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FraudBlawg 
Whistleblower charges stimulus fraud
By J. LOUISE LARSON news1@kilgorenewsherald.com
When finding enough people eligible and willing to participate in a government program paid for with stimulus funding proved a problem, one large government contractor bent the rules, a whistleblower suit filed in state district court last week alleges.
News of the lawsuit filed in Smith County’s 241st State District Court was first published here Saturday.
A woman who previously worked for Arbor Res-Care, identified here as “Rose,” talked about issues at the heart of a lawsuit filed by Mary Shannon Rocha in lengthy interviews with the News Herald recently.
THE CONTRACTOR
Kentucky-based Res-Care is publicly held, and the nation’s largest single contractor of workforce services. A billion-dollar company with operations in seven countries, including the U.S., according to its Web site, Res- Care has 40,000 employees in the U.S., Canada and Puerto Rico.
“Arbor’s a big player nationally, I’ll tell you that,” said ETCOG executive director David Cleveland.
Through Workforce Solutions, what most job-seekers think of as the local face of the Texas Workforce Commission, Res-Care operates workforce centers in ETCOG’s 14 counties.
In East Texas alone, the company holds ETCOG contracts worth somewhere in the ballpark of $25 million.
In Texas, the company’s subsidiary, Arbor Education and Training contracts to 11 of the state’s 28 workforce boards for either workforce center services, child care or youth services.
THE PROGRAM
According to ETCOG communications manager Lindsay Vanderbilt, CCDF stands for Child Care and Development Funds – funds the Board receives every year to enroll eligible families in the Child Care program.
Families receiving subsidized day care through CCDF must be employed or in vocational training 25 hours per week, or enrolled in college 9 semester hours.
“ARRA Child Care funds are also utilized to enroll eligible families in the Child Care program. However, ARRA funds allow participants to be unemployed and in a job search for up to eight weeks. Participants must meet job search activity requirements. The Job Search program requires individuals to search for a job five hours a day, five days a week, and provide documentation to back it up,” Vanderbilt said.
(ARRA stands for American Recovery and Reinvestment Act of 2009 – federal stimulus money, in other words. As a state, Texas was granted $214.9 million in ARRA Child Care Funding, which must be spent by June 2011.)
Child Care and Development Funds are allocated to Texas from the U.S. Department of Health and Human Services every year for lowincome subsidized child care.
“The ARRA program also allows for existing CCDF participants whose employers reduce their hours to between 20 and 25 hours to receive Child Care assistance. ARRA funds unemployed participants, as well as employed participants meeting eligibility,” she said.
There is some leeway for movement between funding streams, she said. All ARRA child care funds must be fully expended by June 30, 2011, as these are temporary stimulus funds. As ARRA funds near their close on or before June 30, 2011, Workforce Solutions East Texas will begin to transfer as many ARRA-funded parents as possible to CCDF to continue to receive child care services, Vanderbilt said.
The issue is complex, said TWC’s Givens.
“In 2009, Texas also received ARRA funds for child care and the eligibility is more flexible for ARRA, for example, child care can be paid through ARRA funds for those on unemployment for the time they are searching for work up to five hours a day, five days a week. The financial reporting still must be done according to the source of the funding, so the boards have to let us know about the spending from regular CCDF and then report on the ARRA funds. It is acceptable for a board to pay a portion of the childcare with CCDF and a portion with ARRA. That is allowable,” Givens said.
TWC takes it seriously of a necessity, as it’s the state agency that reports back to Uncle Sam.
“TWC is responsible to report performance to the U.S. Department of Labor. Neither the East Texas Council of Governments or Workforce Solutions East Texas does federal reporting.
“TWC monitors the spending of the ARRA money through the same oversight procedures TWC uses to monitor the other federal funding streams,” Givens said.
THE PROBLEM
The ARRA-funded program to provide childcare to qualified unemployed or recently under-employed individuals presented some unique problems.
“In order to keep the funding, the project manager had to have a certain number (of participants) funded through ARRA so money wasn’t de-allocated. We knew that we weren’t even going to touch a drop in the bucket of that money if we were going to follow the rules,” Rose said.
“We made a push to try to find people – we were aggressively looking for people who qualified. We found out quickly we weren’t going to have many,” Rose recalled.
“The reality was the group (of parents receiving childcare assistance) didn’t want to have 25 contacts a week or sit in a Workforce center in order to have their child in day care,” she said.
“It didn’t take but a month for us to realize we weren’t going to spend this money.”
The mandate was in: get the numbers up.
In spring 2010, the Texas Workforce Commission would later send a letter of intent to sanction ETCOG for failing to oversee Arbor/ Res-Care, citing low numbers.
According to TWC spokeswoman Lisa Givens, “when Workforce Solutions East Texas has not met its performance
measures, TWC and Workforce Solutions East Texas works together on a Corrective Action Plan. The board is meeting those expectations.”
