Manhattan Chiropractor Arrested For Years-Long Health Care Fraud Scheme

 

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.

Black Market Money Remitter Pleads Guilty In Manhattan Federal Court

 

Jose Morely Chocron Laundered More Than $500,000; Admits to Operating an Unlicensed Money Transmitting Business

 Audrey Strauss, the United States Attorney for the Southern District of New York, announced that JOSE MORELY CHOCRON pled guilty today before U.S. District Judge Jed S. Rakoff to one count of money laundering.  CHOCRON laundered more than $500,000 in funds that had been represented to him to be the proceeds of a scheme to bribe Brazilian political officials, using a network and bank accounts to which he had access by virtue of his operation of an unlicensed money transmitting business.

U.S. Attorney Audrey Strauss said:  “Jose Chocron’s black-market banking was designed to facilitate tax evasion, and was used to facilitate what he thought was the bribery of a foreign official.  Unbeknownst to Chocron, the FBI had identified his network and worked quickly to dismantle it.  This Office will continue to ensure the integrity of the U.S. financial system by identifying and prosecuting shadow banking operations like Chocron’s.”  

According to the Complaint, the Indictment, and other filings in this case:

Between May 2019 and October 2019, CHOCRON, working with his co-conspirators, utilized his network of contacts and bank accounts to launder funds that had been provided to him by individuals who – unbeknownst to CHOCRON – were working for the Federal Bureau of Investigation (“FBI”).  Those individuals informed CHOCRON that the funds were the proceeds of bribes that had been paid to Brazilian public officials in order to obtain licenses and permits.  On four occasions, CHOCRON accepted cash from individuals who were working for the FBI or arranged to have the cash delivered to his associates.  He then arranged for the funds to be transferred to bank accounts specified by the FBI, minus a commission payment.

CHOCRON explained that he was able to receive large amounts of cash in the United States and arrange for those funds to be transferred to bank accounts because CHOCRON “ha[d] . . . people here that need cash.  They will transfer to you, because they don’t want to pay taxes . . .  What do I do? I give them the money and they make a transfer to me.”  He also requested a higher commission for his services than initially offered, stating “Let’s be clear, that’s laundering money.” 

CHOCRON, 61, of Spain and Venezuela, pled guilty to one count of money laundering, which carries a maximum sentence of 20 years in prison.  The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.  In connection with his guilty plea, CHOCRON also admitted that he operated an unlicensed money transmitting business, in violation of Title 18, United States Code, Section 1960.

CHOCRON is scheduled to be sentenced by Judge Rakoff on July 16, 2021, at 4:00 p.m.

Ms. Strauss praised the outstanding work of FBI New York’s Eurasian Organized Crime Task Force.

The prosecution of this case is being overseen by the Office’s Money Laundering and Transitional Criminal Enterprises Unit.  Assistant U.S. Attorneys Andrew C. Adams, Benet J. Kearney, and Sarah Mortazavi are in charge of the case.

Governor Cuomo Announces More Than 4.5 Million New Yorkers Have Received At Least One COVID Vaccine Dose

 

134,536 Doses Administered Across New York State in the Last 24 Hours

More than 1 Million Doses Administered Over Past Seven Days

Vaccine Dashboard Will Update Daily to Provide Updates on the State's Vaccine Program; Go to ny.gov/vaccinetracker

 Governor Andrew M. Cuomo today announced more than 4.5 million New Yorkers have received at least one COVID vaccine dose. 134,536 doses have been administered across New York's vast distribution network in the last 24 hours, and more than 1 million doses have been administered over the past seven days.  

"Our providers across the state are continuing to work day and night to reach all those New Yorkers who are presently eligible for the vaccine," Governor Cuomo said. "We still have a long way to go. Vaccine skepticism and barriers in making appointments and then getting to the site continue to impede many New Yorkers from getting vaccinated, and that is why we are persistent in our outreach. Millions more doses still need to be administered across the state, but because we are New York tough, we will get the job done."

New York's vast distribution network and large population of eligible individuals still far exceed the supply coming from the federal government. Due to limited supply, New Yorkers are encouraged to remain patient and are advised not to show up at vaccination sites without an appointment.

The 'Am I Eligible' screening tool has been updated for individuals with comorbidities and underlying conditions with new appointments released on a rolling basis over the next weeks. New Yorkers can use the following to show they are eligible:

• Doctor's letter, or
• Medical information evidencing comorbidity, or
• Signed certification

Vaccination program numbers below are for doses distributed and delivered to New York for the state's vaccination program, and do not include those reserved for the federal government's Long Term Care Facility program. A breakdown of the data based on numbers reported to New York State as of 11AM today is as follows.    

STATEWIDE BREAKDOWN

Total doses administered - 6,834,384

Total doses administered over past 24 hours - 134,536

Total doses administered over past 7 days - 1,036,904

Percent of New Yorkers with at least one vaccine dose - 22.9%

Percent of New Yorkers with completed vaccine series - 11.8%    

STATEMENT FROM EXECUTIVE DIRECTOR HENRY GARRIDO ON NEW YORK STATE SENATE AND ASSEMBLY ONE-HOUSE BUDGETS

 

 “At a time that stands alone in New York’s history, we need leadership that puts people first. Now is not a time to cut jobs and put families out on the street. Now is not a time to cut funding for health care and risk public hospitals New Yorkers rely on. Now is not a time cut funding for public schools just as our children are going back into the classroom.

