Wednesday, June 11, 2008
WOMAN ARRESTED ON FEDERAL FRAUD CHARGES FOR DEFRAUDING MEDICARE OUT OF $12 MILLION
This morning, special agents with the FBI and IRS-Criminal Investigation arrested the operator of Wescove Home Health Services at her home in Covina on health care fraud and money laundering charges stemming from her participation in a scheme that defrauded Medicare out of more than $12 million.
Felcoranenda “Nenda” Estudillo, 50, a registered nurse, ran Wescove, which was based in the city of West Covina. Estudillo was Wescove’s administrator, responsible for the home health agency’s day-to-day operations and Medicare billing activity. In a 36-count indictment returned earlier this week and unsealed today, Estudillo is charged with conspiracy, health care fraud, money laundering, the structuring of cash transactions and falsifying records to maintain Wescove’s participation in the Medicare program.
According to the indictment, Estudillo paid marketers to recruit Medicare beneficiaries to receive benefits they were not eligible to receive. The marketers recruited and referred Medicare patients to Wescove, even though the beneficiaries were not confined to the home and did not need skilled nursing or therapy services. According to the indictment, Wescove billed Medicare for home health services provided to beneficiaries who were not confined to their homes, did not qualify for or need those types of services, or never received any services.
Estudillo allegedly paid marketers fees ranging from $300 to $4,800, based upon the amount that Wescove was able to fraudulently bill to Medicare. Estudillo would pay marketers higher fees for patient referrals that resulted in increased Medicare billings. She also allegedly paid referral fees that she booked as “skilled nursing” payments to conceal the payment of kickbacks.
According to the indictment, some Medicare beneficiaries were paid cash to sign up for home health services after being recruited by the marketers to receive services they did not need or did not receive. Estudillo allegedly paid more than $3.1 million to at least six marketers for the referral of Medicare beneficiaries.
The indictment charges Estudillo with 11 money laundering counts and 12 cash-structuring violations. These result from allegations that Estudillo laundered the proceeds of her Medicare billing scheme to promote the scheme, conceal the source of payments made to marketers and to herself, and avoid the payment of taxes . According to the indictment, Estudillo paid cash to some of the marketers who referred patients. To facilitate this, Estudillo devised a check-cashing scheme involving the marketers and Wescover employees in which they negotiated Wescove checks, obtained cash, and Estudillo used some of the cash to pay the marketers and patients. Estudillo allegedly wrote checks to marketers and employees in amounts less than $10,000 in an effort to avoid the currency transaction reporting requirements that banks are required to follow.
Estudillo is expected to make her initial court appearance this afternoon in United States District Court in Los Angeles.
If convicted of all counts in the indictment, Estudillo faces a statutory maximum penalty of 430 years in federal prison.
The investigation of Estudillo was conducted by IRS-Criminal Investigation and the Federal Bureau of Investigation