Thursday, September 24, 2009
And to think, this is just an estimate based upon sample. The part that I really enjoyed questioned all Wayne County reimbursements.
This could not have come at a worse time as the state is in the eleventh hour of budget talks.
Michigan Department of Human Services Audit 2009
Sunday, September 20, 2009
The Michigan Department of Human Services Director, Ismeal Ahmed is out there, using social media, to lobby, oops, I mean rally the child placing agencies, drats, I mean inform the public on the potential impact of the proposed budget cuts to DHS.
In this unrehearsed, cue card reading presentation, Mr. Ahmed starts his spiel on the severe crisis families, dependent upon the state's social support system, will experience. I was somewhat shocked that there were no photos of abused and neglected kids, a long-standing traditional state technique I like to call "throwing-dead-babies." See, whenever DHS is put in the hot seat, being questioned about fulfilling its administrative duties of running an efficient agency, someone always seems to start screaming "more child protection." Here is an example of how it works:
"These cuts are too large, too deep, too damaging, and undermine the safety net needed to protect so many vulnerable children, adults and families," Ahmed said.
He is absolutely correct if the administration of DHS continues along its merry way of turning a blind eye to the pervasive fraud, waste and abuse.
Mr. Ahmed points out that the proposed cuts would also:
* Eliminate the program that helps low-income parents pay for childcare.
* Eliminate the Early Childhood Investment Corp. and its programs that foster school readiness and life success for young children.
* Make a $10 per person, per month cut in the Family Independence Program, which helps families with living expenses such as rent, utilities, clothing and personal care items.
* Reduce the State Disability Assistance program grant which helps people who are disabled and the elderly.
These are pretty compelling points of contention to not cut the the DHS budget, but this is asymmetrical in its presentation of facts.
The truth of the matter is DHS is paranoid of violating the settlement agreement with the Children's Rights class action lawsuit. One of the conditions of the settlement was to hire more CPS workers. If DHS does not hire more workers, then, I am guessing DHS is looking at exemplary damages. The price of the recovery of attorney fees cost Michigan $6.2 million.
Despite the Michigan DHS Audit of 2004 which questions over $600 million in costs and the DHS Audit of 2006 which questions another $600 million in costs nothing really has changed. DHS still refuses to initiate contractual debarment, fines or sanctions of the sub-recipient fraudfeasor. I will save you the angst in not providing a summation of all the DHS single audit program questioned costs.
And just think, the legislature is only proposing a cut of $169 million. Whatever shall Mr. Ahmed do? Reign in on the fraud, waste and abuse in DHS or close his eyes really, really tight and hold up a baby as a shield from public scrutiny. Oh, the administrative angst!
Now, here is another interesting item. Mr. Ahmed claims that the loss of DHS workers would create a barrier for individuals and families to access services. I will close this out by directing you to watch another DHS youtube creation.
Friday, September 18, 2009
AN ARRA MODEL OF ACCOUNTABILITY AND TRANSPARENCY
On February 17, 2009, President Obama signed into law the American and Reinvestment Act of 2009, Public Law 111-5 (ARRA). This Act provided $787 billion of federally financed economic stimulus finding through a combination for spending programs and reductions in business and individual taxes. Michigan will receive hundreds of millions of dollars of the ARRA funds. A main component of the ARRA is to have in place an effective process to prevent and ameliorate waste, abuse, and fraud.
As Michigan has been selected as one of sixteen states that will be monitored over the next three years to provide an analysis of the use of funds under the ARRA, the opportunity exists to create new businesses and jobs by developing a model of accountability and transparency that may be implemented across the nation.
REVISED STATUTES OF 1846 (EXCERPT) MCL 14.29 § 29, CL. 1948: The auditor general is vested with the power to request the attorney general to prosecute matters within its department.
CONSTITUTION OF MICHIGAN OF 1963, ARTICLE IV, § 53, Eff. Jan. 1, 1964: This establishes the appointment, qualifications, term, removal, post audits, and authority of the auditor general and his authority.
EXECUTIVE ORGANIZATION ACT OF 1965 (EXCERPT) Act 380 of 1965 MCL 16.182 § 82, Eff. July 23, 1965: Transfers by a type III transfer to the department of treasury and abolishes the office of the elected auditor general.
