`
`Case 1: 18-c—r--00008 Document 1 Filed on 01/09/18 in TXSD Page 1 of 27
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`IN THE UNITFifiSTATfiSfiTSTHICTfiUUHT FOR THE
`SOUTHERN DISTRICT or TEXAS
`-
`Brownsvilie Division
`
`United States District court
`8°."th fiat-E3 0‘13”“
`_
`JAN 0 9 2018
`
`David J. Bradley. Clerk of Court
`
`
`
`Case No.
`
`Count 1: 18 U.S.C. § 1349
`(Conspiracy to Commit Health Care Fraud)
`
`Counts 2—7: 18 U.S.C. §§ 1347 & 2
`(Health Care Fraud)
`
`Count 8: 18 U.S.C. § 1956(h)
`(Conspiracy to Commit Money Laundering)
`.
`,
`Count 9: 18 13.8.0. §§ 1518 & 2
`(Obstruction of Health Care Investigations)
`
`Count 10: 18 U.S.C. §§ 1001(a)(2) 85 2
`(False Statement)
`
`Count 11: 18 U.S.C. §§ 1512(c)(2) & 2
`(Obstruction'of Justice)
`
`Forfeiture Notice
`
`) ) ) ) ) ) ) ) i )
`
`) ) ) ) ) ) ) ) 1 ) )
`
`UNITED STATES OF AMERICA
`
`v.
`
`RODNEY MESQUIAS,
`
`HENRY MCINNIS,
`
`JOSE GARZA,
`
`FRANCISCO PENA,
`-
`Defendants.
`
`THE GRAND JURY CHARGES THAT:
`
`W
`
`At all times reievant to this Indictment, unless‘otherwise stated:
`
`INTRODUCTORY ALLEGATIONS
`
`A.
`
`The Entities
`
`1.
`
`The Meiida Health Care Group, Inc, (“Merida Group”), was a corporation that
`
`‘ purported to provide health care services throughout the State of Texas. The Merida Group’s
`
`corporate headquarters was located at 1514 S. 7-7 Sunshine Strip, Suite 21—B, 78550, Harh'ngen,
`
`Texas, within the Southern District of Texas.
`
`

`

`Case 1:18-cr-00008 Document 1 Filed on 01/09/18 in TXSD Page 2 of 27
`
`2.
`
`The Merida Groupwas affiliated with several entities (“Merida Group’s affiliated
`
`entities”) based throughout-the State of Texas, including, but not limited to, Bee Caring Hospice
`
`Healthcare, Inc, (“Bee Caring” ,
`
`in Harlingen; BRM Home Health, PLLC, (“BRM Home
`
`Healt ”), in Harlingen; Bee Caring Hospice, LLC (“Bee Caring Hospice”), in San Antonio;
`
`Professional Hospice Care (“Professional Hospice”), in Laredo; Merida Health Care Group of San
`Antonio, LLC (“Merida Group of San Antonio”), in San Antonioilllumina, LLC (“Illumina”) in
`Corpus Christi; Virtue Home Health, Inc. (“Virtue Home Health”), in Corpus Christi; Well—Care
`Home Health, Inc.
`(“Well—Care”),
`in Houston; and Excellent Homecare Provider Services
`
`(“Excellent Homecare” , in Sugar Land.
`
`3.
`
`The Merida Group’s affiliated entities were providers. authorized by the Medicare
`
`health care benefit program (“Medicare”) to file claims for reimbursement for covered health care
`services provided to qualified beneficiaries. The Merida Group’s affiliated entities’ primary
`
`business was purportedly providing hospice and home health services for beneficiaries of
`
`Medicare.
`
`4.
`Between in or about 2009 through in or about the filing of this Indictment, the
`' Merida Group’s affiliated. entities submitted claims to Medicare for hospice and home health
`
`services totaling approximately $153,111,986.40, which resulted in payments to the M'erida
`Group’s affiliated entities totaling approximately $120390,290.18 on these claims.
`
`B.
`
`5.
`
`The Conspirators
`
`' Defendant RODNEY MESQUIAS (“RODNEY MESQUIAS”) owned and
`
`controlled the Merida Group and its affiliated entities. RODNEY MESQUIAS served as its
`
`President. . RODNEY MESQUIAS supervised'the overall management of the Merida Group and
`
`its affiliated entities. RODNEY MESQUIAS was a resident of Cameron County, Texas.
`
`