“The one-house budgets released restore funding that the Governor’s proposed Executive Budget senselessly cut and includes billions in new tax revenue proposals that our State desperately needs. They also include an Early Retirement Incentive – something that not only shows our essential workers the respect they deserve – but would also save thousands of jobs and create a pathway to civil service careers while unemployment in New York is at a rate not seen in recent history. I thank Senate Leader Stewart-Cousins and Assembly Speaker Heastie for putting hardworking New Yorkers first.”

STATEMENT FROM MAYOR DE BLASIO ON NEW YORK STATE SENATE AND ASSEMBLY ONE-HOUSE BUDGETS

 

 Mayor Bill de Blasio today released the following statement on the New York State Senate and Assembly one-house budgets:

 

"New York City has borne the brunt of the COVID crisis in our state, and we need the resources to drive a recovery for all of us, protect public health, keep New Yorkers in their homes and reopen our schools fully. I am encouraged by the State Legislature's one-house budget resolutions, which include rental assistance for tenants and generating revenue by taxing the wealthy, while rejecting many of the Governor's ill-advised education and public health cuts. I applaud the Legislature for rejecting the Governor's proposals to subvert local control, especially over land-use and climate policies. I thank Senate Majority Leader Stewart-Cousins and Assembly Speaker Heastie for fighting for working people, and I look forward to continuing to fight for a State budget that puts our city on a path to a recovery for all of us." 

 

MANHATTAN WOMAN INDICTED FOR SHOVING COMMUTER ONTO BRONX SUBWAY TRACKS AS TRAIN APPROACHED

 

Defendant is Charged with Attempted Murder 

 Bronx District Attorney Darcel D. Clark today announced that a Manhattan woman has been indicted on Attempted Murder and additional charges for pushing a woman onto the subway tracks as a train pulled into a station in Crotona Park East. 

 District Attorney Clark said, “The defendant allegedly went up to the victim, who was waiting for a train on her way to work, and deliberately pushed her onto the tracks as a train approached. Fortunately, the victim survived this horrific, random attack.” 

 District Attorney Clark said the defendant, Luz Sanchez, 29, of 2026 Lexington Avenue, Manhattan, New York, was arraigned today on Attempted Murder in the second degree, Attempted Assault in the first degree and third-degree Assault before Bronx Supreme Court Justice Michael Gross. Bail was set at $150,000 cash/$150,000 insurance company bond/ $150,000 partially secured bond at 10 percent. The defendant is due back in court on June 9, 2021

 According to the investigation, at approximately 7:50 a.m. on February 9, 2021 on the platform of the 2/5 subway line at the Southern Boulevard and East 174th Street station, the defendant approached the victim, Rosa Elizabeth Galeas Florencio, 54, and pushed her with her body causing the victim to stumble backwards. The defendant then put both hands on the victim’s shoulder area and pushed her, causing her to fall backwards and onto the tracks as a train pulled into the station. While the victim was on the tracks screaming for help, Sanchez walked to the edge of the subway platform, looked at the victim, and then walked away. A train on the opposite track alerted the oncoming train that the victim was on the tracks and the train braked before striking her. The victim was pulled up to safety by a Good Samaritan. Galeas Florencio was treated for injuries at Saint Barnabas Hospital and was later released.

 The defendant fled to Georgia and was arrested on February 25, 2021 by the New York City Police Department Warrants Squad.

 District Attorney Clark thanked the NYPD Bronx Robbery Squad and Detective Francis Flynn for their assistance in the investigation. 

 An indictment is an accusatory instrument and not proof of a defendant’s guilt.

Attorney General James Urges Victims of Precious Metals Scheme to File A Claim Before Deadline

 

Seniors Deceived Into Investing Millions in Metals.com and Related Companies Defrauded Investors Have Through April 30 to File Claim

 New York Attorney General Letitia James today urged victims of fraud perpetrated by Metals.com and related entities to file a claim with a court appointed receiver and begin the process of recovering their defrauded funds. Last September, Attorney General James, along with 29 additional states and the U.S. Commodity Futures Trading Commission (CFTC), filed a lawsuit against Metals.com for defrauding seniors across New York and the rest of the nation — soliciting more than $185 million by peddling false claims and by charging exorbitant fees for overpriced precious metals. Earlier this month, the U.S. District Court for the Northern District of Texas entered an injunction and a restraining order, freezing the assets of the defendants and appointing a receiver to marshal the defendants’ remaining assets and issue relief to defrauded clients.

“These investors may have been sold on the comfort of investing in precious metals, but there’s no question that the defendants tarnished their clients’ dreams,” said Attorney General James. “Hundreds of seniors were promised safe investments, but, instead, saw immediate and substantial losses to their retirement savings. I encourage all New Yorkers who were defrauded by Metals.com to immediately come forward and file a claim so we can return as much money as possible to victims. Our bipartisan coalition will continue to fight to hold bad actors accountable and is standing by to help investors reclaim their defrauded funds.”