THE MANAGEMENT AND BUDGET ACT (EXCERPT) Act 431 of 1984, MCL 18.1461 § 461 Eff. March 22,1999: Established audit of federal grants awarded to state in accordance to Public Law 104-156, chapter 75 of title 31 of the United States Code, 31 U.S.C. 7501 to 7507 pertaining to audit evaluation of the internal controls of this state and the state's compliance with material features of laws and regulations related to major federal assistance programs.
EXECUTIVE REORGANIZATION ORDER (EXCERPT) E.R.O. No. 2007-22, Off. October 1, 2007: MCL 18.46 Transfer of powers and duties of internal auditors of principal departments under MCL 18.1486 and 18.1487 to office of the state budget director; transfer of powers and duties of principal departments to appoint and supervise internal auditor under MCL 18.1486 to state budget director.
COST BENEFIT ANALYSIS
There are no costs associated with this bill, as its purpose is to reduce and ameliorate waste, abuse, and fraud.
1. The reduction and amelioration of waste, abuse, and fraud in federally funded grants will provide for the opportunity to more efficiently utilize funding and resources by targeting and capturing the recoupment of funding from fraudulent activities.
2. In turn, this will allow the state to receive 10 percent of the recoupment of the federal share of fraudulent claims.
There will be a decrease in the state percentage of the formula match of its federal grants, further improving resources and operations of the state
4. Public image of the state as an ARRA accountability and transparency demonstration improves, encouraging new economic development.
The impact of this bill will increase efficiency of state operations in the reduction and amelioration of waste, abuse, and fraud of federal funding and will demonstrate compliance with the ARRA and the U.S. Office of Management
Budget Circular A-133.
HOUSE BILL No.______
______________, 2009, Introduced by Reps. ___________ and _________ and referred to the Committee on __________________.
A bill to amend 2003 PA 1, entitled
"AUDITS AND EXAMINATIONS"
(MCL 13.101) by adding the term “annual” in section 1 and by adding sections 1a, 1b, 2a, 2b and 2c to chapter 13.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
13.101 Auditor general; duties; powers; employment and compensation; influencing action of examiner as misdemeanor; definitions.
(1) The auditor general shall conduct ANNUAL audits and examinations of all branches, departments, offices, boards, commissions, agencies, authorities, and institutions of this state.
(a) THE AUDITOR GENERAL SHALL IMMEDIATELY REPORT ALL FINDINGS OF AUDITS AND EXAMINATIONS OF ALL BRANCHES, AGENCIES, AUTHORITIES, BOARDS, COMMISSIONS, DEPARTMENTS, INSTITUTIONS AND OFFICES OF THIS STATE TO THE LEGISLATURE.
(b) THE AUDITOR GENERAL SHALL IMMEDIATELY REFER VIOLATIONS OF STATE AND FEDERAL LAW TO THE ATTORNEY GENERAL.
(2) In connection with the audits and examinations described in this act, the auditor general may examine, or cause to be examined, the books, accounts, documents, records, performance activities, and financial affairs of each branch, department, office, board, commission, agency, authority, and institution of this state.
(3) Upon demand of the auditor general, deputy auditor general, or any person appointed by the auditor general to make the audits and examinations provided in this act, the officers and employees of all branches, departments, offices, boards, commissions, agencies, authorities, and institutions of this state shall produce for examination all books, accounts, documents, and records of their respective branch, department, office, board, commission, agency, authority, and institution and truthfully answer all questions relating to their books, accounts, documents, and records of their respective activities and affairs.
(4) In connection with audits and examinations described in this act, the auditor general, deputy auditor general, or any person appointed to make audits and examinations may issue subpoenas, direct the service of the subpoena by any police officer, and compel the attendance and testimony of witnesses; may administer oaths and examine any person as may be necessary; and may compel the production of books, accounts, papers, documents, and records. The orders and subpoenas issued by the auditor general, deputy auditor general, or any person appointed with the duty of making the examinations provided in this subsection may be enforced upon application to any circuit court as provided by law.