`

`Case 1:18-cr-OOOO8 Document 1 Filed on 01/09/18 in TXSD Page 3 of 27
`
`6.
`
`Defendant HENRY MCINNIS (“HENRY MCINNIS”) was the Chief Executive
`
`Officer of the Merida Group. HENRY MCINNIS managed the day-to-day operations of the
`
`Merida Group and, in part, its affiliated entities. HENRY MCINNIS was a resident of Cameron
`
`County, Texas.
`
`7.
`
`Defendant JOSE GARZA (“JOSE GARZA”) was the operations manager of the
`
`Merida Group. JOSE GARZA assisted with the management of the day—to—day operations of the
`
`Merida Group and, in part, its affiliated entities.
`
`JOSE GARZA was a resident of Cameron
`
`County, Texas.
`
`8.
`
`Defendant . FRANCISCO PENA (“FRANCISCO PENA” or “MAYOR
`
`' PENA”) was the Mayor of Rio Bravo, a city in Webb County, Texas, within the Southern District
`
`of Texas.
`
`'MAYOR PENA was a licensed physician in the State of Texas and Served as the
`
`Medical Director for the Merida Group ’s affiliated entities operating in and around Laredo, Texas.
`
`-MAYOR PENA was a resident of Webb County, Texas.
`
`C.
`
`9.
`
`The Medicare Program
`
`The Medicare Program (“Medicare”) was a federal government health care benefit
`
`program, affecting commerce, which provided benefits to individuals who were over the age of 65
`
`or disabled. Medicare was administered by the Centers for Medicare and Medicaid Services
`
`’ (“CMS”), a federal agency under the United States Department of Health and Human Services.
`
`Medicare was a “health care benefit program” as defined by Title 18, United States Code, Section
`
`24(b). Medicare was subdivided into multiple parts. Part A of Medicare covered hospice services.
`
`10.
`
`Individuals who qualified for Medicare benefits were commonly referred to as
`
`“Medicare beneficiaries.” Each Medicare beneficiary was given a Medicare identification number.
`
`

`

`Case 1:18-cr-OOOO8 Document 1 Filed on 01/09/18 in TXSD Page 4 of 27
`
`D.
`
`Hospice Care
`
`11.
`Hospice care was a set of services meant to provide for the physical, psychosocial,
`spiritual, and emotional needs ofa terminally ill patient or the patient’s family members. Hospice
`
`care was also known as palliative care, which meant care that was'intended to alleviate suffering
`
`rather than to cure illness,
`
`12.
`
`According to Medicare’s regulations, to be eligible to elect hospice care under
`
`Medicare, the patient was required to be entitled to Part A of Medicare and be certified as being
`
`I
`
`terminally ill. An individual was considered to be terminally ill ifthe medical prognosis was that
`the individual’s life expectancy was six months or less if the illness ran. its normal course.
`
`Medicare only covered care provided by (or under arrangements made by) a Medicare certified
`
`hospice.
`
`13.
`
`A hospice company was permitted to admit a patient only on the recommendation
`
`of the hospice medical director in consultation with, or with input from, the patient’s attending
`
`physician, if the patient had one.
`
`In determining whether to certify that a patient was terminally
`
`ill, the hospice medical director was required to consider at least the following information: (1)
`
`diagnosis of the teirninal condition of the patient; (2) other health conditions, whether related or
`
`unrelated to the terminal condition; and'(3) current clinically relevant information supporting all
`
`diagnoses.
`
`14.
`
`The certification of terminal illness was required to be based on the clinical
`
`judgment of the hospice medical director or physician member of the interdisciplinary group and
`
`the patient’s attending physician, ifthe patient had one, regarding the normal course ofthe patient’s
`
`illness. The signed certification of terminal illness had to contain the following: (1) a prognosis
`
`for a life expectancy of six months or less if the terminal illness ran its normal course; (2) clinical
`
`

