HOUSTON—Jeffery Parsons, of Crockett, and David Edson, of Palm Harbor, Florida, have been charged in a 13-count indictment alleging a conspiracy to pay kickbacks to several area personal care home owners and patient advocates, announced United States Attorney Kenneth Magidson today. Edson, 65, and Parsons, 55, were the vice presidents of Development and Operations, respectively, for Continuum Healthcare LLC.
The indictment also charges personal care home owners Aretha Johnson, 61, of Sweeny; Inger Michelle Pace, 51; James Bobino, 44; Mary Browning, 66; Cheryl Waller, 68, all of Houston; Deborah Davis, 51, of Atlanta, Georgia; and patient advocates Earnestine Johnson, 55, and Ronald Turner, 53, both also of Houston.
The indictment, returned under seal Thursday, April 17, 2014, was partially unsealed upon the arrest of Edson yesterday in Palm Harbor, Florida. He made his initial appearance before a U.S. magistrate Judge in Florida, while Davis made hers before a U.S. magistrate Judge in Georgia. Parsons and the remaining defendants were arrested yesterday and appeared before U.S. Magistrate Judge George Hanks in Houston. With the exception of Pace, who was temporarily ordered into custody pending a detention hearing set for Monday morning, all were released upon posting bond.
The indictment alleges Edson and Parsons ran Continuum, which owned and operated three community mental health centers in the greater Houston Area. They allegedly billed Medicare and Medicaid for mental health services which were unnecessary and, in some cases, not even provided. According to the indictment, Edson and Parsons directed kickbacks to be paid to numerous area personal care home owners and patient advocates in exchange for the referral of Medicare patients to Continuum.
All defendants are charged with conspiring to solicit or receive kickbacks in connection with a federal benefit program.
Edson, Parsons, and Aretha Johnson are also charged with money laundering for engaging in monetary transactions in criminally derived property greater than $10,000 from proceeds of the conspiracy to pay and receive kickbacks. According to the allegations in the indictment, Edson and Parsons caused Continuum to bill $173 million to the Medicare and Medicaid programs for patients obtained as the result of illegal kickbacks paid to the personal care home owners and patient advocates. Medicare and Medicaid paid Continuum a total of $69.4 million.
Conspiracy to solicit or receive kickbacks and soliciting or receiving kickbacks each carries a maximum penalty of five years in a federal prison, upon conviction, while money laundering carries a maximum penalty of 10 years. The convictions also carry as possible punishment a maximum $250,000 fine.
The criminal charges are the result of a joint investigation conducted by agents of the FBI, Department of Health and Human Services-Office of Inspector General, Texas Attorney General’s Office-Medicaid Fraud Control Unit, Internal Revenue Service-Criminal Investigation, and the Railroad Retirement Board-Office of Inspector General. This case will be prosecuted by Assistant United States Attorney (AUSA) Al Balboni and Special AUSA Adrienne Frazior.
An indictment is an accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.