(5) The auditor general may employ and compensate auditors, examiners, and assistants as he or she considers necessary. In addition, the auditors, examiners, and assistants shall be paid their necessary traveling expenses while engaging in the duties provided under this act. Compensation and expenses shall be paid out of the funds appropriated for that purpose. The auditor general and the deputy auditor general shall receive their actual traveling expenses incurred while engaging in the duties provided under this act, which shall be paid out of the funds appropriated for that purpose.
(6) Any person who gives or offers to any examiner, accountant, clerk, or other employee of the auditor general, any money, gift, emolument, or thing of value for the purpose of influencing the action of the examiner or other employee, in any matter relating to the examination of any public account authorized by this act, or for the purpose of preventing or delaying the examination of any public account, or for the purpose of influencing the action of the examiner or other employee, in framing, changing, withholding, or delaying any report of any examination of any public account, is guilty of a misdemeanor, punishable by a fine of not more than $1,000.00 nor less than $200.00, or imprisonment for not more than 6 months and not less than 30 days, or both.
(7) Any person appointed by the auditor general to make the examinations provided for under this act, or any officer, clerk, or other employee of the auditor general, who receives or solicits any money, gift, emolument, or anything of value for the purpose of being influenced in the matter of the examination of any public account authorized by this act, or for the purpose of being influenced to prevent or delay the examination of any public account, is guilty of a misdemeanor, punishable by a fine of not more than $1,000.00 and not less than $200.00, or imprisonment for not more than 6 months and not less than 30 days, or both.
(8) As used in this act:
(a) “Audit” means a post audit of financial transactions and accounts or performance audit as described in section 53 of article IV of the state constitution of 1963.
(b) “Auditor general” means the individual appointed auditor general under section 53 of article IV of the state constitution of 1963.
(c) “Examination” means an inquiry, compilation, or review within the scope of the auditor general's authority under section 53 of article IV of the state constitution of 1963.
SEC. 2. SPECIAL ASSISTANT AUDITORS.
(a) THE AUDITOR GENERAL MAY CONTRACT WITH THE FOLLOWING STATE LICENSED ENTITIES: CERTIFIED PUBLIC ACCOUNTANS; QUALIFIED MANAGEMENT CONSULTANTS; ATTORNEYS; AND OTHER PERSONS OR FIRMS NECESSARY TO CARRY OUT THE DUTIES OF THE OFFICE. FOR THE PURPOSE OF ASSISTING IN PERFORMAANCE AUDITS, THE AUDITOR GENERAL MAY CONTRACT WITH ANY STATE AGENCY. THE AUDITOR GENERAL MAY CONTRACT WITH OTHER GOVERNMENTAL AGENCIES FOR THE CONDUCT OF JOINT AUDITS OF A STATE AGENCY OR A PORTION THEREOF.
(b) THE AUDITOR GENERAL SHALL ADOPT RULES ESTABLISHING QUALIFICATIONS FOR NON-LICENSED PERSONS WITH WHOM HE MAY CONTRACT.
(c) THE AUDITOR GENERAL MAY DESIGNATE ANY PERSON WITH WHOM HE CONTRACTS AS A SPECIAL ASSISTANT AUDITOR FOR THE PURPOSE OF CONDUCTING A POST AUDIT OR INVESTIGATION UNDER HIS SUPERVISION. THE AUDITOR GENERAL MAY DELEGATE HIS POWERS AND AUTHORITY RESPECTING POST AUDITS AND INVESTIGATIONS TO SPECIAL ASSISTANT AUDITORS OTHER THAN THE POWER OF SUBPOENA, BUT ANY DELEGATION OF AUTHORITY TO ADMINISTER OATHS OR TAKE DEPOSITIONS MUST BE MADE IN WRITING AND LIMITED TO A PARTICULAR AUDIT OR INVESTIGATION.
Tuesday, September 15, 2009
U.S. House Ways and Means Testimony on the revisiting of implementation for the Fostering Connections to Success and Increasing Adoptions Act of 2008
To the Honorable Members of the Ways and Means Committee:
Greetings and Salutations
My name is Beverly Tran and I rise to this occasion to thank you for listening to the voice of the people, for it has been silenced for far too long. I share with you my sole concern with the implementation of the Fostering Connections to Success and Increasing Adoptions Act of 2008 (P.L. 110-351), and that is a lack of checks and balances.