`

`Case 1:18-cr-OOOO8 Document 1 Filed on 01/09/18 in TXSD Page75 of 27
`
`information and other documentation that supported the prognosis; and (3) a brief narrative
`
`explanation 70f the clinical findings that supported a life expectancy of six months or less.
`
`15.
`
`A beneficiary could be certified in this manner for two ninety-day hospice benefit
`
`periods, or for about six months. Before a beneficiary could be further certified for additional
`
`hospice benefit periods, Medicare required that a licensed physician or nurse practitioner have a
`face—to—face encounter with the beneficiary to determine whether they were still hospice eligible.
`
`The physician or nurse practitioner was required to attest in writing that he or she had a face—to—
`face encounter'with the patient, including the date ofthe visit. The narrative associated with this
`
`third benefit period, and every subsequent sixty—day recertification, needed to include an
`
`explanation of why the clinical findings of the face—to—face encounter supported a life expectancy
`
`of six months or less.-
`
`- 16.
`
`if the Medicare beneficiary (or the beneficiary’s authorized representative) elected ‘
`
`to receive hospice care, the Medicare beneficiary was required to file an election statement with a _
`
`particular hospice company.
`
`E.
`
`Home Health Care
`
`17.
`
`Part B ofthe Medicare program covered certain eligible home health care costs for
`
`medical services. Those medical services were provided by a home health care agency to Medicare
`beneficiaries requiring home health services because of an illness or disability causing them to be
`
`homebound. The Medicare program paid for home health services only if the patient quaiified for
`
`home health care benefits. A beneficiary qualified for home health care benefits only if: (I) the
`
`beneficiarywas confined to the home, also referred to as homebound; (2) the beneficiary was under
`
`the care of a physician who specifically determined that there was a need for home healthcare and
`
`established a Plan of Care; and; (3) the determining physician signed a certification statement that
`
`

`

`Case 1:18-cr-OOOO8 Document 1 Filed on 01/09/18 in'TXSD Page 6 of ‘27
`
`specified the following: (i) the beneficiary needed intermittent skilled nursing services, physical
`
`therapy, or speech therapy; (ii) the beneficiary was confined to the home; (iii) a Plan of Care for
`
`furnishing services was established and periodically reviewed; and (iv) the services were furnished
`
`while the beneficiary was under the care of the physician who established the Plan of Care.
`
`18.
`
`Medicare regulations required home health agencies and hospice companies
`
`providing services to Medicare patients to maintain complete and accurate medical records
`
`reflecting the medical assessment and diagnoses of their patients, as well as records documenting
`
`actual treatment of the patients to whom services were provided and for whom claims for payment
`
`were submitted by the home health agencies and hospice companies.
`
`19.
`
`These medical records were required to be sufficient to permit Medicare, through
`
`its contractors, to review the appropriateness of Medicare payments made to the home health
`
`agency and hospice company.
`
`20.
`
`CMS contracted with Medicare Administrative Contractors (“MACS”) to process
`
`claims for payment. The MAC that processed and paid Medicare Part A and Part B claims in the
`
`State of Texas was Palmetto GBA.
`
`21.
`
`To bill Medicare for services rendered; an authorized provider submitted a claim
`
`form (“FCRlVI 1500”) to Palmetto SBA. When a FORM 1500 was submitted, the provider
`
`certified that: (a) the contents of the form were true, correct and complete; (b) the fonn was
`
`prepared in compliance with the laws and regulations governing Medicare; and (c) the Services
`
`being billed were medically necessary.
`22.
`A Medicare claim for payment was required to set forth, among other things, (a)
`
`the beneficiary’s name and unique Medicare identification number; (b) the item or service
`
`provided; (0) the cost of the item or service; and (d) the name and Unique Physician Identification
`
`

`

`Case 1:18-cr-OOOO8 Document 1 Filed on 01/09/18 in TXSD Page 7 of 27
`
`Number (“UPI-N”) and/or the National Provider Identifier (“NPI”) of the physician who prescribed
`
`or ordered the item or service.
`
`23.
`
`Medicare prohibited offering, paying, soliciting or receiving anything of value to
`
`induce or reward beneficiary referrals or generate Federal health care benefit program business.
`
`Such inducements were known as “kickbacks” and “bribes.” Medicare would not reimburse
`claims for payment ifMedicare knew such claims were based on kickbacks and bribes.
`
`24.
`
`The Grand Jury incorporates by reference and re—alleges paragraphs 1 through 23
`
`I in each Count of this Indictment as if fully set forth therein.
`
`

