Defendant Submitted False Health Care Claims to Insurers and, After Being Flagged by One Insurer, Used the Identities of Three Per Diem Chiropractors to Continue Submitting False Claims
Audrey Strauss, United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), Jonathan D. Larsen, Special Agent in Charge of the New York Field Office of the Internal Revenue Service, Criminal Investigation (“IRS-CI”), and Thomas Licetti, New York Regional Director, U.S. Department of Labor Employee Benefits Security Administration (“DOL-EBSA”), announced today the unsealing of a complaint charging MELISSA PANAYIOTA KANES with health care fraud, money laundering, and aggravated identity theft in connection with a scheme to submit more than $800,000 in fraudulent health care claims, including by using, over the course of multiple years, the identities of three per diem chiropractors when submitting claims in an effort to hide the defendant’s association with the claims.
KANES was arrested this morning on Long Island, New York, and was presented earlier today before U.S. Magistrate Judge Sarah L. Cave.
Manhattan U.S. Attorney Audrey Strauss said: “As alleged, Melissa Kanes filed numerous fraudulent health insurance claims for her chiropractic services. Indeed, as further alleged, Kanes filed so many claims that an insurer flagged her for suspicious billing, at which point she tried to circumvent scrutiny by filing claims in the names of other chiropractors without their knowledge. Now Melissa Kanes is in custody and facing federal charges.”
FBI Assistant Director William F. Sweeney Jr. said: “As alleged, Kanes used the identities of three different chiropractors to reap more than $800,000 from fraudulent insurance claims. The crimes with which she is charged today are serious ones, which carry the possibility of a lengthy prison sentence. This case should serve as a warning to others unwilling to make adjustments to their illegal behavior – the federal criminal justice system could be just what the doctor ordered.”
IRS-CI Special Agent in Charge Jonathan D. Larsen said: “The offenses charged in this case are particularly troubling because once the fraudulent activities were detected, the defendant allegedly continued the activities using additional concealment methods. While the vast majority of health care providers are operating in good faith to take care of patient needs, it is the role of IRS CI and our law enforcement partners to bring to justice the small percentage of providers who are knowingly abusing the health care system for personal profit.”
DOL-EBSA New York Regional Director Thomas Licetti said: “This type of activity is detrimental to workers, employers and the entire healthcare system. EBSA is proud to partner with our fellow federal agencies in protecting hard-earned employee benefits.”
According to the allegations in the Complaint:[1]
MELISSA PANAYIOTA KANES, the defendant, worked as a licensed chiropractor in New York, New York.
Between 2014 and 2016, KANES submitted a high volume of insurance claims to one of the largest private health insurance companies in the country (“Insurer-1”). Insurer-1 served as the third-party claims administrator for various health plans, including a health plan covering the employees of a large consulting firm (“Victim Employer-1”). At the outset, KANES submitted the bills using companies publicly associated with her and her own identification number. But in 2016, Insurer-1 flagged KANES for improper billing and slowed or ceased payments to KANES. Thereafter, KANES continued to submit claims to Insurer-1, but took steps to hide KANES’s association with the bills. In particular, KANES submitted bills under the names and identification numbers of two newly incorporated companies (“New Company-1” and “New Company-2”), and three newly recruited per diem chiropractors (“Victim Chiropractor-1,” “Victim Chiropractor-2,” and “Victim Chiropractor-3”; together, the “Victim Chiropractors”), without the Victim Chiropractors’ knowledge or consent.
These claims to Insurer-1 – the vast majority of which related to services purportedly rendered to employees in the Manhattan office of Victim Employer-1, which was nearby KANES’s regular office in Manhattan – were false. The claims variously misrepresented the provider of the services (as one of the Victim Chiropractors), the location of the services (as somewhere other than KANES’s regular office), and which chiropractic services were in fact rendered (including whether any were rendered at all). More generally, the claims misleadingly omitted KANES’s involvement. The fraudulent claims that KANES submitted to Insurer-1 alone totaled more than $800,000.
Along with Insurer-1, KANES submitted claims to other private health insurance companies during the relevant time period. At least some set of those claims were also false. In particular, on certain dates for which KANES claimed to have provided the services billed, KANES was, in fact, traveling outside the United States.
KANES, 50, of New Hyde Park, New York, is charged with one count of health care fraud, which carries a maximum sentence of 10 years in prison, one count of money laundering, which carries a maximum sentence of 20 years in prison, and one count of aggravated identity theft, which carries a mandatory consecutive term of two years in prison. The maximum potential sentences are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant would be determined by a judge.
Ms. Strauss praised the outstanding investigative work of the FBI, IRS-CI, and DOL-EBSA.
If you believe you were a victim of this crime, including a victim entitled to restitution, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact Wendy Olsen-Clancy, the Victim Witness Coordinator at the United States Attorney’s Office for the Southern District of New York, at (866) 874-8900, or Wendy.Olsen@usdoj.gov. For additional information, go to: http://www.usdoj.gov/usao/nys/victimwitness.html.
The charges in the Complaint are merely accusations and the defendant is presumed innocent unless and until proven guilty.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth in this release constitute only allegations, and every fact described should be treated as an allegation.