Understanding the failure of implementation
Since 2001, I have been seeking the explanation of parental rights. More than just a statutory definition, I sought to understand its epistemology beyond the general consensus of social theory.
Why had there yet to be demonstrated a logically constructed, conceptual and operational formula for the determining factor of parental rights? My only recourse was to deconstruct the policies of child welfare. What I found was the existence of a well-founded methodology in determining parental rights, including its clear and concise evidentiary standard. The foundation of parental rights had been laid many centuries ago in property law, theorized through microeconomics.
The reason child welfare, specifically child protective services, foster care and adoption, in its current state, will never meet its end goal of functioning in the best interest of the child with the current implementation of this Act, is because no one understands what it is that is being protected. It is not the child, per say, but the future of the child to mature to be a tax-paying contributor to society.
No one understands that checks and balances of the child welfare system do not exist.
Child welfare as a frontier industry
Child welfare must not be understood as an industry that was constructed to maximize the profits of society through the best interests of the child, but it must be understood as a profit-maximizing industry that has schemes to increase its inputs, throughputs and outputs to ensure the economic sustainability of the public and private contractual arms of the states. Inputs are children who enter child welfare; throughputs are foster children; and, outputs are those children that exit the system, whether through reunification, adoption, maturation or attrition.
The Fostering Connections Act can be properly implemented, but only if this Congress understands that there needs to be a substantial change in its current operations by implementing checks and balances.
A lack of market regulation
Since foster care and adoption statutorily became a fully, publicly funded industry in 1974, it has operated strictly with federal funding and regulations, only in the form of financial penalties if the market shows signs of weakness, as states must meet and exceed the previous year’s federally mandated benchmark of the number of children under the auspices of the state to avoid financial penalties. The market is devoid of competition as the government is monopolistic with its statutory control and possesses sufficient authority to acquire the goods and procure the services, through the removal of the child by and through the removal of the legal rights to the grant of custody and guardianship.
Upon further examination, it will be demonstrated that it is the right of the state to grant the custody and guardianship, for it is the state that is the possessor of parental rights to the acquisition of goods.
Due to the lack of this understanding, federal and state policies have been improperly formatted and implemented. We, as a nation have witnessed the residual effects of a system devoid of oversight, and that is our financial system. Now, we are experiencing the second wave of fraud as our national leadership is fast asleep at the helm of the ship named health care.
Child welfare operates in a risk aversive market, as it intentionally never included the oversight mechanism of accountability and transparency; there are no checks and balances, hence, no incurred liabilities from error.
The mechanical error that I have identified is the systemic deficiency of checks and balances, embedded deep within the ethos of foster care and adoption. Checks and balances, essential elements in tripartite governments, must be readily recognized as accountability and transparency.
If it has been determined that law and policy has been violated within the mechanical procedures of foster care and adoption, it is considered as an acceptable mistake, with a federally acceptable range of error of 0.10. This acceptable error is the destruction of a family.
Nothing is publicly reported, not even for the purposes of ameliorating future material and provisional violations of law and policy, particularly those committed under the color of law. This phenomenon is largely due to an inherent conflict of interest breed within the philosophical edifice of the child welfare system. Under the doctrine of parens patriae, the states attorney general have been granted the powers of parental rights through statutory declarations of commerce.
It thus becomes a contentious issue of intervention: “Do the states attorney general advocate to further a compelling governmental interest in the representation of the state and its contractual arms of child welfare, or do the states attorney general advocate for the citizen individuals who have been granted the gift of custody and guardianship? The child welfare system, in whole, incorporating all facets of the industry, functions on the fallacy of affirming the disjunct, that is, the government operates in good faith and there is no need to advocate for the citizen individuals who allegedly violated the granted gift of custody and guardianship.
