“This defendant stole millions to provide health care to low-income families,” said US Attorney Michael Easley. “We will continue to investigate and prosecute those behind these unscrupulous schemes to misuse taxpayer dollars earmarked to help those in need.”
According to court documents and other information presented in court, between approximately 2012 and 2017, Fozard led a multi-district conspiracy to defraud North Carolina’s Medicaid system by filing more than $7 million in false and fraudulent reimbursement claims were from behavioral health services. Medicaid is a federally funded health care program that helps pay for medical services for low-income individuals and their families. In North Carolina, Medicaid is administered by the North Carolina Department of Health and Human Services, Division of Health Benefits.
Fozard owned and operated a number of behavioral health businesses that purported to provide services to Medicaid beneficiaries in the Central and Eastern counties of North Carolina, including Group Service, Group Service Solution, Zoofari Kids, and In Touch of Care. Each of these businesses undertook a systematic attempt to steal Medicaid by charging for services that were never rendered.
Group Service maintained offices in Raleigh, Dunn, Durham and Sanford at various times. Among others, Group Service employed co-conspirators Reginald Van Reese, Jr. and Ruben Samuel Matos to search low-income neighborhoods to identify eligible Medicaid recipients and collect their personal identification information (PII), including their Medicaid identification numbers. The collected PII was then incorporated into false and fraudulent claims that Group Service Medicaid submitted for reimbursement. Various “note-writers,” including co-conspirator Humberto “Ghost” Mercado, were hired to create supporting documentation in the event of a Medicaid trial. At one point during the conspiracy, Group Service was audited by a Medicaid contractor. To obstruct the examination, Fozard instructed note-writers to fabricate medical records and then arranged for those records to be made available to investigators.
For much of the same period, Fozard and another co-conspirator, Sharita Mathis Richardson, ran Zoofari Kids, who similarly defrauded North Carolina Medicaid. Zoofari operated in Durham and Garner. The Durham location shared the same address as Group Service and purported to provide mental health services to Medicaid recipients. The Garner location was strictly a drop-in daycare. However, the daycare was effectively funded by Medicaid fraud proceeds paid to Zoofari’s mental health business. Under Fozard’s leadership, Zoofari submitted thousands of false claims on behalf of a rendering provider whose information was used without its knowledge or consent, obtained lists of stolen Medicaid beneficiary information for inclusion in the fraudulent billings, and created fake medical records.
After Group Service was barred from billing for Medicaid, Fozard became involved in another billing system through another company, In Touch of Care. According to the investigation, In Touch of Care recycled Medicaid information from fraudulent bills collected from previous Fozard controlled companies have been submitted. In addition, Fozard arranged for In Touch of Care to bill for services based on the clinical information for a nurse who never provided the services listed.
In addition to engaging in healthcare fraud by companies under his direct control, Fozard worked with third-party owners and operators of other alleged behavioral healthcare companies to defraud the Medicaid system. For example, Fozard colluded with brothers Jerry and Tony Taylor, owners of Taylor Behavioral Health and Options Driven in Monroe, North Carolina, by selling them lists of stolen Medicaid beneficiary information for use in their own fraudulent billing.
Reginald Van Reese, Jr., Ruben Samuel Matos, Humbert Mercado, and Sharita Mathis Richardson each pleaded guilty to healthcare fraud and were sentenced to prison in similar cases filed in North Carolina’s Eastern District. Co-conspirators Jerry and Tony Taylor pleaded guilty to health care fraud and were sentenced to prison terms in similar cases filed by the United States Attorney’s Office for the Western District of North Carolina.
Michael Easley, United States Attorney for the Eastern District of North Carolina, made the post-conviction announcement
Relevant court documents and information can be found on the website of the US District Court for the Eastern District of North Carolina or on PACER by searching for case no.