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Even NBA and NFL players can face serious fraud charges for filing false claims, as healthcare fraud is a top law enforcement priority.
HEALTHCARE FRAUD IN THE NBA (AND NFL)
INTRODUCTION
The federal government continues to demonstrate that healthcare fraud is at the very top of its law enforcement priorities. They continue to prosecute healthcare fraud aggressively against those involved, even professional athletes.
The most recent headlines came from the NBA, regarding 18 former players caught up in healthcare fraud. Not too long ago, it was NFL players making headlines, also for filing false healthcare claims.
DISCUSSION
Federal prosecutors charged eighteen former NBA players with defrauding the NBA’s health and welfare benefit plan of over $2.5 million. The head of New York’s FBI office, Michael Driscoll, stated that the case demonstrates law enforcement’s continued focus on uncovering fraud scams that cost the healthcare industry tens of billions of dollars a year.
The NBA Healthcare Fraud Allegations
The alleged scam involved claiming fictitious medical and dental expenses during a three-year conspiracy that authorities claim started in 2017. FBI agents across the country arrested the former players and one of their wives just before the announcement.
In a news conference announcing the charges, the United States Attorney’s Office for the Southern District of New York stated: “The defendants’ playbook involved fraud and deception.”
According to an indictment returned in Manhattan federal court, the defendants conspired to defraud the NBA’s supplemental healthcare coverage plan by submitting fraudulent claims to get reimbursed for fake medical and dental procedures that never happened. Federal law enforcement claims travel records, email, and GPS data show that the defendants were sometimes nowhere near the medical and dental offices when they were supposedly getting treated. In one brazen instance, a former NBA athlete was actually in Taiwan playing basketball. He was supposed to be getting $48,000 worth of root canals and crowns at a Beverly Hills dental office in California.
The indictment alleges a conspiracy operating between 2017 and 2020. During that time, the NBAsupplemental health and wellness plan received false claims totaling approximately $3.9 million. Of that, the defendants obtained $2.5 million in fraudulent proceeds. Fraudulent reimbursements ranged from $65,000 to $420,000 for each person charged in the indictment.
The Alleged Mastermind
Former player Terrence Williams, who began his career in 2009 as a first-round NBA draft pick, is the alleged ringleader. Williams submitted $19,000 in fraudulent claims to the NBA health and wellness plan in November 2017 for chiropractic care, and his payout on that false claim was $7,672. Williams then recruited other former NBA players to participate in defrauding the plan. He allegedly provided fraudulent invoices from a chiropractor and dentist in Southern California and a wellness office in Washington state. According to the court filings, at least ten former players paid Williams kickbacks totaling about $230,000.
Another former player charged in the case is Tony Allen, a six-time All-Defensive team selection and a member of the 2008 champion Boston Celtics. Allen’s wife also faces criminal fraud charges. There have been reports that Allen’s number would soon be retired in honor of his achievements as a player.
Defendants’ Financial Status?
According to news reports, the former players involved never reached superstar status or reached the salary levels afforded to top players in the NBA. Allen may be one of the ones who had a more successful playing career. Still, the 18 players combined made $343 million from their NBA playing careers, and some undoubtedly also made additional outside income and endorsements. Many likely made additional income playing overseas as well.
If true, these news reports suggest that the former players did not need the money, leaving in question their motivation to participate in the scheme and file false claims to the NBA health plan. However, the U.S. Attorney speaking at the news conference refused to speculate about possible motivations or financial situations.
Another former player charged in the scheme was Sebastian Telfair, a one-time high school star from New York. Telfair was a highly touted prospect when he turned professional. However, his NBA career never brought the stardom that many people expected. Reporters note that Telfair’s finances qualified him for a court-appointed attorney at his first appearance in Manhattan before a magistrate judge, who set bail at $250,000.
*Pro-Tip: In white-collar fraud cases, it is typical for prosecutors to focus on defendants’ financial means when they argue for more prison time at the sentencing hearing based on greed. This case will be no different.
Healthcare Fraud & Wire Fraud
The defendants face charges for conspiracy to commit healthcare fraud and wire fraud, which carry potential penalties of up to 20 years in prison.
Williams, the alleged mastermind, also faces charges of aggravated identity theft, which carries a potential penalty of up to two years in prison. He faces this additional charge for trying to frighten a co-conspirator into paying a kickback by impersonating an employee from the NBA health plan’s administrative manager.
This case follows right on the heels of a different healthcare fraud case involving NFL players. Three former NFL players (Clinton Portis, Tamarick Vanover, and Robert McCune) recently pleaded guilty in another nationwide healthcare fraud scheme.
NFL PLAYERS PLEAD GUILTY TO HEALTHCARE FRAUD
Former NFL players Clinton Portis, Tamarick Vanover, and Robert McCune pleaded guilty for their roles in a nationwide healthcare fraud scheme and now face years in prison. The FBI headed up an investigation across the U.S. that culminated in the criminal filings.
Portis, Vanover, and McCune pleaded guilty to defrauding an NFL program set up to reimburse medical expenses not covered by insurance for retired players and their families. The NFL established the NFL Player Health Reimbursement Account Plan to provide tax-free reimbursement of medical expenses up to $350,000 per player.
News reports state that McCune, the alleged mastermind, could be facing up to life in prison after pleading guilty to conspiracy to commit wire fraud and healthcare fraud. His charges included 13 counts of healthcare fraud, 11 counts of wire fraud, and three counts of aggravated identity theft. The government claims McCune orchestrated the scheme that resulted in approximately $2.9 million worth of false and fraudulent claims filed and $2.5 million paid out between June 2017 and April 2018.
Portis and Vanover each pleaded guilty to conspiracy to commit healthcare fraud and could face up to 10 years in prison. According to prosecutors, Portis received just under $100,000, and Vanover just under $160,000 in benefits for expensive medical equipment never delivered.
Portis and Vanover agreed to pay back that money. In advance of a sentencing hearing, defendants can help mitigate the fallout from their actions by making restitution. Sentencing judges are likely to view such a step favorably.
At Prison Professors, an Earning Freedom company, our team regularly helps clientscraft sentencing mitigation strategies and obtain better outcomes.
CONCLUSION
These recent cases involving the NBA health and wellness plan and the NFL Player Health Reimbursement Account Plan further indicate law enforcement’s commitment to prosecuting healthcare fraud no matter where they find it. As Driscoll, the head of New York’s FBI office stated, the NBA case demonstrates law enforcement’s continued focus on uncovering fraud scams that cost the healthcare industry tens of billions of dollars a year. Anyone working in the healthcare industry could find themselves caught up in one of these investigations, whether as a witness, subject, or target.
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5 Takeaways From $150 Million Healthcare Fraud Scheme
