IRS seizure of medical records part of tax fraud investigation

The IRS seizure of a server containing medical records on 10 million Americans was part of the investigation of Chula Vista, Calif.-based Three Rivers Provider Network's founder Blaine Pollock, according to an article in Healthcare IT News.

Pollock was indicted on 13 counts of tax evasion, conspiracy and filing fraudulent tax returns. He has pleaded not guilty to all charges.

Court documents accuse Pollock of transferring millions of dollars from his companies' accounts to various domestic and offshore bank accounts to use for personal benefit. He's accused of spending $1.7 million on two yachts and $9.6 million on four homes.

The indictment also alleges that $3.2 million was deposited into various Three Rivers Provider Network accounts and maintained off the books.

The unnamed HIPAA-covered entity in Southern California sued the Internal Revenue Service last March, claiming the IRS overstepped the bounds of the search warrant federal officers executed.

Pollock's attorney, Robert E. Barnes, maintains that the Three Rivers server was taken in violation of the warrant. It reportedly contained records on every state judge in California, as well as "prominent citizens in the world of entertainment, business and government, from all walks of life."

Barnes argued that the server was like a file cabinet and the warrant didn't cover everything inside, but the government argued otherwise. The court granted U.S. attorneys' request to access the server, but through a "filter" attorney who would determine whether the data was gathered within the scope of the warrant.

A House committee in June launched an investigation of the incident and asked the IRS to explain how it complies with HIPAA policies.

The Department of Health and Human Services recently stated that the Affordable Care Act does not grant the IRS open access to Americans' medical records without cause.

"The Affordable Care Act maintains strict privacy controls to safeguard personal information.  The IRS will not have access to personal health information," HHS spokeswoman Erin Shields Britt told Kaiser Health News.

To learn more:
- find the Healthcare IT News article
- read the Kaiser Health News piece

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