13 in Area Health Care Charged in FBI 'Takedown'

It is the largest health care fraud crackdown in U.S. history, according to U.S. Attorney General Eric Holder. More than 100 people are accused of bilking more than $200 million from Medicare.

In Chicago, at least 13 individuals in the health care industry, including Lincolnwood and Morton Grove residents, and employees of a shuttered Lincolnwood home health agency, are facing charges ranging from fraud to falsification of documents.

The charges came after the FBI took into custody a Chicago-area doctor, two chiropractors, three nurses,  a pharmacist, and several home health staff on Thursday. They are among 111 defendants from nine cities--including Chicago, Miami, Detroit and Dallas--arrested in the sweep over illegal Medicare billings that added up to more than $225 million.

“With this takedown, we have identified and shut down large-scale fraud schemes operating throughout the country," Holder said in a release.

"We have safeguarded precious taxpayer dollars. And we have helped to protect our nation's most essential health care programs, Medicare and Medicaid,” he added.

The Chicago-area suspects are also accused of offering or soliciting kickbacks in exchange for referrals of Medicare patients. 

While several sources confirmed that eight of them are originally from the Philippines, it is not clear whether they are U.S. citizens or not.

One of those arrested is Alona Dizon Bugayong, 35, of Lincolnwood. She was arrested Thursday and appeared before U.S. Magistrate Judge Jeffrey Cole in Chicago. 

Bugayong allegedly "devised a scheme" with Han Woo, 35, of Hoffman Estates, "to pay kickbacks in exchange for physician referrals of home health care patients," according to Holder.

Woo operates New Covenant Home Health Agency in Villa Park and Healthquest Homecare in Des Plaines. Both businesses were mentioned in the FBI's charge sheet.  

A Healthquest representative pleaded for "privacy" in refusing to be interviewed.

Elsewhere, five individuals from Goodwill Home Healthcare are facing "criminal complaints" for "conspiracy to violate federal anti-kickback statute." They are accused of agreeing to offer, pay, solicit or receive kickbacks for the referral of Medicare patients.

Marilyn Maravilla, 54, of Chicago; Junjee Arroyo, 42, of Elmurst; Ferdinand Echavia, 37, of Chicago; Kennedy Lomillo, 43, of Mundelein; and Baltazar Alberto, 47, of Morton Grove, were named as defendants. They were also arrested Thursday.

Goodwill's Medicare billings raised suspicions when it nearly quadrupled over two years, going from $679,596 in 2008 to $2.7 million in 2010. 

 According to records seized by the FBI, an estimated $410,998 in kickbacks were paid to 28 people who had referred 912 patients.

Goodwill's last address was 7161 N. Cicero Ave., Suite 2, in Lincolnwood. A check inside the building at the corner of Cicero and Estes avenues revealed that it was no longer a tenant. 

Also arrested were Virgilio and Merigrace Orillo of Chalice Home Healthcare, which has offices in Chicago, Freeport and Morris. They reportedly falsified documents to increase payments received from Medicare by making "patients appear to be sicker than they actually were," according to the release.

Charged separately with one count of fraud are Drs. Jaswinder Rai Chhibber, 48, and Andrew Carr, 41. Chhibber of Schaumburg serves as president and owner of the Cottage Grove Community Medical Clinic in Chicago and Carr is licensed chiropractor from Lake in the Hills.

Two counts of health care fraud were filed against pharmacist Jay Hammermann, 62, and Brandy Howard, 35, of Naperville. 

Each count of health care fraud carries a maximum penalty of 10 years in prison and a $250,000 fine.

A medical services company, U.S. Occupational Health, which performs physical and medical tests for private and government employees, is charged with one count of mail fraud.

Kimberly Nerheim of the FBI said the investigation is ongoing. The probes are being lead by the special HEAT Strike Force, formed by U.S. Attorney Patrick Fitzgerald, to investigate fraud. 

“Paying for Medicare and Medicaid patients is a crime," said Fitzgerald, who prosecuted former Illinois governors George Ryan and Rod Blagojevich. "We are focusing our resources on making sure that those who offer or solicit kickbacks are held accountable by the criminal justice system.”

There are more than 1.3 million licensed Medicare suppliers nationwide, with 18,000 new applications every month, according to news reports. So enforcement and investigation of suspicious agencies are daunting tasks.

It is a problem that the Obama administration is trying to address. U.S. Health and Human Services Secretary Kathleen Sebelius said the raids were part of the president's effort to save tax dollars.  

"From 2008 to 2010, every dollar the federal government spent under its Health Care Fraud and Abuse Control programs averaged a return on investment of $6.80,” said Sebelius, adding that $4 billion was recovered in 2010.