`

`Case 1:18-cr-OOOO8 Document 1 Filed on 01/09/18 in TXSD Page 8 of 27
`
`COUNT 1
`Conspiracy to Commit Health Care Fraud
`(18 U.S.C § 1349)
`
`THE GRAND TURY FURTHER CHARGES THAT:
`
`25.
`
`From in or about 2009 and continuing through the filing of this Indictment, the
`
`exact dates being unknown to the Grand Jury, in the Southern District of Texas and elsewhere,
`defendants RODNEY MESQUIAS, HENRY MCINNIS, JOSE. GARZA, and FRANCISCO
`
`PENA knowingly and willfully did combine, conspire, Confederate and agree with each other and
`
`others known and unknown to the Grand Jury, to Violate Title 18, United States Code, Section
`
`1347, that is, to execute a scheme and artifice to defraud a health care benefit program affecting
`
`commerce, as defined in Title 18, United States Code, Section 24(b), that is, Medicare, and to
`obtain, bymeans ofmaterially faise and fraudulentpretenses, representations andpromises, money
`
`and property owned by, and under the custody and control of, said health care benefit program, in
`
`connection with the delivery of and payment for health care benefits, items and services.
`
`The Purp‘use of the Conspiracy
`
`26.
`It was a purpose of the conspiracy for defendants RODNEY MESQUIAS,
`HENRY MCINNIS, JOSE GARZA, and MAYOR PENA and others known and unknown to
`
`the Grand Jury, to unlawfully enrich themselves by (a) submitting false and fraudulent claims to
`
`Medicare; (b) concealing the submission of false and fraudulent claims to Medicare and the receipt
`
`and transfer of proceeds from the fraud; and (c) diverting proceeds of the fraud for the personal
`
`use and benefit of defendants and their co—conspirators.
`
`The Manner and Means of the Conspiracy
`
`27.
`
`The manner and means by which the defendants and their co—conspirators sought
`
`to accomplish the object of the conspiracy included, but were not limited to, the following:
`
`

`

`Case 1:18-cr-OOOO8 Document 1 Filed on 01/09/18 in TXSD Page 9 of 27
`
`'
`
`a.
`
`it was a part of the conspiracy that defendants RODNEY MESQUIAS,
`
`HENRY MCINNIS, and JOSE GARZA would apply for and maintain various Medicare
`
`provider numbers associated with the Merida Group’s affiliated entities.
`
`b.
`
`It was further a part of the conspiracy that defendants RODNEY
`
`MESQUIAS, HENRY MCINNIS, JOSE GARZA, and MAYOR PENA would
`
`purportedly provide hospice care and/or home health services through the Merida Group’s
`
`affiliated entities to Medicare beneficiaries knowing that such services were medically
`
`unnecessary and did not comply with Medicare’s requirements for reimbursement.
`
`_
`
`c.
`
`It was further a part of the conspiracy that defendants RODNEY
`
`MESQUIAS, HENRY MCINNIS, JOSE GARZA, and MAYOR PENA would
`knowingly and willfully submit, and cause the submission of, false and fraudulent claims
`to Medicare on behalf of the Merida Group’s affiliated entities for medically unnecessary
`
`services and services that did not complywith Medicare’s requirements forreimbursement.
`d.
`It was further a part of‘ the conspiracy that defendants RODNEY
`
`MESQUIAS, HENRY MCINNIS, JOSE GARZA, and MAYOR PENA would conceal,
`
`and attempt to conceal, their submission of false and fraudulent claims to Medicare by
`
`falsifying, and causing the falsification of, patient records and other documentation related
`
`to services provided by the Merida Group’s affiliated entities.
`
`e.
`
`It was further a part of the conspiraCy that defendants RODNEY
`
`MESQUIAS, HENRY MCINNIS, JOSE GARZA, and MAYOR PENA would cause
`
`Medicare to make payments to the Merida Group’s affiliated entities based upon the
`
`submission of false and fraudulent claims.
`
`

`

`Case 1:18-cr-OOOO8 Document 1 Filed on 01/09/18 in TXSD Page 10 of 27
`
`f.
`
`It was further a part of the conspiracy that defendant RODNEY
`
`MESQUIAS would conceal the ownership of Merida Group’s affiliated entities through
`
`nominee owners.
`
`g.
`It was further a part of the conspiracy that defendants RODNEY
`MESQUIA‘S, HENRY MCINNIS, and JOSE GARZA Would cause kickbacks and bribes
`to be paid to Medical Directors of the Merida Group’s affiliated entities in exchange for
`
`certifying to Medicare that patients qualified for hospice and home health services, when
`
`in fact they did not qualify for such services.
`
`‘ h.
`
`It was further a part of the conspiracy that defendants RODNEY
`
`MESQUIAS, HENRY MCINNIS, and JOSE GARZA would cause kickbacks and bribes
`
`to be paid to Medical Directors for the Merida Group’s affiliated entities in exchange for
`
`patient referrals.
`
`i.
`
`It was further a part of the conspiracy that defendants RODNEY
`
`MESQUIAS, HENRY MCINNIS, and JOSE GARZA would cause kickbacks and bribes
`
`to be paid to Medical Directors for the Merida Group’s affiliated entities in exchange for
`
`signing off on face-to—face sheets.
`
`j.
`
`It was further a part of the conspiracy that defendant MAYOR PENA and
`
`other Medical Directors for the Merida Group’s affiliated entities would receive kickbacks
`
`and bribes in exchange for referring patients to the Merida Group’s affiliated entities for
`
`services, including patients who did not quaiify for such services.
`
`k.
`
`It was further a part of the conspiracy that defendants RODNEY
`
`MESQUIAS, HENRY MCINNIS, JOSE GARZA, and MAYOR PENA would keep
`
`patients on hospice andfor home health services for multiple years in order to increase reVenue from
`
`10
`
`

