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Schuette Announces Felony Medicaid Fraud Charges Against Four Southeast Michigan Mental Healthcare Providers

Contact: Joy Yearout 517-373-8060

September 30, 2013 

 

LANSING - Attorney General Bill Schuette today announced felony charges against four licensed Southeast Michigan mental healthcare providers for their role in an elaborate Medicaid fraud scheme.

     Schuette filed criminal charges against Dr. Sandra M. Schiff, PhD, 66, of West Bloomfield; William G. Vallier, 65, of Clawson; Marceia K. Lugo, 39, of Sterling Heights; and Laura Leca, 27, of Westland. All four defendants were employed in 2012 by Adult Well-Being Services (AWBS), a Wayne County mental health provider that serves mostly Medicaid beneficiaries. Lugo and Leca are no longer employed at AWBS.

     "Health care providers who abuse trust and skirt the law at the expense of patients and taxpayers have no place in our system," said Schuette. "Michigan patients demand accountability and honesty in their providers. I’d like to thank the U.S. Department of Health and Human Services – Office of Inspector General for providing their assistance in this ongoing investigation."

     "The filing of these charges should send a strong signal to those who engage in Medicaid fraud that law enforcement is keeping a watchful eye out for these schemes," said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health and Human Services, Office of Inspector General - Chicago Region. "HHS-OIG maintains a strong relationship with our law enforcement partners in the state of Michigan and will aggressively investigate healthcare fraud at all levels to protect program beneficiaries and tax payer dollars."

Schuette Announces Felony Medicaid Fraud Charges Against Four Southeast Michigan Mental Healthcare Providers September 30, 2013 Page 2

     The charges allege that in March 2011, a healthcare provider left her employment at AWBS without completing progress notes for hundreds of encounters with mental health patients. Although Medicaid paid AWBS for all of these encounters up-front, the incomplete patient records violated Medicaid program rules. Without complete progress notes, a scheduled audit of AWBS would have revealed the deficiency and triggered a repayment demand issued to AWBS. It is alleged that Schiff, Vallier, Lugo and Leca forged the electronic signature of the former employee more than ten months after her departure, without her knowledge or consent, to create and authenticate false progress notes. The four defendants allegedly falsified the incomplete progress notes to satisfy Medicaid program rules and avoid paying money back to the Medicaid program. The former AWBS employee whose signature was forged by the four defendants does not face criminal charges at this time. Attorney General investigation remains ongoing.

     Schuette filed the following charges on September 25, 2013 against Dr. Sandra M. Schiff, William G. Vallier, Marceia K. Lugo, and Laura Leca in the 54B District Court:

Dr. Sandra M. Schiff

  • One count of Medicaid Fraud- False Record or Statement to Avoid Payment to the State; a felony punishable by 4-years in prison and/or a $50,000 fine; and
  • One count of Medical Records- Intentionally Placing False Information on Chart-Health Care Provider; a felony punishable by 4-years in prison and/or a $5,000 fine.

William G. Vallier

  • One count of Medicaid Fraud- False Record or Statement to Avoid Payment to the State; a felony punishable by 4-years in prison and/or a $50,000 fine; and,
  • One count of Medical Records- Intentionally Placing False Information on Chart-Health Care Provider; a felony punishable by 4-years in prison and/or a $5,000 fine.

Marceia K. Lugo

  • One count of Medicaid Fraud- False Record or Statement to Avoid Payment to the State; a felony punishable by 4-years in prison and/or a $50,000 fine; and,
  • One count of Medical Records- Intentionally Placing False Information on Chart-Health Care Provider; a felony punishable by 4-years in prison and/or a $5,000 fine.

Laura Leca

  • One count of Medicaid Fraud- False Record or Statement to Avoid Payment to the State; a felony punishable by 4-years in prison and/or a $50,000 fine; and,
  • One count of Medical Records- Intentionally Placing False Information on Chart-Health Care Provider; a felony punishable by 4-years in prison and/or a $5,000 fine.

     All four defendants surrendered themselves to the proper authorities and were arraigned on September 26, 2013 before 54B District Court Judge Andrea Larkin. Judge Larkin set personal bond for each at $25,000. The defendants are due in court next on October 2, 2013 at 1:00 p.m. for a preliminary exam.

     Citizens with additional information that may assist this investigation, please contact Attorney General Schuette’s Health Care Fraud Division at 517-241-6525.

     The Attorney General Health Care Fraud Division exists to identify, prosecute, and prevent fraudulent activity by doctors, dentists, pharmacists, and other health care providers participating in the Medicaid program. Taxpayer dollars provide health care to indigent patients and other recipients. It is vital that these dollars be effectively spent to help those in need. Fraud affects everyone including the recipients of care, the taxpayers who pay for it, and the overwhelming majority of providers who conscientiously provide quality care.

     Since Attorney General Schuette took office in 2010, the Health Care Fraud Division (HCFD) has obtained criminal restitution orders totaling approximately $3,270,590.48; civil judgments totaling $88,204,675.57; and settlement agreements providing for the recovery of $417,138.61 to the Medicaid Program. In total, the HCFD has obtained court orders and settlements requiring the return of $91,892,404.66 to the Medicaid Program.

     A criminal charge is merely an accusation and all defendants in this case are presumed innocent unless proven guilty.

Schiff Mugshot Vallier Mugshot Lugo Mugshot Leca Mugshot

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