Jeffrey Eugene Rose Sr., Workers Compensation Fraud, Houston TX, 2023

HOUSTON — A federal jury has convicted CEO Jeffrey Eugene Rose Sr., 54, CFO Pamela Annette Rose, 55, and VP of Operations Frankie Lee Sanders, 55, in a $9.6 million nationwide worker’s compensation fraud scheme centered on phantom physical therapy services. The three executives, tied to Houston-based Team Work Ready (TWR), were found guilty of conspiracy, health care fraud, wire fraud, and money laundering following a 16-day trial and 14 hours of deliberation.

TWR operated clinics in five states, including Federal Work Ready in Houston, Alamo Work Ready in San Antonio, and Bayou Work Ready in New Orleans, Louisiana. Under the Federal Employees Compensation Act (FECA), administered by the Department of Labor’s Office of Workers’ Compensation Programs (DOL-OWCP), the clinics submitted false claims for one-on-one physical therapy services that were never rendered. Instead, patients testified they were left to perform unsupervised exercises on treadmills, ellipticals, and even Nintendo Wii games, while unlicensed aides filled out treatment notes from a “cheat sheet” at day’s end.

The jury heard from 38 witnesses, including former patients and employees from TWR clinics. Patients described being directed to use electronic massage chairs and exercise machines despite injuries that didn’t warrant such treatments. One Houston patient said treadmill exercises made no sense for her carpal tunnel injury. A San Antonio patient reported being told to exercise both arms despite only injuring his left elbow—proof, prosecutors argued, of a systemic fraud operation.

Former employees confirmed the scheme from the inside. Therapy technicians, case managers, and even licensed chiropractors admitted they did not provide the one-on-one care documented in patient files. Staff at the Houston clinic reported seeing 30 to 60 patients daily, often leaving them unattended while staff performed other treatments in the back. Treatment notes were routinely falsified using pre-written templates to match billing requirements, not actual care delivered.

DOL-OWCP’s chief fiscal officer testified that the agency only reimburses services provided by licensed professionals and does not pay for unlicensed aides to perform therapy. Chiropractors are only considered physicians under FECA when treating spinal subluxation. Otherwise, they operate under the same billing constraints as physical therapists. Had DOL-OWCP known the services weren’t provided as billed—or by unlicensed personnel—it would not have paid the $9.6 million in fraudulent claims from four TWR clinics.

Yesterday’s verdict was followed by a forfeiture hearing where the same jury ordered the defendants to surrender $220,807 in ill-gotten gains, an annuity contract, and real property. The case was investigated by the U.S. Postal Service – Office of Inspector General and IRS Criminal Investigation, and prosecuted by the U.S. Attorney’s Office for the Southern District of Texas under U.S. Attorney Kenneth Magidson.