`

`Case 1:1'8-cr-OOOO8 Document 1 Filed on 01/09/18 in TXSD Page 11 of 27 '
`
`_
`
`Medicare.
`
`1.
`
`It was further a part of the conspiracy that defendants RODNEY MESQUIAS,
`
`HENRY MCINNIS; and JOSE GARZA would cycle patients between and among the Merida
`
`Group’s affiiiated entities for hospice and home health services in order to increase revenue from
`
`Medicare.
`
`m.
`
`It was further a part of the conspiracy that defendant RODNEY NIESQUIAS
`
`would bribe patients with free medication and other items in exchange for enrolling with the Merida
`
`Group’s affiliated entities for services.
`
`11.
`
`It was further a part ofthe conspiracy that defendants RODNEY NIESQUIAS and
`
`HENRY MCINNIS would-transfer the proceeds derived from the conspiracy to purchase luxury
`
`vehicles such as a Porsche, BMW, Mercedes—Benz, Land Rover, and Cadillac Escalade; expensive
`
`jewelry; luxury clothing from high end retailers. such as Louis Vuitton; exotic vacations; season
`
`tickets for premium seating to see the San Antonio Spurs; and exclusive reai estate.
`
`0.
`
`It was finther a part ofthe conspiracy that defendants RODNEY MESQUIAS and
`
`HENRY MCINNIS would cause false and fictitious patient records to be manufactured and
`
`produced to a federal Grand Jury sitting in the Southern District of Texas in response to a federal
`
`Grand Jury subpoena.
`
`p.
`
`It was further a part of the conspiracy that the Merida Group’s affiliated entities
`
`submitted claims to Medicare for hospice and home health services totaling approximately
`
`$153,111,986.40, which resulted in approximately $120,390,290.18 being paid to the Merida
`
`Group’s affiliated entities.
`
`(Allin Violation of Title 18, United States Code, Section 1349.)
`
`ll
`
`

`

`Case 1:18-cr-OOOO8 Document 1 Filed on 01/09/18 in TXSD Page 12 of 27
`
`COUNTS 277'
`Health Care Fraud
`
`(18 U.S.C. §§ 1347 and 2)
`
`-
`
`THE GRAND JURY FURTHER CHARGES THAT:
`
`A.
`
`28.
`
`Introductory Allegations
`
`The Grand Jury incorporates by reference and re—alleges paragraph 27 as though
`
`set forth in its entirety here.
`
`B.
`
`The Scheme to Defraud'
`
`29.
`
`From in or about 2009 and continuing through the filing of this Indictment,
`
`the
`
`exact dates being unknown to the Grand Jury, in the Southern District of Texas and elsewhere,
`
`defendants RODNEY MESQUIAS, HENRY MCINNIS, JOSE GARZA, and FRANCISCO
`
`PENA, along with others known and unknown to the Grand Jury, in connection with the delivery
`
`of and payment for health care benefits, items and services, did knowingly and willfully execute,
`
`and attempt to execute, a scheme and artifice to defraud a health care benefit program affecting
`interstate commerce, as defined in Title 18, United States Code, Section 24(b), that is, Medicare,
`
`and to obtain by means ofmaterially false and fraudulent pretenses, representations, and promises,
`
`money and property owned by and under the custody and control of Medicare, all in Violation of
`
`Title 18, United States Code, Section 1347.
`
`C.
`
`The Execution of the Scheme
`
`- 30.
`
`On or about the below listed dates, in the Southeln District of Texas and elsewhere,
`
`for the purpose of executing the scheme and artifice to defraud, and to aid and'abet the same,
`
`defendants RODNEY NIESQUIAS, HENRY MCINNIS, JOSE GARZA, and FRANCISCO
`
`PENA caused the transmission of the following claims to Medicare, which were for the patients,
`
`approximate dates of service, and approximate amounts listed below.
`
`12
`
`

