Feds say nursing home execs used $16M fraud scheme to fund extravagant lifestyles

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Four men, including two former executives with a large Indiana-based nursing home chain, were indicted last week in a $16 million fraud and kickback scheme, with the proceeds allegedly used to pay for luxuries including expensive vacation properties, use of a private plane and bars of gold.

James Burkhart, former CEO of American Senior Communities (ASC) and Daniel Benson, former chief operating officer of the company, along with associate Steven Ganote and Burkhart’s brother Joshua Burkhart, were charged in a 32-count indictment with one count of conspiracy to commit mail, wire and healthcare fraud. They also were charged with multiple other counts of mail and wire fraud along with money laundering, according to U.S. Attorney Josh J. Minkler of the Southern District of Indiana.

ASC manages the daily operations of about 70 senior care facilities on behalf of the Health & Hospital Corporation of Marion County, according to Minkler’s announcement.

Minkler described schemes occurring between January 2009 and September 2015 in which the four allegedly had vendors overcharge for their services--including $2.3 million for a landscaper and $3.7 million for an electrical contractor--then shared the overpayments among themselves and the vendors through a series of shell companies. Many of the payments were reimbursed by Medicare and Medicaid. Other schemes involved food and medical supplies, patient lifts, office supplies, patient discharge packages, American flags and T-shirts for an Alzheimer’s walk.

The illegal proceeds allegedly paid for lakefront real estate in Indiana and a beach home in Florida, diamond jewelry and Rolex watches, gold bullion and coins, gambling chips at a Las Vegas casino, private plane trips and even political contributions, according to the announcement.

"Nothing was off the table for these four individuals,” Minkler said, according to the Indianapolis Star. He also accused them of “unbridled greed.”

Still, the alleged $16 million scheme was dwarfed by the recent $1 billion scheme in which prosecutors accused three individuals of funneling patients among various Miami healthcare facilities in order to bill Medicare and Medicaid for medically unnecessary services.