Simply put, it is in the best interests of the child for government to invest in the profitable return of a future tax-paying, productive citizen, and not to advocate for the non-productive individual citizen, for that individual has violated the social compact in failing to contribute to the society as a whole, whether it be morally, intellectually, financially, or economically. Because of the belief government functions in good faith, there is no need to construct and implement a congruent system of checks and balances in child welfare. The crime of poverty has been justified.
Where public access and voter participation into the mechanical process of this market are the checks, the general public is disenfranchised because child welfare law and policies are neither put up for public discussion nor full disclosure. Even more so, a targeted population is specifically disenfranchised because children are not allowed the right to vote.
Child welfare protects and preserves itself by importing policies to obviate transparency and accountability, whereby, it has manufactured obfuscatory policies to terminate parental rights of the granted gift of custody and guardianship to “cloak” the industry of abuse and neglect.
That "cloak", for which I reference, is laced with public policies to create the tapestry of public perceptions, to conceal the inner workings of the industry of child welfare. This cloak is impenetrable to empirical analysis, as it is hermetically sealed by the Freedom of Information Act, and the institutionalized belief that sealed information of child welfare policies furthers a compelling governmental interest. That compelling governmental interest is the general welfare of the public, now and in the future.
When the 1974 Child Abuse Prevention Treatment Act was designed, a fatal flaw was inculcated into 1997 Adoption Safe Families Act, and its subsequent legislative actions. I speak again of the lack of checks and balances. This philosophical tenet is embedded deep within core of public belief, woven into the historical fabric of society and engrained into the academic discipline of policy analysis, where nothing could be of the contrary. Initial funding streams from Social Security Title I, Title II, Title IV-A, B, D and E, Title V and Medicaid Targeted Case Management (TCM), as well as others, were created to flow down to the states to care for abused and neglected children who were qualified as impoverished under the means test of Title IV-A under the Temporary Aid to Needy Families (TANF). Simply put, poverty is codified as abuse and neglect and the discipline of Social Work has generated the only literature of analysis, which has been mostly qualitative.
Under the Eleventh Amendment of the United States Constitution, states possess sovereign immunity from prosecution of wrongdoing by the federal government. Immunity is then draped to circumvent accountability and transparency in non-reporting/non-disclosure through Freedom Of Information Act exceptions. Basically, anything dealing with errors in child welfare cases, more intuitively recognized as fraud, waste and abuse, is kept from the public for the protection of the child, justifying the lack of need for exclusionary databases and reporting protocol.
Due to the lack of transparency, federal and state policies have been improperly formatted and implemented. We, as a nation have witnessed the residual effects of a system devoid of oversight, and that is our financial system. Now, we are experiencing the second wave of attack on our nation’s economic security as our national leadership have been fast asleep at the helm of the ship named health care. The monster named Medicaid fraud has victoriously raised its ugly head, with no one to battle, until now.
I take this time to honor a great man, former U.S. Attorney General Michael B. Mukasey, for personally inspiring me to continue my work to end Medicaid fraud in child welfare. He is the first leader to listen and speak out on the need for investigation on the levels of political corruption, fraud, waste and abuse in the U.S. Administration for Children and Families through the early initiatives of the Health Care Fraud Enforcement Task Force (H.E.A.T.)
I take this time to thank the dedication of U.S. Attorney Eric H. Holder, Jr., U.S. DHHS Secretary Kathleen Sebelius, U.S. DHHS Inspector General Daniel R. Levinson for listening to the people and developing the Strike Forces to end Medicare fraud in child welfare.
As it stands, there is no system of “checks and balances” to maintain the integrity of operations and best interests for all stakeholders involved in the implementation of this Act. The amount of power and money involved in child welfare is massive, involving multiple funding streams of Social Security and Medicaid, yet pails to the levels of fraud, waste and abuse of taxpayer dollars. Poverty is codified as the crime of abuse and neglect for eligibility of a child entering foster care is strictly based on being impoverished. Hence, as poverty increases so shall the number of child removals to foster care. Billions of dollars of federal fraud were found through only cursory audits conducted by the U.S. Department of Health and Human Services (DHHS) Office of Inspector General (OIG) and U.S. Department of Justice, but this shall be no longer for the people have been heard.