`

`Case 1:18-cr-00008 Document 1 Filed on 01/09/18 in TXSD‘ Page 13 of 27
`
`
`
`Certification
`
`June 3, 201.4 to
`August 31, 2014
`
`Medicare
`
`Payment _
`
`Bee Caring
`
`
`
`
`
`
`
`Description Patient
`
`Defendant(s)
`fS via
`Entity
`0
`er
`es
`Period
`
`
`
`
`
`
`
`RODNEY
`Hospice
`Professional
`August 14, 2013 to
`MESQUIAS, HENRY
`Services
`.
`.
`$2,567.52
`October 12, 2013
`Hospice
`
`
`
`
`MCINNIS
`‘
`'
`Care
`
`
`
`
`
`
`Hospice
`RODNEY
`December 18, 2013
`Professional
`
`
`MESQUIAS, HENRY
`Services
`$4 089 52
`to March 17, 2014
`Hospice
`
`
`
`Care
`'
`'
`MCINNIS,
`’
`'
`
`
`
`FRANCISCO PENA
`
`
`
`
`
`
`
`Hospice
`November 6, 2013
`RODNEY
`Professional
`
`Services
`.
`.
`$4,304.70
`Hospice
`MESQUIAS, HENRY to February 3, 2014
`
`
`
`'
`Care
`MCINNIS
`
`
`
`
`
`
`
`RODNEY
`Hospice
`
`Services
`.
`.
`$4,448.19
`MESQUIAS, HENRY
`
`
`
`MCINNIS
`
`
`
`
`
`
`RODNEY
`Hospice
`Febiuary 10, 2016 to Bee Caring
`
`
`MESQUIAS, HENRY
`, Services
`_
`_
`April 9, 2016
`$330235
`MCINNIS, JOSE
`
`
`
`
`December 23, 2014
`RODNEY
`Hospice
`Bee Caring
`
`to March 22, 2015
`MESQUIAS, HENRY
`Hospice
`Services
`.
`.
`$1,282.61
`
`
`
`
`MCINNIS
`
`
`
`
`
`
`
`
`GARZA
`
`
`
`
`(Allin violation of Title 18, United States Code, Sections 1347 and 2.)
`
`_13‘
`
`