Rose said the problem came to public notice when Res-Care was asked to account for the stimulus money but could not account for why the money was spent but so few people were eligible.
Rocha’s suit says caseworkers were told to move CCDF-qualified candidates to ARRA funding, and to file paperwork saying the children were ARRA-eligible when they in fact were not.
“Basically, Arbor/Res-Care decided they could commingle in fund code 030 (ARRA) all the ARRA clients and the CCDF clients (Child Care Development Fund, Welfare Reform Act),” Rose charged, citing an official letter of understanding she said was signed in January of 2010 by all agencies involved in the funding of such stimulus programs – the WD 15- 09 form.
“They have to sign that that they don’t commingle funds … but that’s exactly what they were doing. They had to sign that they don’t make false statements .. They were having every co-worker do that,” she said.
The numbers were then reported weekly to the government via a report that went to ETCOG’s Workforce Development Board members on Tuesdays.
Rose said the Arbor/Res- Care child care services director told company caseworkers in a staff meeting in December to start placing every client into the ARRA pot, with the exception of individuals in the Choice, CPS, teen parents and transitional programs, Rose said.
“They were having case workers put themselves on the line, having them say people were ARRA (qualified),” she said.
“She was having them put them in the ARRA column, even though they weren’t ARRA eligible… and taking them to the board in a weekly activity report and saying this is how many we’re putting in ARRA, but none of those people were eligible for ARRA,” Rose recalled.
In January, Rose said, the project manager told caseworkers to start funding everybody in Code 030 – income eligible and college students – to dump them over to the ARRA fund.
Around that time in January, Rose said, the Arbor/Res-Care project director came to her cubicle to tell Rose directly to put the 36 families she put “into care” into the ARRA pot, even though they didn’t qualify for ARRA. She refused, Rose said.
Tyler resident Benson Kioko was a project accountant for Arbor Res-care. In an interview in June, he agreed with Rose’s perspective.
“They were moving funds – they were using ARRA money to pay for things they were not supposed to pay for … They were trying to play with numbers to keep units to meet their budget targets,” Kioko said.
“I think they were trying to make numbers, trying to cover up to make numbers… what it amounts to is more like a fraud, really. They were having some difficulties financially, and trying to do whatever they can to meet numbers and to keep the contract with ETCOG.”
Kioko said that in his opinion, the problem was that an Arbor/Res-Care project manager didn’t have enough experience to understand the rules and regulations.
Arbor/Res-Care spokeswoman Nel Taylor said last week the agency’s policy is not to comment publicly on matters involving pending litigation.
The lawsuit against Good Samaritan Hospice is the result of a qui tam filed by myself and another former employee. This lawsuit has been ongoing for three and a half years. This lawsuit destroyed my career and in turn my livelihood. It has also at times destroyed my spirit. But I would do it all over again if I had to. I have worked in the medical field for over 22 years in the accounting side and I have seen some very bad things. I am so sick of people like this getting away with it and I just could not in good conscience sit by and let these people get away with these things. These type of people have no souls. It’s always about the almighty dollar. Randy Gist was also a retired police officer of 25 years. This fueled his arrogance of ever being caught. However, Gist was not acting alone. A local physician, Raj Boorgu, was 50 percent owner of GSH. How this man has managed to keep his name out of it thus far alludes me. He was the brains behind this whole operation. No charges have been filed against him to date. To this day Dr. Boorgu continues to make lots of money from the very people he defrauded millions from. Medicare is his primary payor. Not to mention his practice has a new $1,000,000.00 facility bought with Medicare Money on property he purchased from his very own company, Good Samaritan Hospice.
Another thing that has got my gut pinched is the supposed amount of money they defrauded, $3,000,000.00. I was the billing director and I know this amount is grossly inaccurate. That amount covers about four patients only that they overbilled medicare. I know for a fact that the dollar amount is much much more than that. They billed for a higher level of care than provided for all the patients who were in a nursing home, assisted living and in-patient hospital stays. This is the government’s main focal point of the investigation. But that was certainly not all they were guilty of doing. Here are other ways they were committing fraud:
!. Admitted inappropriate patients. At the time I quit they started admitting ALL referrals regardless of appropriation. They had meetings with all the marketers and admission nurses which they ordered to do all the admissions. They said to admit, monitor the patients for 90 days, then begin the 30 days discharge process. Doing it this way was so they could collect up to 80% of each patients Medicare Cap and it would also help even out the long term patients.
