Michigan Defendants Plead Guilty in $13.8 Million Home Health Fraud Scheme

A Detroit-area doctor and home health agency owner pleaded guilty this week for their roles in a $13.8 million home health care fraud and money laundering scheme. 

Dr. Dwight Smith and Zahir Yousafzai pleaded guilty before the U.S. District Court of Eastern Michigan Tuesday, the Department of Justice, FBI and Department of Health and Human Services announced. 

In the fraud scheme, Yousafzai and co-conspirators acquired ownership of home health companies First Care Home Health Care LLC and Moonlite Home Care Inc. in 2009. Yousafzai also assisted in operating two other home health agencies, Physicians Choice Home Health Care LLC and Quantum Home Care Inc. He admitted the home health agencies billed Medicare for visits that never took place, totaling $13.8 million between July 2008 and September 2011, according to the court statements. 

Yousafzai admitted to paying medical professionals, including doctors, nurses, physical therapists and physical therapy assistants, to create fictitious patient files to document purported home health services that were never provided, the court reports. Yousafzai, a physical therapy assistant, also signed fictitious patient files in which physical therapy services were documented, but never actually provided.

Also, according to the reports, Yousafzai admitted he paid kickbacks to recruiters who obtained beneficiaries’ information and used the information to submit claims for home health services that were never provided. The beneficiaries sometimes pre-signed forms and visit sheets that were later falsified to indicate that they received home health services that were never provided. Other times, the beneficiaries’ signatures were forged on forms and visit sheets.

Additionally, Yousafzai admitted to establishing a shell company was formed to launder the fraud proceeds. 

Since March 2007 upon their inception, Medicare Fraud Strike Force operations in nine locations have charged more than 1,300 defendants who collectively have falsely billed the Medicare program for more than $4 billion. 

Written by Elizabeth Ecker

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Elizabeth Ecker
Director of Content at Home Health Care News
Curious about all things, when not writing about senior housing topics, Liz is an avid explorer of food. She loves trying new recipes, new restaurants and new ice cream flavors. (Current favorite: Goat cheese with red cherries.)