`

`Case 1:18-cr700008 Document 1 Filed on 01/09/18 in TXSD Page 14 of 27
`
`COUNT 8
`
`Conspiracy to Commit Money Laundering
`(.18 U.S.C. § 1956(h))
`
`THE GRAND JURY FURTHER CHARGES THAT:
`
`A.
`
`31.
`
`Introductory Allegations
`
`The Grand Jury incorporates by reference and rte—alleges paragraph 27 as though
`
`' set forth in its entirety here.
`
`. B.
`
`The Conspiracy
`
`32.
`
`From in or about 2009 through the filing of this Indictment, the exact dates being
`
`unknown to the grand jury, in the Southern District of Texas, and elsewhere, the defendants
`
`RODNEY MESQUIAS, HENRY MCINNIS, JOSE GARZA, and FRANCISO RENA did
`knowingly and willfully combine, conspire, confederate, and agree with each other and others,
`
`known and unknown to the Grand Jury, to commit certain offenses against the United States in
`
`violation of Title 18, United States Code, Sections 1956 and 1957, to Wit:
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`a.
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`I
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`to knowingly conduCt and attempt
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`to conduct
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`financial
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`transactions
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`affecting interstate and foreign commerce, which involved the proceeds of specified
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`unlawful activity, that is, health care fraud and conspiracy to commit health care fraud,
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`with the intentto promote the carrying on of specified unlawful activity, that is health care
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`fraud and conspiracy to commit health care fraud, and that while conducting and attempting
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`to conduct such financial transactions knew that the property involved in the financial
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`transactions represented the proceeds of some form ofunlawful activity in violation ofTitle
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`18, United States Code, Section 1956(a)(1)(A)(i);
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`Case 1:18-cr-OOOO8 Document 1 Filedon 01/09/18 in TXSD Page 15 of 27
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`h.
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`to knowingly conduct and attempt
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`to conduct
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`financial
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`transactions
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`affecting interstate and foreign commerce, which involved proceeds of specified unlawful
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`activity, that is, health care fraud and conspiracy to commit health care fraud, knowing that
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`the transactions were designed in whole or in part to conceal and disguise the nature,
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`location,lsource, ownership, and control of the proceeds of specified unlawful activity, and
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`that while conducting and attempting "to conduct such financial transactions, knew that the
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`property involved in the financial transactions represented the proceeds of some form of
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`unlawful activity, in violation of Title 18, United States Code, Section 1956(a)(1)(B)(i);
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`and
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`c.
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`to knowingly engage and attempt to engage, in monetary transactions by,
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`through or to a financial
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`institution, affecting interstate and foreign commerce, in
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`criminally derived property of a value greater than $10,000, such property having been
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`derived from a specified unlawful activity, that is, health care fraud and conspiracy to
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`commit health care fraud, in violation of Title 18, United States Code, Section 1957.
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`The Manner and Means of the Conspiracy
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`33.
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`The manner and means by which the defendants and their co-conspirators sought
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`to accomplish the objects of the conspiracy included, but were not limited to, the following:
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`a.
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`It was part of the conspiracy that defendants RODNEY MESQUIAS,
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`HENRY MCINNIS, JOSE GARZA, and MAYOR PENA would cause Medicare to
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`remit payment of the proceeds of the defendants” health care fraud scheme into various
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`corporate and personal bank accounts controlled by RODNEY MESQUIAS and his co—
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`conspirators.
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`Case 1:18-cr-OOOO8 Document 1 Filed on 01/09/18 in'TXSD Page 16 of 27
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`b.
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`It was further a part of the conspiracy that defendants RODNEY
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`MESQUIAS, HENRY MCINNIS, JOSE GARZA, and MAYOR PENA would
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`thereafter transfer proceeds of the health care fraud scheme to other bank accounts which
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`they also used to conduct further financial and monetary transactions.
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`0.
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`It was further a part of the conspiracy that defendants RODNEY
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`MESQUIAS, HENRY MCINNIS, and JOSE GARZA would use the proceeds of their
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`health care fraud scheme to pay Merida Group Medical Directors for certifying patients for
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`hospice and home health services that did not qualify for such services.
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`'d.
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`It was further a part of the conspiracy that defendants RODNEY
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`MESQUIAS, HENRY MCINNIS, and JOSE GARZA would use the proceeds of their
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`health care fraud scheme to pay Merida Group Medical Directors for referring patients for
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`hospice and home health services.
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`6.
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`.
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`It was further a part of the conspiracy that defendants RODNEY
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`MESQUIAS and HENRY MCINNIS would mischaracterize and disguise the nature and
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`purpose ofpayments made to Medical Directors by, for example, indicating in the “memo”
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`line of checks that such payments were for “Medical Director feesa” when, in fact, as the
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`defendants then and there well knew, the payments were for illegal kickbacks and
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`fraudulently certifying patients for services.
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`f.
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`It was further a part of the conspiracy that defendant RODNEY
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`MESQUIAS would use nominees to conceal the identities of the true beneficial owners of
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`the Merida Group’s affiliated entities.
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`_ Case 1:18-cr-OOOO8 Docurnent 1 Filed on 01/09/18 in TXSD Page 17 of 27
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`g.
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`It was
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`further a part of the conspiracy that defendant RODNEY
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`MESQUIAS would cause profit distributions to be issued to nominees to conceal the
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`identities of the true beneficial owners of the Merida Group’s affiliated entities.
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`' h.
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`It was further a part of the conspiracy that defendant RODNEY
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`MESQUIAS would ire—invest proceeds ofthe health care fraud scheme into various Merida
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`I Group affiliated entities.
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`i.
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`It was further a part of the conspiracy that defendants RODNEY
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`MESQUIAS, HENRY MCINNIS, JOSE GARZA, and MAYOR PENA would enrich