2. Satellite offices. One satellite office was opened in Madison, AL. Initially this facility was going to be independent and not a satellite office. I submitted the Palmetto Forms requesting a provider number. I submitted and received provider numbers for NPI, AL Medicaid, AL Blue Cross, etc. Our Medicare number was pending due to the state certification. For some reason, the office was closed, but the office space continued being rented and the name Good Samaritan Hospice remained on the building and doors. For a year no one worked in the Madison Office. However, the patients were retained and Medicare was paying us. How was this possible? Because Gist and Boorgu decided to bill the patients thru the Florence office provider number as if they were patients at the Florence location. Once we got the Madison office back up running again and received its Medicare Provider Number, then we would back out the charges on the Florence provider number and redo the billing with the correct numbers. I quit before the Medicare provider number for Madison was issued. Rumor has it that they never received the provider number because they did not pass the state survey. To my knowledge, no charges have ever been backed out of the Medicare, Medicaid nor Blue Cross systems.
3. Unlicensed facilities. Yes that’s right, they opened and operated an illegal facility in Haleyville, AL. They did not have an Alabama State License. In fact they never even notified the State of Alabama of its existence. The facility never had a state certification nor a state survey. The facility was called Good Samaritan Hospice of Haleyville, however like the Madison office it was meant to be an independent entity. Indeed even the ownership was shared between Gist, Boorgu and eight other physicians in the Haleyville region. The goal was for monopolization of that area as well as surrounding areas for Hopice Care. In all there were eleven different owners. Dr. Boorgu and Randy Gist schemed against the other owners by telling them that Medicare approved the Certificate of Need, the Facility had its State License, and the provider numbers were pending. Of course all of this was untrue. They admitted hundreds of patients to the new Haleyville Office. As the Madison patients, it was all being billed using the Florence Office provider number. A lot of money came from the Halleyville patients. A lot!!! After I quit, I spoke to one of the physicians who was co-owner and informed him they were operating an illegal facility, one without a state license, and that Dr. Boorgu and Randy had been collecting money on the patients from the time the first patients were admitted. That doctor now has his own lawsuit pending against GSH and its owners, Dr. Boorgu and Randy Gist. The facility operated for about a year. I had quit when it was not long been opened. It was as well, another main reason I quit. Their arrogance has no bounds. Their audacity no limits. After I had quit, they became fearful that I might notify state, so they brought all of the medical records and hid them in the Florence Office. They also held a mandatory meeting with all the employees, where they were all told that if state came in and asked about Haleyville, they were to tell them that it was ‘just a place we store supplies’.
I could go on and on about these people. but you can not begin to imagine how tired I am. What I want everyone to know is that we did not file this lawsuit for monetary gain. While it would be nice, it doesn’t matter if I did not make a dollar on it. But I do believe they owe me something. Something they cannot give me…..the time lost, the pride and dignity they stole from me, the embarrassment taken away for being a part of GSH, the time lost with my children, give back the home I had when this began because I lost it and three other homes due to my career being ruined and them smearing my good name, the pain it has caused my babies, to this day they are still worried someone will shoot me or them or all of us, they ruined my credit, reimburse me emotional distress because I have had two nervous break- downs since this fight began, take away the pain, anger and hatred you have caused, reinstate my pride. There is no amount of money that can be awarded that will ever undo all the damage this has done to me, my babies, and the other former employees I befriended there. What I hoped to come out of this lawsuit was attention. Not attention for myself but attention to this chronic problem. The general public has a right to know that these things go on every day. And in my prediction, 40% of medical facilities commit intentional Medicare and other insurance fraud. Also in my own prediction, 70% of all medical facilities commit unintentional Medicare Fraud. Once I realized the truth, I attempted to try to persuade them to self-disclose. When they continually refused and things worsened, I quit and reported them for fraud.
You can email me at [REDACTED]
Keep up the fight!!!
Dear dkholt
My case is about 18 month old now and Res-care just made a motion for summary judgement which will hopefully be denied but it is just another delay tactic. I’m sorry you have had such a bad time of it. I’m older and my children were grown when this started for me and I stayed until Res-care terminated me 1 day after I reported my concerns. I was employed as a case manager with them for 6 years. I saw it coming and tried to prepare and even though my husband and I have depleted our savings and live in survival mode we are lucky to have each other and good representation. I was unemployed for 56 weeks but Texas found againest Arbor/Res-care and awarded me unemployment for that entire period. I now have employment that pays less but I have no fear of retaliation or being asked to do something unethical or illegal. My new employer appreciates my attention to detail and I am thankful everyday for the chance to contribute. I pray God grants you the peace of knowing few can stay the course and walk the road less travelled.
Shanon Rocha
You have forgotten the 2 most important Pioneer Whistleblowers of all who used 31 U.S.C. 3729-3733 to win the first Qui Tam cases after the Oct. 27, 1986 amendment John Gravitt who filed the first Qui Tam Case and Roland Gibeault who actually was the first person to sucessfully win a Qui Tam Case both criminally and civilly since President Lincoln enacted The False Claims Act March 17, 1863 during the height of the Civil War.