Two former executives of the nursing home chain, American Senior Communities ("ASC" or the "Company"), James Burkhart ("Burkhart") and Daniel Benson ("Benson"), are facing charges for defrauding Medicare, Medicaid, and their own company. The two former executives were having vendors overcharge the company for services, some of which the government paid for, and had vendors pay the excess funds to them directly, equating to an estimated $16 million in overcharges. Both men face charges for conspiracy to commit mail, wire and health care fraud, mail or wire fraud, money laundering, and conspiracy to violate the Anti-Kickback Statute.
The men are alleged to have received kickbacks through deals with vendors, without the company's knowledge, which involved payments to over 20 shell companies from which Burkhart and Benson could directly receive the funds. The shell companies were paid by the nursing home company for services they never provided, such as for consulting or providing food, and were used to harbor the kickbacks from vendors who overcharged the company. The vendors included companies that managed landscaping, medical supplies, therapy, and other areas where ASC hired outside contractors. The excess money was used by Burkhart and Benson to purchase land, jewelry, gold, and planes, and was sometimes split with the vendors. If vendors questioned or chose not to be involved in the scheme, then Burkhart and Benson would seek new vendors who were willing to participate.
The Department of Justice stated that these two men took advantage of the health-care system as well as the sick and elderly citizens who rely on it. Burkhart was fired, after his home was raided by the FBI, and Benson left the company soon after.
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Source: Kass, Dani. "Ex-Nursing Home Execs Indicted In $16M Kickback Scheme." Law360. Portfolio Media, Inc. 12 Oct. 2016. Web.