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`themselves by transferring and converting, or causing the transfer and conversion, of the
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`proceeds of their fraudulent scheme from the Merida Group corporate bank accounts to
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`their own personal use.
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`(All in violation of Title 18, United States Code, Section 1956(h).)
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`Case 1:18-cr-OOOO8 Document 1 Filed on 01/09/18 in TXSD Page 18 of 27
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`COUNT 9
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`Obstruction of Criminal Investigations of Health Care Offenses
`(18 U.S.C. §§ 1518 and 2)
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`THE GRAND IURY FURTHER CHARGES THAT:
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`A.
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`Introductory Allegations
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`34.
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`The Grand Jury incorporates by reference and re—alleges paragraphs 27 and 33 as
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`though set forth in their entirety here.
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`B.
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`The Obstruction
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`- 35.
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`From in or about 2017 through the filing of this Indictment, the exact dates being
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`unknown to the Grand Jury,
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`in the Southern District of Texas and elsewhere, defendant
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`' FRANCISCO PENA, attempted to and did willfully prevent, obstruct, mislead, and delay the
`communication of information and records reiatingto federal health care offenses, that is, Health
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`Care Fraud, in violation of Title 18, United States Code, Section 1347; Conspiracy to Commit
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`Health Care Fraud, in violation of Title 18, United States Code, Section 1349; Conspiracy to Pay
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`and Receive Illegal Kickhacks, in Violation of Title iii-United States Code, Section 371; and
`Payment ofKickbacks in Connection with a Federal Health Care Program, in violation ofTitle 42,
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`United States Code, Section 1320a—7b(b),
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`to agents of the Federal Bureau of Investigation,
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`criminal investigators duly authorized by a department ofthe United States to. conduct and engage
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`in investigations for prosecutions for violations of health care offenses.
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`C.
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`The Criminal Investigation
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`36.
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`Beginning in or about 2016 and continuing through the date of this Indictment, the
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`exact dates being unknown to the Grand Jury, Within the Southern District ofTexas and elsewhere,
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`the Federal Bureau of Investigation (“FBI”) and the Department of Health and Human Services,
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`Office of Inspector General (“HHS—01G” , conducted a criminal investigation into allegations
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`Case 1:18-cr-OOOO8 Document 1 Filed on 01/09/18 in TXSD Page 19 of 27
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`regarding an illegal health care fraud and kickback scheme involving, among others, RODNEY
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`MESQUIAS, HENRY MCINNIS, JOSE GARZA, MAYOR PENA, and the Merida Group’s
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`affiliated entities.
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`37.
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`Confidential Source #1 (“CS—1”) and-Confidential Source #2 (“CS—2”) worked in
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`_
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`the health care industry in the area of hospice services.
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`38.
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`39.
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`Cooperating Witness (“CW—1”) was a resident of Texas.
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`During the investigation, in or about 2017, at City Hall, Office of the Mayor for
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`Rio Bravo, within the Southern District of Texas, CW—l met with MAYOR PENA. During the
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`meeting, MAYOR PENA discussed the manner and methods he uses to make money as a
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`physician. For example, with respect to hospice patients, MAYOR PENA stated that: “the way
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`you make money is by keeping them alive as long as you can.”
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`40.
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`During the investigation, on or about August 3, 2017, at City Hall, Office of the
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`Mayor for Rio Bravo, within the Southern District of Texas, MAYOR PENA met with CS—i and
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`CS—2. CS—l and CS—2 gave MAYOR PENA $2,500 in cash kickbacks in exchange for patient -
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`referrals for hospice services. During the meeting, among other things, MAYOR PENA told CS—
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`1 and CS~2 that he was expecting more money, to which CS—l and CS—2 stated that they would
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`pay MAYOR PENA an additional $2,500 in cash‘kickbacks at a future meeting.
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`41.
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`During the investigation, on or ab out August 18, 2017, at MAYOR PENA’s clinic,
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`within the Southern District of Texas, MAYOR PENA met again with CS—i and CS—‘2. During
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`the meeting, CS-l and CS—2 gave an additional $2,500 in cash kickbacks to MAYOR PENA in
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`exchange for patient referrals for hospice services. During the meeting, MAYOR PENA
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`discussed various topics, including MAYOR PENA’S prior business relationship with the Merida
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`Group’s affiliated entities.
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`l9
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`Case 1:18-cr-00008 Document 1 Filed on 01/09/18 in TXSD Page 20 of 27
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`42.
`During the investigation, on or about October 27, 2017, FBI Special Agents
`interviewed MAYOR PENA at MAYOR PENA’s clinic, within the Southern District ofTexas.
`FBI Agents advised MAYOR PENA that making a false statement to a federal agent was a federal
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`crime. FBI Agents further advised MAYOR PENA that they were conducting an investigation
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`into MAYOR PENA’s involvement in referring patients in exchange for illegal kickbacks.
`During the interview, MAYOR PENA made several statements, including the following:
`i
`
`a.
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`MAYOR PENA denied ever accepting kickbacks and payments in
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`exchange for patient referrals.
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`b.
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`MAYOR PENA stated that he was a Medical Director for the Merida
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`, Group, that the Merida Group owed MAYOR PENA thousands of dollars, and that the
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`Merida Group could not handle the business.
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`c.
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`MAYOR PENA denied ever taking measures to extend a patient’s life.
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`43.
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`During the investigation, two days after the FBI interview of MAYOR PENA, on
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`or about October 29, 2017, MAYOR PENA contacted CS—l by telephone. During the phone call,
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`MAYOR PENA informed CS—l that the FBI had interviewed MAYOR PENA. MAYOR PENA
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`further stated that the FBI questioned MAYOR PENA about illegal kickbacks. MAYOR PENA
`asked CS—l whether the FBI had contacted CS—l. MAYOR PENA then told CS—l that they would
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`have to take steps to conceal the kickbacks that (38—1 and CS—2 had-paid to MAYOR PENA for
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`patient referrals, and requested that CS—l m