Thursday, September 11, 2008

Whistleblower Defendant Gets 10 Years

Not a civil case, but Regenerations founder gets 10 years, owes Medicaid $3.3M treads on an issue interesting to me: whistleblower/.qui tam cases.

"Regenerations, an Indianapolis nonprofit, started out small in 2005. That first year, it reported providing psychotherapy for 20 disabled people on a $30,000 budget.

But Varnador K. Sutton had grander plans for his nonprofit.

Over the next two years, a bogus Medicaid billing scheme netted more than $3 million in taxpayer money for Regenerations, which prosecutors said was nothing more than a shell. As that cash streamed in, Sutton made seven-figure investments and real estate deals, and bought a 2007 Lincoln MKX and 2006 Jaguar.

A federal judge this week gave Sutton a 10-year prison sentence for health-care fraud. Authorities said they have seized the cars, property and bank accounts worth more than $2 million. That gives Sutton a start on paying nearly $3.3 million in restitution to the state Medicaid program.

Until a Medicaid recipient called a hotline about suspicious activity involving Regenerations, the firm flooded Indiana's Medicaid program with claims. Sutton, who had worked for the state, submitted bills for 84,000 counseling sessions on behalf of 2,500 Medicaid recipients.