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Ex-CEO Convicted in $4M Medicare Kickback Scheme
A federal jury in Nashville, Tennessee has convicted former CEO John Davis, 41, of Franklin, Tennessee, of his role in an illegal kickback scheme involving approximately $4 million in tainted durable medical equipment claims to Medicare.
Davis was the former CEO of Comprehensive Pain Specialists (CPS) of Gallatin, Tennessee, and was convicted of all counts, including one count of conspiracy to defraud the United States and violate the Anti-Kickback Statute, and seven counts of violating the Anti-Kickback Statute.
The scheme, which was orchestrated by Davis and his co-conspirator Brenda Montgomery, involved the arrangement of referrals of Medicare DME orders to Montgomery’s company, CCC Medical, located in Camden, Tennessee. Evidence presented at trial showed that Davis operated a shell company called ProMed Solutions (ProMed), which he had registered in the name of his wife. Despite having no involvement with ProMed and performing no work, Davis’ wife and ProMed received over $770,000 in illegal kickbacks.
Together, Davis and Montgomery pocketed over $2.4 million dollars in improper reimbursement from Medicare. Davis used company funds from CPS to pay bonuses to CPS providers who ordered DME for Medicare beneficiaries and referred those orders to CCC Medical. Davis would receive 60 percent of the Medicare profit from those referrals, while the company he ran footed the bill.
Assistant Attorney General Brian A. Benczkowski of the Criminal Division, U.S. Attorney Don Cochran of the Middle District of Tennessee, Special Agent in Charge Derrick Jackson of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Atlanta region, and other officials announced the conviction.
The case was investigated by HHS-OIG, DCIS, Internal Revenue Service-Criminal Investigation and the Tennessee Bureau of Investigation Medicaid Fraud Control Unit and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Middle District of Tennessee. The case was prosecuted by Trial Attorney Anthony Burba of the Fraud Section and Assistant U.S. Attorney Henry Leventis of the Middle District of Tennessee.
Montgomery, who pleaded guilty in January to one count of conspiracy to defraud the United States and violate the Anti-Kickback Statute, and seven counts of violating the Anti-Kickback Statute, is currently scheduled to be sentenced on May 3, 2019.
Key Facts
- State: Tennessee
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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