The lawsuit charges the Beverly Hills, California-based firm and its sales representatives with targeting elderly investors through traditional and social media and defrauding them into transferring funds from their traditional individual retirement accounts (IRA) into self-directed IRAs by misrepresenting that metals purchased from the defendants were a safe and conservative investment. In reality, however, the defendants charged undisclosed and excessive fees on precious metals sold to investors that resulted in instant and substantial losses, with many investors losing the majority of their investment funds immediately upon consummating the transaction. Often, the market value of the precious metals sold to investors was substantially lower than the value of the securities and other retirement savings investors had liquidated to fund their purchase of precious metals. The complaint charges the defendants with violating the Commodity Exchange Act and various state securities laws.

Following the court order earlier this month, the receiver began administering the claims process. As part of the process, the receiver will be sending correspondence, instructions, and a claim form to defrauded clients. Defrauded clients must complete and return their claims forms to the receiver to participate in the claims process and request a return of the remaining, available money. The deadline to return the claim form is April 30, 2021.

Defrauded clients should direct questions about the claims process to the receiver by emailing kelly.crawford@solidcounsel.com or by calling 214-706-4213. The receiver also maintains a website that provides information about the claims process for defrauded clients.

The receiver cautions that orders requiring repayment of funds to victims may not result in the recovery of money lost because the defendants may not have sufficient funds or assets. 

ADVOCATES PRAISE NEW EFFORT TO DECRIMINALIZE SEX WORKERS AND COMBAT HUMAN TRAFFICKING

 

 Advocates today praised Mayor de Blasio's new proposal to support sex workers and victims of human trafficking. This reform is part of the City's larger New York City Police Reform and Reinvention Collaborative draft plan. Through this initiative, the City will develop new strategies to combat trafficking while working to eliminate arrests for selling sex. 

“It’s time to decriminalize sex workers and focus our enforcement on those who exploit and profit off a broken system,” said Mayor Bill de Blasio. “We are calling on the State to end criminal penalties for sex workers and help us reach those in need without requiring involvement with the criminal justice system.”

 

"The communities hit hardest by the continued criminalization of sex work and human trafficking are overwhelmingly LGBTQ, they are people of color, and they are undocumented immigrants," said First Lady Chirlane McCray. "Sex work is a means of survival for many in these marginalized groups. Instead of handcuffs they need services, housing and support, and these reforms will enable them to come forward without fear."

 

Under this proposed reform, the City will create a State legislative frameworks for decriminalizing sex work and supporting people who are victimized by trafficking. To expand services for sex workers, the City will explore pre-arrest program models to offer community-centered services to sex workers without conducting arrest as a condition of receipt, as opposed to post-arrest diversion which relies on offering services as a condition of release from arrest or incarceration.

 

The City will also explore and refine proposals related to sex work programs and services, especially sex worker led health, employment, and safety programs. Supportive community-based services for sex workers will be expanded, including creating new partnerships outside of law enforcement by formalizing the Task Force on Health and Safety Needs of Sex workers led by the NYC Unity Project and Mayor’s Office to End Domestic and Gender Based Violence (ENDGBV).

 

The NYPD will also review policies and procedures for identifying and investigating human trafficking to develop alternative methods that focus on arresting traffickers without further criminalizing and harming those directly involved in the sex trade and to address the racialized enforcement of sex work. While arrests are driven by complaints, the vast majority of individuals arrested for prostitution-related charges continue to be Black and Hispanic. They will collaborate with other agencies to maximize their ability to arrest and prosecute traffickers and violent offenders without collateral trauma to people engaged in consensual sex work or who are victims of exploitation.

 

These efforts will build on progress made in this Administration to drastically reduce the arrests of sex workers. The NYPD, ENDGBV, the Unity Project, and other experts will support community-led officer training on identifying people who are being trafficked or exploited as well as work directly with those involved in the sex trades to develop solutions that mitigate the impact of law enforcement actions and to ensure those who want services have full and fair information and access to them.  

 

“People in the sex trades have long been marginalized, stigmatized, and criminalized in ways that are unhelpful at best and violent at worst,” said Ashe McGovern, Executive Director of the NYC Unity Project. “We are eager for the opportunity to work across the Administration and citywide with our community partners to support a Task Force that centers and prioritizes the lived experiences of sex workers and begins with the core and fundamental presumption that all people in the sex trades deserve respect, autonomy, and dignity—at work, in their daily lives, and when seeking out city services and support.”

 

“All too often sex workers are forced into the trade by violent and dangerous traffickers. The Fortune Society applauds the de Blasio administration and the NYPD for focusing on strategies that combat trafficking and hold traffickers accountable while providing critical support and protections to their vulnerable victims,” said JoAnne Page, President and CEO of the Fortune Society.

 

“Many people have to understand that there is an issue and criminalizing sex workers is not the way to go,” said Ethel Titus of Caribbean American Pride. "These steps we are taking are crucial towards ensuring that those who need it are protected.”