The OIG has identified a number of state financing arrangements and other revenue-maximization tactics that inappropriately increase Federal Medicaid payments to States. Children are being double-billed, provided for unnecessary medical services and phantom programs are funded that bill fictitious children and services. This is what is called fraud, or more intuitively, federal false claims. Every year, lawyers across the nation are settling an increased number of lawsuits against states, child placing agencies and foster parents to the tune of tens of billions of taxpayer dollars, all because the nation has not had the opportunity to be exposed to the child welfare industry for what it is: a market.
U.S. DHHS funded organization, Council On Accreditation, has nothing to do with children and families as they only lobby for their due-paying, state contracted, private agencies. An accreditation organization is not supposed to be established to advocate for transgressors of law, but it does.
It is time to hold these privatized child placing agencies to the same standards they hold the guardians of children. If the agencies possess the empowering authority to remove children and advocate termination of parental rights, then, in the same wielding of justice, the state should possess the empowering authority to remove licenses and terminate contractual relationships, and effectuate contractual debarment with these child placing agencies. The regulatory mechanism of the OIG exclusion database is in place but is not utilized.
As these child welfare programs function devoid of any accountability, the first instance of oversight would be to effectuate financial sanctions and contractual debarment with privatized agencies through the state licensing agencies. Privatized agencies operate as not-for-profit, therefore excluding them from external audits. Typically, child placing agencies self-report on an honor system because it is too costly for a state to retain the manpower and resources to properly ensure that each entity is in compliance with the requirements or receiving federal funds pursuant to the Office of Management and Budget Circular A-133. It becomes more cost-effective for a state to turn its head and allow fraudulent billing to occur than to enforce regulation.
The largest federally funded component of child welfare is not the Social Security Title IV-E, as everyone would like to believe, it is Medicaid: Targeted Case Management and Optional Targeted Case Management. States need to decrease its percentage in the federal formula for Medicaid funding. Right now it is approximately 50%. It becomes more cost effective for a state to continue sinking money into a dysfunctional child welfare system than come into federal compliance with its operations, such as enforcing existing accountability statutes in dealing with fraud. Assumption may be formulated that some states use a portion of the Federal Funding Percentage to meet its State Funding Percentage. This can only be disproved with regulation.
Encourage State Medicaid Fraud Units to prosecute and recover
State Medicaid Fraud Units need to finally step up to the plate and start aggressively going after Medicaid fraud in child welfare. If the Attorney General is ever able to release himself from the statutory constraint of only advocating for transgressors of law, the recovery percentage of the federal portions of the fraud would be situated at 10%, bringing back in billions of lost funds from over the past few years and demonstrating exemplary standards to deter future fraudulent transgressions.
These state units can be encouraged to work with its citizens, as they may be the eyes and ears of regulation through public awareness campaigns, whistleblower litigations, and state Medicaid False Claims statutes. As many abuse and neglect programs are riddled with fraudulent billing and poor or falsely generated performance reports, the only way of verifying this is to listen to the people.
Promote the funding of public legal defense and grievance databases
Unfortunately, one of the few ways a family can access medical, social, psychological services for children today is through a court classification of abuse and neglect. Social welfare assistance programs have been cut, but the only federal funding streams that has opened up to provide for those who need help has been foster care. It has come to the point where there are no other options.
A blueprint for accountability and transparency was never conceived in child welfare. When a social system has a zero error rating in decisions to remove children and/or terminate parental rights, no databases of grievances, sanctions, fines, contractual debarment, including violations of material provisions of law and policy, a red flag should immediately be raised. There is a greater possibility of being not found of murder than it is being not found guilty of child abuse and neglect, as the jurisprudence of dependency courts are unparallel to traditional courts, the adjudication standard being guilty, until proven innocent.
It is my hope that this Congress will direct a portion of this funding to legal defense and for the construction of a grievance database, similar to what is called for in the U.N. Intercountry Adoption Treaty to foster connections between the people, the U.S. DHHS OIG and U.S. DOJ AG to stop Medicaid fraud in child welfare.
