Montero on April 25 to ask who had told him to provide copies of the CDs to the government. Montero, the motion says, answered that an “agent” told his office manager to do it. “Mr. Montero then stated that he had been providing to the U.S. Attorney’s Office for the past 10 years duplicate copies of the discovery documents selected by defense counsel in other cases.”

Montero also forwarded to Schapiro’s defense an April 21 email he sent to a healthcare-fraud paralegal in the U.S. Attorney’s Office, stating that he’d provided the Justice Department with duplicates of defense records “since 2006.” Montero added that both his old company, Xpediacopy, and Imaging Universe had done it.

If so, the alleged government misconduct spanned the administrations of three Miami U.S. Attorneys – Alex Acosta, who served from 2005-2009, Jeffrey Sloman acting U.S. Attorney from 2009-2010 and Wifredo Ferrer, who took over in May 2010.

Srebnick and Arteaga-Gomez wrote that they’ve recently had “multiple conversations” about the matter with Miami federal prosecutors and their supervisors.

“The U.S. Attorney’s Office has admitted that Agent Deanne Lindsey had been receiving copies of the CDs and had been keeping the duplicate CDs in a folder as she received them,” the motion says. Lindsey also “confessed to opening four of those duplicate CDs” looking for files, copying and pasting files onto her own CDs and providing “those new CDs to the government’s expert witness for trial preparation,” the motion says.

The prosecutors’ response sought to cast Lindsey’s contact with the records in less threatening way.

Prosecutors notified the defense last week that Montero had “confessed to lying to Rossana Arteaga-Gomez about the discovery process” in order to hide what was happening, the defense lawyers wrote.

“That the government-contracted copy service misled Ms. Arteaga-Gomez in order to cover-up the office-wide policy makes this case especially egregious,” the motion says.

Details about the size, terms and duration of Imaging Universe’s contract were not immediately available. The prosecutors’ response, however, said the contract is between Imaging Universe and the Government Publishing office.

Powerful medicine: Broward Health offers nearly $70 million to settle federal fraud probe

By Dan Christensen, FloridaBulldog.org bhpowerful

Taxpayer-supported Broward Health offered Thursday to pay $69.5 million to settle a four-year-old federal investigation into allegations of massive Medicare and Medicaid fraud.

The proposed payout is on top of more than $10.2 million the North Broward Hospital District – Broward Health’s legal name – already has paid an out-of-state law firm for legal advice about how to deal with the probe.

Broward Health’s executive boardroom was packed with as many lawyers as commissioners when the unanimous vote was made to approve the offer. The vote followed a two-hour non-public meeting about the case between the seven-member commission and defense counsel.

Commissioners offered no public explanation for their decision or how, if the government accepts the offer, it might impact Broward Health’s operations.  The enormous offer, however, signaled a collective belief that federal agents and prosecutors have turned up substantial evidence of wrongdoing that could prove much more costly if the matter is not settled soon.

Official silence followed an announcement, as the 7-0 vote was taken, that Justice Department attorneys had instructed Broward Health to make no public comments until the case is concluded. Citing the government’s muzzle, Broward Health president and chief executive Dr. Nabil El Sanadi, hired in December, and new in-house general counsel Lynn Barrett, hired last month, declined to comment.

The investigation surfaced in May 2011 when U.S. Department of Health and Human Services agents subpoenaed Broward Health records about the public healthcare system’s connections to more than two dozen doctors, including medical directors at Broward Health’s lucrative orthopedic, sports medicine and cardiology practices.

Millions of documents were ultimately turned over.

Details of the government’s case against Broward Health, the county’s largest provider of healthcare services, remain largely secret.

A WHISTLEBLOWER IN THE BACKGROUND

But the investigation and subpoena are known to stem from a complaint brought by an unidentified whistleblower. Private individuals with knowledge of fraud against the government can blow the whistle, and seek a reward of up to 25 percent of whatever the government recovers, by filing a lawsuit under the federal False Claims Act.

The person who filed the suit is called a relator. If the government accepts Broward Health’s settlement, the relator could collect a reward of up to $17 million.

Such lawsuits are initially kept sealed to allow the Department of Justice time to investigate and decide whether to help prosecute the lawsuit. If the settlement offer is accepted, and a judge approves it, the case is unsealed and further details become public.

Leading Broward Health’s defense are False Claims Act specialists Linda Baumann and D. Jacques Smith, of the Washington, D.C. office of the Arent Fox law firm. Baumann attended Thurday’s meeting. Smith participated by phone.

Baumann is also an expert regarding a pair of other laws that records show figure prominently in the Broward Health case: the federal Stark Law and the Anti-Kickback Statute.

The Stark Law generally prohibits doctors from referring Medicare or Medicaid patients to hospitals with which they have a financial relationship. Likewise, it forbids hospitals from submitting claims from prohibited referrals. Violators face stiff civil penalties.

The Anti-Kickback statute forbids offering, paying or soliciting or receiving anything of value to induce or reward referrals or generate federal healthcare program business. Criminal violators face up to five years in prison and a $25,000 fine for each violation.

If its settlement offer is accepted, Broward Health would become the second large hospital system in Florida in recent years to pay big for having improper financial relationships with its physicians. Last year, the Halifax Hospital Medical Center and Halifax Staffing in Daytona Beach agreed to pay $85 million to resolve allegations they submitted Medicare claims that violated the Stark Law’s self-referral rules.

On Thursday, Broward Health’s commissioners also authorized El Sanadi to enter into any integrity agreement that might be required by the government to close the deal.

Whether or not the government accepts the settlement offer, however, the investigation has already had a substantial impact on the district’s business practices.

For example, last year the governing board approved a new compensation scheme that seeks to make its physician compensation practices “commercially reasonable.”

More than a dozen Broward Health doctors have signed agreements under the new rules intended to assure compensation based on “fair market value.” One of those doctors who took a substantial pay cut was Michael A. Chizner, chief medical director of Broward Health’s Heart Center of Excellence.

The district, whose flagship facility is Fort Lauderdale’s Broward Health Medical Center, is the medical safety net providing services regardless of the ability to pay for the northern two-thirds of the county.

Feds in South Florida investigating allegations Humana overcharged Medicare Advantage

By Fred Schulte, Center for Public Integrity 

The entrance to Humana headquarters in Louisville, Kentucky

The entrance to Humana headquarters in Louisville, Kentucky

Giant health insurer Humana Inc. faces multiple federal investigations into allegations that it overbilled the government for treating elderly patients enrolled in its Medicare Advantage plans, court records reveal.

The status of the investigations is not clear, but they apparently involve several branches of the Justice Department. The U.S. Attorney’s Office in Miami wrote in a court document filed in March that officials expect that at least one of the probes will be completed and the findings made public “in the next few months.” (more…)

Newsletter

Notify me by email when new stories are published.