Dallas officials arrest 28 linked to 'sprawling' workers compensation fraud scam

Twenty-eight people, including a federal claims examiner, have been arrested in Dallas for allegedly participating in what authorities are calling a "sprawling" healthcare fraud scheme involving workers compensation claims.

All 28 people, including four medical professionals, have agreed to plead guilty, according to an announcement from the U.S. Attorney's Office for the Northern District of Texas. The two year investigation involved postal workers and Veterans Affairs (VA) employees who claimed to have suffered injuries on the job that prevented them from working.

Two medical professionals, Larry Washington, who is a licensed professional counselor, and Dr. Robert Mandell, who is a licensed psychologist, owned various healthcare businesses in Dallas and allegedly kick-started a scheme in which Washington recruited patients that were former postal and VA employees who had suffered work-related injuries, although those injuries were not severe enough to warrant workers compensation payments. Washington billed the Office of Workers Compensation Programs for his services, even during times when he was traveling or in the hospital for his own medical treatment.

Mandell is accused of writing up fraudulent psychological reports, which were "critical to the scheme" according to prosecutors, and Perry Rowell, a senior claims examiner at the OWCP accepted $24,000 in cash bribes from a former Department of Labor claims examiner who was assisting the "injured" claimants.

Last December, postal workers in Maryland, Oregon and California were caught collecting thousands in fraudulent disability and workers compensation payments, and the Office of Inspector General was investigating hundreds of other cases. Weeks before that story, legislators pushed to pass the Stop Disability Fraud Act, which was aimed at expanding the Social Security Administration's fraud investigation units to prevent physician-assisted fraud.

To learn more:
- read the U.S. Attorney's announcement

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