Reinstatement of parental rights
If a system is to be viewed as balanced, there is always a counter-balance. This would be the reinstatement of parental rights. Currently, there are four states, which have some form of limited exceptions to reinstatements. Technology has removed the barrier of contact and time. In light of the crux of my position on Medicaid fraud, there does exist improper and unnecessary removals of children and termination of parental rights, by what is considered as being legally kidnapped. There are times where it may take an individual more than 12 months to obtain the help needed to succeed in life. We must understand the severance of a legacy has not proven to be the best means in dealing with the hardships of others. Let us take the time to reunite these children with the degrees of consanguinity and affinity so they may have a chance to connect to a profitable and successful future for their own best interests.
With sincerity and serenity,
Friday, September 11, 2009
Two Former Luzerne County Court of Common Pleas Judges Indicted on Racketeering, Fraud, Money Laundering, Tax, and Related Charges
Dennis C. Pfannenschmidt, United States Attorney for the Middle District of Pennsylvania; Janice Fedaryck, Special Agent in Charge, Federal Bureau of Investigation; and Don Fort, Special Agent in Charge, Internal Revenue Service-Criminal Investigation Division, announced today that a federal grand jury sitting in Harrisburg has returned a 48-count indictment charging former Luzerne County Court of Common Pleas judges Michael T. Conahan and Mark A. Ciavarella, Jr. with racketeering and related charges in connection with alleged improper actions of the former judges to facilitate the construction and operation of juvenile detention facilities owned by PA Child Care, LLC and Western PA Child Care, LLC.
The indictment alleges that the defendants engaged in racketeering, fraud, money laundering, extortion, bribery, and federal tax violations and that they received millions of dollars in illegal payments. Along with the criminal charges, the indictment seeks the forfeiture of at least $2,819,500 which is alleged to be the proceeds of the charged criminal activity.
This investigation is being conducted by the Federal Bureau of Investigation and by criminal investigators of the Internal Revenue Service.
On April 8, the FBI issued a statement requesting the public’s assistance in this ongoing investigation. Anyone with information is asked to call the public corruption task force toll free at 1-866-996-4320.
This case is part of an on-going investigation by the Federal Bureau of Investigation and the Internal Revenue Service and is being prosecuted by a team of federal prosecutors led by Senior Litigation Counsel Gordon Zubrod and includes Assistant U.S. Attorneys William Houser, Michael Consiglio, Amy Phillips, and Criminal Division Chief Christian Fisanick. Pfannenschmidt praised this team of investigators and prosecutors for their tireless efforts on behalf of the people of Luzerne County.
An indictment or information is not evidence of guilt but simply a description of the charge made by the Grand Jury and/or United States Attorney against a defendant. A charged defendant is presumed innocent until a jury returns a unanimous finding that the United States has proven the defendant’s guilt beyond a reasonable doubt or until the defendant has pled guilty to the charges.
Sunday, September 6, 2009
A kickback, under the theories of fraud, is generally when when a person provides false information to benefit from federal funds.
Recently, the U.S. DHHS OIG and U.S. DOJ AG partnership to end health care fraud, Detroit H.E.A.T. identified another multi-million dollar Medicare Fraud scheme. This is an excellent example to apply to Medicaid Fraud profit-maximizing schemes in child welfare.
In this particular setup, the clinic routinely billed the Medicare program for services that were medically unnecessary or were never provided. Patients were prescribed medications at the clinic based not on medical need, but on what medications were likely to generate Medicare reimbursements. Falsified medical files were maintained by the clinic to make the treatments purportedly being given there appear legitimate, when in fact they were not.
Medicare beneficiaries were not referred to the clinic by their primary care physicians, or for any other legitimate medical purpose, but rather were recruited to come to the clinic through the payment of kickbacks. In exchange for those kickbacks, the Medicare beneficiaries would visit the clinic and sign documents indicating that they had received the services billed to Medicare. Kickbacks came in the form of cash and prescriptions for narcotic drugs.
