Securities News

Columbia Stock Broker Pleads Guilty to Stealing $125,000 From Medicaid

Attorney General J. Joseph Curran, Jr., announced today that a Columbia stock broker has pled guilty to one count of felony Medicaid fraud for stealing $125,000 from the Maryland Medical Assistance program (Medicaid). Barry Mehta, of the 5500 block of Oakland Mills Road, entered a guilty plea before the Honorable Robert N. Dugan in Baltimore County Circuit Court for his actions while operating Family Home Center (FHC), an adult day care center located at 5550 Baltimore National Pike. FHC provided medical care and rehabilitative services to eligible Medicaid recipients from 1993 until 2000. Mehta will be sentenced on January 8, 2003. Mehta owned and operated Family Home Center from 1993 to 2000. During the seven year period that his facility was open, Mehta systematically billed the State for clients who were not actually present. The employees of FHC were required by Mehta to take client attendance on a daily basis. As part of that process, they recorded the status of each client.

Mehta instructed employees on a daily basis to add an average of two names to the list of present clients. Mehta then used the attendance sheets to complete the invoices that were sent to Medicaid for payment. One example of the fraudulent billing scheme involved a patient Suniti C., an elderly woman who was enrolled by Mehta after she began living in his house and working as her housekeeper. Suniti was occasionally absent and never attended FHC on weekends. However, Mehta instructed the witness to mark Suniti as present every day that the center was open, regardless of Suniti's presence. Medicaid billing records for Suniti reveal that FHC was paid on 101 occasions for Saturdays, and 10 more on Sundays, resulting in fraudulent proceeds to Mehta in the amount of $6,444.28.

FHC billed the Medicaid program for adult day care services provided to enrolled Medicaid recipients. In return for services provided in accordance with the relevant regulations, Medicaid would pay FHC per patient per day. That rate increased over time, but, during the time covered by the Indictment, from October 1993 to May 2000, the average amount paid per patient per day to FHC was $57.01. Medicaid regulations require that a provider bill only for services that are actually provided to eligible recipients. The amount of fraudulent billings submitted by Mehta totaled $125,000. CPM Corporation, a company controlled by Mehta and associated with his day care center, also entered a plea of guilty to felony Medicaid fraud, and was sentenced by the court to pay a penalty of $250,000.

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	Did You Know?
	Transfer Trades: Entries made upon the books of Futures Commission Merchants Transfer Trades: Entries made upon the books of Futures Commission Merchants for the purpose of: (1) transferring existing trades from one account to another within the same firm where no change in ownership is involved; (2) transferring existing trades from the books of one FCM to the books of another FCM where no change in ownership is involved. Also called Ex-Pit Transactions.