Healthcare Fraud: Waller, 11 Others Convicted

HOUSTON – The grimy truth behind the health care industry has been laid bare as a federal jury has convicted 12 individuals, including Cheryl Waller, in a massive Medicare kickback conspiracy. Waller, 70, of Houston, was found guilty of conspiracy to pay and receive kickbacks.

The other 11 defendants, all with ties to Continuum Healthcare LLC or its various entities, had previously pled guilty for their roles in the scheme. David Edson, 68, and Jeffery Parsons, 57, both vice presidents at Continuum, admitted to conspiracy charges and money laundering, while Aretha Johnson, 64, and Inger Michelle Pace, 54, were convicted of conspiracy and money laundering as well.

During the trial, it was revealed that Continuum owned three mental health centers in Houston, which operated partial hospitalization programs (PHPs). These PHPs were supposed to provide intensive treatment for mental illness patients. However, the jury heard evidence that many referred patients did not qualify for these services. Waller, for instance, was paid $132,000 by Continuum to send her residents to their PHP.

Edson and Parsons were responsible for implementing the kickback programs and admitted to paying other defendants to bring patients to Continuum. They also acknowledged causing Continuum to fraudulently bill Medicare $50.5 million. The total amount of payments made to co-defendants ranged from $498,000 to $2.6 million.

The trial was presided over by U.S. District Judge Gray Miller, who has set sentencing for June 16, 2017. Each defendant faces up to five years in prison and a fine of $250,000 for the conspiracy charge. Pace and Turner also face additional charges.