Now, here is how it works in child welfare:
Targeted Case Management is a Medicaid funding source in foster care and adoption. Child Placing Agencies (CPA) routinely bill the Medicaid program for services that were unnecessary or were never provided. These services could range from individual therapy for the child to MRIs. Children referred to mental health clinics by a CPA are prescribed medications at the clinics, not based on medical need, but on what medications were likely to generate Medicaid reimbursements. Falsified medical files are maintained by the clinic, the CPA and the courts to make the treatments purportedly being given there appear legitimate, when in fact they were not. The higher the dosage of medication, the higher level of payment. This scheme was explained in the court transcripts of the adoptive father of Ricky Holland that was murdered in Michigan.
The next question on everyone's mind is, "Why haven't I heard about this before?"
The answer is quite simple: Freedom of Information Act (FOIA).
Quite simply, under FOIA, anything dealing with a child, especially a child under the auspices of the state in foster care are protected from review and disclosure. The best part is when a child in foster care is adopted out, those records are not just sequestered from public scrutiny, they are shredded forever. There is no possible way for a federal audit to detect the blatant false claims and fraud...until now.
Kiddy Kickbacks go deeper than the FBI Medicare investigation I presented. In foster care, the entire system operates on kiddy kickbacks. It is relatively easy to find the connections, just look at the board of directors.
Let's start with the Archdiocese of Detroit.
For example, Robert Asmussen, is Vice President of Strategic Planning at St. John Health and is the Chairman, Board of Directors, St. Vincent and Sarah Fisher Center, a residential institution for foster care youth, I shut down. (I dare anyone to challenge me on that one.) Children who were physically harmed while at St. Vincent and Sarah Fisher Center were taken to Providence, a health care facility of St. John Health. As mandatory reporters, the doctors would never, ever, ever file incident reports to the state of children who were harmed.
St. John would shoot the kids back to St. Vincent Sarah Fisher Center to be diagnosed by Psychiatrist Howard Weiner, M.D., to be in need of higher dosages of medication, generating more reason for the children to remain in care and opening the door to increases in funding for higher levels of special needs.
Services were never provided to the children in St. Vincent Sarah Fisher Center but they were documented, signed by Dr. Weiner and submitted into court.
It gets better.
Patricia M. Moylan, Ph.D. would conduct physicals for the children at St. Vincent Sarah Fisher and submit for billing. Dr. Moylan was signing physicals for children she had never seen because on one document, she conducted a physical for a 12 year old girl, who was a boy. (Yes, I have the documents stored in various locations.)
But wait, there is more.
Judge Michael J. Talbot sits on the Michigan Judicial Tenure Commission. This is the place where one would file a complaint against a Referee or Judge challenge conduct and procedure in a child protection case. Needless to say, the Commission has never found any fraud, wrong doing, or any transgressions by the those presiding over cases. The reason why is most judges sit on the boards of these CPAs.
Just look at Michigan Supreme Court Justice Maura Corrigan. She is a Director of Vista Maria, a Commissioner of the Pew Commission on Children in Foster Care, and participates in various child welfare task forces. In fact, she focuses on funding, or rather the construction of federal funding-maximizing schemes for foster care, because we all know, the Chief Justice of the Supreme Court is the overseer of the State Court Administration Office, which is in charge of child welfare funding. Justice Corrigan is the former Chief Justice who ran her campaign telling the public to thank her for everything she has done for foster care and adoption in Michigan.
Then there is Nancy J. Diehl who has worked as a prosecutor for over 24 years and currently heads the Felony Trial Division in the Wayne County Prosecutor's Office overseeing the Child and Family Abuse Bureau. She lectures extensively throughout the state and nationally on domestic violence and child abuse investigation, prosecution and related issues. Diehl is the coauthor of four booklets pertaining to children and the legal system.
Not one CPA has ever been prosecuted in Wayne County. Even more interesting, it is the Attorney General who prosecutes abuse and neglect in Wayne County and not the county prosecutor.
In the end, Kiddy Kickbacks are a great way of keeping a system functioning at peak performance, never giving any cause for alarm of fraud. CPAs refer children to contracted psychological service providers. In turn, the service providers known as therapists and psychologists, generate court reports that will have the child medicated for higher levels of billing and longer stays in the system. As the end goal is termination of parental rights, the service providers guarantee court reports that will support the CPA activities. The more the service providers support the CPA activities, the more clients are referred to them. And that is what is called a Kiddy Kickback.