Los Angeles, California – LawFuel – IRS News – Yesterday afternoon, …

Los Angeles, California – LawFuel – IRS News – Yesterday afternoon, United States District Judge Dale S. Fischer sentenced Haydee Parungao to 57 months in federal prison for her role in a health care fraud scheme that cost Medicare over $3,000,000. Additionally, Parungao was sentenced for the structuring of cash transactions, conducted to avoid IRS reporting requirements, totaling $613,710.

In the sentencing decision, Judge Fischer ordered Parungao to pay restitution to Medicare in the amount of $3,099,835.89 and directed Parungao to spend 3 years on supervised release subsequent to serving her prison sentence.

Parungao is a Registered Nurse who purported to provide in-home nursing services to Medicare patients. From 2001 through 2004, she worked as an independent contractor for several home health agencies, including Provident Home Health Care Services, Inc., Tri-Regional Home Health Services, Inc., Datacare Home Health Service, Inc., and Double Diamond Home Health Services. Together with others working for the home health agencies, Parungao engaged in a scheme to defraud Medicare in which they billed Medicare for patients who were not homebound or otherwise did not qualify for Medicare home health services, billed Medicare for services that were not rendered, and created false medical records to support the fraudulent claims submitted to Medicare.

In the factual basis for her guilty plea, Parungao admits that, between January 2001 and December 2003, she purported to make over 18,000 home health visits. The majority of these, 10,050 home health visits, occurred between April 1, 2002 and August 31, 2003. Parungao’s notes for these visits indicate that she personally made the visits and that the visits lasted from 45 minutes to 1 hour in duration. Accordingly, Parungao purported to work every single day during this time period, including all weekends and holidays, averaging 20 visits per day. Parungao sets forth in her plea that she had purported to see up to 46 patients in a single day and as many as 6 different patients, in different locations, at overlapping times. There were 60 days on which Parungao claimed to have seen over 32 patients; at 45 minutes per patient, these visits would take more than 24 hours to accomplish.

Throughout the duration of the scheme, Parungao operated in cash. She did not maintain a bank account or hold property in her name. She cashed the checks she received form the home health agencies, generally at the banks upon which the checks were drawn. Parungao admitted that she knew that engaging in a cash transaction for more than $10,000 would generate a currency transaction report, which she knew would go to the IRS.

During the time that Parungao worked for Provident and Tri-Regional, she had made so many referrals to each agency that she frequently received more that $10,000 in a single pay period from either or both of the agencies. The payments that totaled more than $10,000 were systematically broken down into two or more checks, each check for less than $10,000. Parungao broke down the checks into checks that were for less than $10,000 for purposes of avoiding the cash transaction reporting requirements she knew would be triggered if she cashed a check for over that amount. In total, Parungao admitted that the total funds she had structured for the purpose of avoiding the cash transaction reporting requirements totaled approximately $613,710.

The plea agreement filed in this case further details that Parungao agrees to forfeit her interest in two Mercedes Benz automobiles, a 2002 Mercedes Benz ML 55 AMG and a 2003 Mercedes Benz SL 500, to the government. Parungao admits in the plea that these vehicles constitute the proceeds of her illegal activity.

Judge Fischer ordered Parungao to begin serving her sentence on May 25, 2007.

This investigation was conducted by Internal Revenue Service – Criminal Investigation and the Federal Bureau of Investigation.

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