Mental health company owner, Catinia Denise Farrington of Cyprus, Texas, pleaded guilty to health care fraud and tax evasion in September of 2018. As of March 1st, 2019, she has been sentenced to 60 months in prison after profiting $4 million from Medicaid and just under $400,000 from her tax evasion scheme.
Health Care Fraud Conspiracy
According to prosecutors, Farrington owned a mental health care company out of North Carolina, Durham County Mental Health and Behavioral Health Services, LLC. Through this company, she submitted thousands of fraudulent claims to Medicaid for services that were never performed. These incidents occurred between 2011 and 2015, but this is not the only fraudulent activity that Farrington participated in during this time.
Tax Evasion in 2014
Farrington also pleaded guilty to evading taxes in 2014, which allowed her to evade paying income taxes on revenues of over $1 million from her North Carolina based business. According to prosecutors, Farrington was able to evade income taxes by transferring funds between several bank accounts, and then using the hidden funds to pay for personal expenses. In total, this tax evasion scheme allowed Farrington to evade $391,747 in owed taxes.
A Second Individual Charged
Farrington was not the only individual charged with health care fraud in relation to this case. According to the Department of Justice, a second individual, Haydn Thomas, was also found guilty for making fraudulent claims on behalf of the mental health care company, as well as for one count of tax evasion. During the scheme, Thomas was working as an office manager for an oral surgeon and supplied Farrington with dental patient names and their Medicaid identification numbers, which Farrington then used to submit false Medicaid claims. Prosecutors also claim that the tax evasion scheme in 2014 was orchestrated by both Farrington and Thomas. However, Thomas is still awaiting sentencing after pleading guilty to the charges.
Health Care Fraud & Tax Evasion Sentencing
Farrington, 44, pleaded guilty to health care fraud and tax evasion last September and was finally sentenced on March 1st, 2019 for 60 months in prison. Meanwhile, Thomas, also 44, has pleaded guilty to similar counts and is awaiting sentencing for March 27th, 2019. In addition to Farrington’s imprisonment, she has also been ordered to pay the IRS nearly 400K in back due taxes, as well as just under $4 million to the North Carolina Fund for Medical Assistance.
Combating Health Care Fraud
As authorities continue to prosecute individuals found guilty of health care fraud and tax evasion, it remains increasingly important that those with knowledge of these schemes come forward to make these charges possible. If you’re looking to learn more about health care fraud, tax evasion, financial fraud, or Medicaid fraud, visit the Whistleblower Help Center or contact Newman & Shapiro, today!