A Michigan woman has pled guilty to stealing government funds that were designated to aid medical providers in the treatment of patients suffering from COVID-19 and acknowledged using the money for her own personal use. These charges were the first criminal charges for the intentional misuse of funds distributed from the CARES Act Provider Relief Fund. The CARES Act money was designated to help healthcare providers who were negatively financially impacted by the pandemic.
The court documents reveal that the Michigan woman admitted to previously owning a home health care agency in Indiana, which she had closed in early 2020. The closed agency was never operational during the pandemic, but the former owner received approximately $37,657 which was designated for the medical treatment and care of COVID-19 patients. She stole the funds by issuing checks to her family members for personal use, rather than using the funds as they were intended for relief efforts associated with the pandemic.
The woman pled guilty to one count of theft of public money. She is scheduled to be sentenced on May 19, and faces a maximum penalty of 10 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
According to the Department of Justice, in May 2021, the Attorney General established the COVID-19 Fraud Enforcement Task Force to “marshal the resources of the department in partnership with agencies across government to enhance efforts to combat and prevent pandemic-related fraud. The Task Force bolsters efforts to investigate and prosecute the most culpable domestic and international criminal actors and assists agencies tasked with administering relief programs to prevent fraud by, among other methods, augmenting and incorporating existing coordination mechanisms, identifying resources and techniques to uncover fraudulent actors and their schemes, and sharing and harnessing information and insights gained from prior enforcement efforts.” Additional information on the Department of Justice response to the pandemic can be accessed here.
Compliance Perspective
Issue
Misuse of allocated public funds can be seen as fraud, waste, and abuse of government funds. The Centers for Medicare & Medicaid Services (CMS) requires skilled nursing facilities to have a compliance and ethics program that is effective in preventing and detecting criminal, civil, and administrative violations under the Social Security Act, and in promoting quality of care. Routine audits should be conducted at each facility on monetary transactions and the results of the audits should be reported to the compliance and ethics committee and to the governing body. The audits should have a corrective action plan to address any identified discrepancy, and all discrepancies should be investigated and rectified immediately.
Discussion Points
- Review your policies and procedures for operating an effective compliance and ethics program. Ensure that your policies are reviewed at least annually and updated when new information becomes available.
- Train all staff on your compliance and ethics policies and procedures upon hire and at least annually, including their responsibility to identify and report any concerns of fraud, waste, or abuse of government funds in a timely manner. Document that these trainings occurred and file the signed document in each employee’s education file.
- Periodically perform audits to ensure all staff are aware of the importance of identifying compliance and ethics concerns and their responsibility to report them to their supervisor, the compliance and ethics officer, or via the anonymous hotline.
