Shelby Woman Pleads Guilty to Defrauding Medicaid of $8 Million, Aggravated Identity Theft, and Tax Fraud

CHARLOTTE—A Shelby, North Carolina woman pleaded guilty today for her involvement in a health care fraud scheme that defrauded Medicaid of $8 million for sham mental and behavioral health services, announced Anne M Tompkins, United States Attorney for the Western District of North Carolina. In addition to defrauding Medicaid, Victoria Finney Brewton, 37, also pleaded guilty to stealing a therapist’s identity to commit the fraud and to filing a false tax return. United States Attorney Tompkins is joined in making today’s announcement by North Carolina Attorney General Roy Cooper, who oversees the North Carolina Medicaid Investigations Division (MID); Roger A Coe, Acting Special Agent in Charge of the FBI, Charlotte Division; Jeannine A Hammett, Special Agent in Charge of the Internal Revenue Service, Criminal Investigation Division (IRS-CI); and Derrick Jackson, Special Agent in Charge, Department of Health and Human Services, Office of the Inspector General (HHS-OIG), Office of Investigations, Atlanta Region. Brewton pleaded guilty today before United States Magistrate Judge David Keesler to seven counts of health care fraud and health care fraud conspiracy, one count of aggravated identity theft, and one count of filing a false tax return.

At today’s plea hearing, the defendant admitted that from 2008 to 2012, Brewton, her co-defendant Linda Radeker, also of Shelby, and others submitted in excess of $8 million in false claims to Medicaid. According to filed court documents and statements made in court, Brewton operated a series of after-school and summer childcare programs in Shelby. Brewton recruited juvenile Medicaid recipients to her childcare programs by promising that the program would be free for Medicaid recipients. After Brewton obtained the children’s and families’ Medicaid recipient numbers, she used this information to fraudulently bill Medicaid for mental and behavioral health services that were never provided.

According to the criminal information, Brewton was not licensed or qualified to provide mental and behavioral health services, and she was not approved by Medicaid. Instead, Brewton enlisted the assistance of other complicit Medicaid-approved providers, such as Linda Radeker and, in other instances, stole the identity of Medicaid-approved providers in order to accomplish the fraud. Court documents indicate that Brewton conspired with Radeker, a licensed professional counselor enrolled with North Carolina Medicaid, to submit claims to Medicaid making it appear that Radeker had provided the claimed mental and behavioral health services when, in fact, Radeker did not provide any of the services. Radeker and Brewton then split the Medicaid payments 50/50 for these false claims.

Filed documents also indicate that Brewton hired licensed therapist KS.M. in October 2010 to provide services at Brewton’s company, Healing Hearts. Although KS.M. provided some mental and behavioral health services while she worked at Healing Hearts, Brewton submitted false and fraudulent claims to Medicaid through KS.M.’s Medicaid provider number far in excess of the services actually provided by KS.M.

In or about October 2011, KS.M. left Healing Hearts after learning that Brewton had submitted false claims through KS.M.’s Medicaid provider number. Thereafter, Brewton misappropriated KS.M.’s identity, specifically her Medicaid provider number, in order to continue to submit fraudulent claims to Medicaid after KS.M. was no longer employed at Healing Hearts.

Specifically, the defendant admitted that on or about October 27, 2011, Brewton submitted an Electronic Funds Transfer Authorization Agreement to Medicaid directing that reimbursements for claims submitted through KS.M.’s provider numbers be deposited into a bank account held and controlled by Brewton. From in or about April 2011 to May 2012, Brewton submitted in excess of $1.8 million in false claims through KS.M.’s provider number which KS.M. did not provide. According to court documents, Brewton also misused the Medicaid provider numbers of other therapists employed by her companies in order to submit false claims to Medicaid through their numbers.

As part of her plea, Brewton also admitted that she defrauded the United States by filing a false tax return for the year 2009 that intentionally failed to report the income Brewton received from her scheme to defraud Medicaid. She also failed to file tax returns for 2010 and 2011, which further masked the income from her fraud scheme. Brewton agreed to forfeit a 2005 Dodge Magnum which was seized as the proceeds of fraud during the investigation. Brewton, who was released on bond, faces a mandatory two years in prison consecutive to any other term of imprisonment and a $250,000 fine for the aggravated identity theft charge, a maximum term of 10 years in prison, and a $250,000 fine for the health care fraud charges; and a maximum term of three years in prison and a $250,000 fine for the filing of a false tax return charge.

In her plea agreement, Brewton has agreed to pay full restitution to Medicaid for any losses resulting from her criminal scheme. The final restitution amount will be determined by the court at Brewton’s sentencing hearing, which has not been scheduled yet. Radeker pleaded guilty to charges of health care conspiracy and money laundering on September 13, 2012, and is awaiting sentencing. The investigation into Brewton was handled by the FBI, MID, IRS, and HHS-OIG.

Special assistance to the task force was provided by the North Carolina Division of Medical Assistance, Program Integrity Section. The prosecution was handled by Assistant United States Attorneys Kelli Ferry and Jenny Grus Sugar of the United States Attorney’s Office in Charlotte. The investigation and charges are the work of the Western District’s joint Health Care Fraud Task Force. The task force is multi-agency team of experienced federal and state investigators, working in conjunction with criminal and civil Assistant United States Attorneys, dedicated to identifying and prosecuting those who defraud the health care system, and reducing the potential for health care fraud in the future.

The task force focuses on the coordination of cases, information sharing, identification of trends in health care fraud throughout the region, staffing of all whistleblower complaints, and the creation of investigative teams so that individual agencies may focus their unique areas of expertise on investigations. The task force builds upon existing partnerships between the agencies, and its work reflects a heightened effort to reduce fraud and recover taxpayer dollars.

Published on: 2013-01-04

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