Lorie Monroe, 51, of Richmond, Virginia, was sentenced yesterday to 37 months in prison, followed by 3 years of supervised release, for conspiracy to receive health care kickbacks, in violation of Title 18, United States Code, Section 371. In addition, Monroe was ordered to pay $545,410.00 in restitution to the Virginia Department of Medical Assistance Services.

The sentence was imposed by United States District Judge Henry E. Hudson. On January 24, 2012, Monroe waived indictment and pled guilty to a one-count information alleging conspiracy to receive health care kickbacks.

The underlying criminal statute that Monroe has been accused of conspiring to commit is 42 U.S.C. § 1320a-7b(b)(1)(A). The statute makes it illegal for a person to solicit or receive kickbacks and other remunerations in return for referring an individual to a person for furnishing or arranging services under a Federal health care program.

According to court documents, Monroe was the owner and operator of Creed Xtreme Marketing Concepts, a.k.a Creed Extreme Marketing (“Creed”), a company located in Glen Allen, Virginia. Sometime prior to December 2008, Monroe and “Individual A” agreed that Creed would serve as a marketing company for “Company 1.” It is not clear who initiated the alleged agreement, but Monroe’s plea indicates that she did not solicit kickbacks but was merely the recipient.

Individual A is the CEO of Company 1. Company 1 was an IIH provider located in the Eastern District of Virginia, which was under contract with Medicaid to provide Intensive In-Home Therapy (IIH) services. IIH services are designed to assist those youth and adolescents who are at risk of being removed from their homes, or are being returned to their homes after removal, because of a significant mental health, behavioral, or emotional issues. Allegedly, Monroe and Individual A verbally agreed that Monroe would receive approximately half of the Medicaid payments for each child Monroe referred to Company 1 for IIH services.

On or about December 2008, Monroe allegedly hired two employees to canvass low income areas, specifically Section 8 housing and subsidized housing projects, in the greater Richmond and Petersburg, Virginia, areas, to find children who were Medicaid beneficiaries to refer to Company 1. Court documents further allege that Company 1 contacted the individuals recruited by Creed, then enrolled many of these Medicaid-eligible children in its IIH program and billed Medicaid for IIH services rendered. Between December 2008 and January 2010, Company 1 allegedly paid Monroe a total of $545,410.00 in kickbacks for recruiting beneficiaries for IIH services.

The court documents do not identify Individual A or Company 1 by name. There may be several reasons for this, but most likely, the government is still building their case against the two and has not issued an indictment as of yet. Monroe’s plea agreement further supports this theory, as part of the plea discusses Monroe’s continued cooperation in the form of potential grand jury testimony, participation in government debriefings, producing documents related to criminal activity, and the inclusion of the possibility of a 5K1.1 and Rule 35(b) downward departure during sentencing.

The author of this blog is Erich Ferrari, an attorney specializing in Federal Criminal Defense matters. If you have any questions please contact him at 202-280-6370 or ferrari@ferrari-legal.com.

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