A multimillion-dollar home healthcare company and its owner were convicted of Medicare fraud last week after a 14-day federal court trial in Savannah, Ga.
A jury of eight women and four men deliberated for nearly seven hours over two days before returning its verdict Feb. 4. It found Robert "Jack" Mills of St. Simons Island, Ga., guilty of conspiracy, mail fraud, making false statements, obtaining illegal Medicare program kickbacks, witness tampering and money laundering.
ABC Home Health Services, now known as First American Health Care of Georgia, was convicted on 72 counts similar to the charges against Mills. His wife, Margie, the company's co-owner, was convicted on two counts of making false statements.
Arthur C. DeLozier, the company's chief accountant, was found innocent on all 36 charges against him, and Mills was found innocent on two tax charges.
The defendants will be sentenced under the federal guidelines, but U.S. District Judge B. Avant Edenfield set no sentencing date. Mills faces a maximum of 520 years in prison and $25 million in fines. His wife could get a maximum 10 years and $500,000. The company could be fined and ordered to pay restitution.
Mills and his wife will remain free on bond pending sentencing. Prosecutors asked for a high bond, saying that Mills posed a risk of fleeing, citing his wealth and being found guilty of tampering with witnesses.
Edenfield set bond at $500,000 for Mills and $100,000 for his wife. The judge granted the couple unrestricted rights to travel within Georgia but stipulated that when Mills must leave the state on business, he has to call the U.S. Probation Office for permission.
Mills grimaced quickly when the guilty verdict was announced and his wife appeared to flicker a brief smile of relief when she was acquitted of 17 of the 19 charges she faced.
Although the couple declined comment, after court Jack Mills approached his son, Joel, and said, "I'm stunned. Literally stunned. I can't believe it."
The company, based in Brunswick, provides nurses and aides for in-home healthcare.
Mills, a former copier salesman, began ABC Home Health Care with his wife, then a nurse, 19 years ago with a single storefront in Jacksonville, Fla., called First Florida Home Care.
The company prospered and branched out to include offices under its present name in 23 states. It grossed nearly $400 million from Medicare in 1995.
An August 1995 indictment charged that the company billed Medicare millions in improper charges through its annual cost reports.
The defendants were charged with conspiring to cheat Medicare out of more than $1 million in reimbursements from about 1990 to 1994.
The defense argued that Medicare regulations are so vague and voluminous that it's hard to tell what is legal. The company also contended it was targeted by government-hired auditors after it refused to do them favors.
A fourth defendant, James H. McManus, a former corporate pilot for the company, pleaded guilty to conspiracy charges earlier in the case.
He admitted he had flown the couple and company employees on personal trips later reported to and reimbursed by Medicare as business-related.
"The U.S. attorney's office feels that justice was done with the jury's verdict," said Tom Withers, assistant U.S. attorney in Savannah. "We accept the jury's verdict and are pleased with it."
Assistant U.S. Attorney Fred Kramer told Edenfield that prosecutors were concerned that managers in the company loyal to the Mills would, without the couple's knowledge, possibly retaliate against employees who testified in the case.
The company's corporate attorney, Frank Smith, suggested a companywide memorandum be issued against such actions, outside of normal personnel matters, and the judge made that a part of the court's official ruling.
"If someone thinks they have been fired because of retaliation, the court will look at it," Edenfield said.
In a letter to the editor published in MODERN HEALTHCARE last year (July 3, 1995, p. 25), Mills contended that the government was conducting a publicity campaign against the home-care industry in general and his company in particular. He maintained that the press had fallen victim to a "transparent scam" in reporting the federal investigation of ABC.
The conviction brought reaction from Washington, where Sen. William Cohen (R-Maine) said it showed the need to pass anti-fraud legislation he has sponsored.
"Today's action against ABC Home Health Services sends a clear message to would-be con artists that getting caught committing healthcare fraud carries a stiff price," Cohen said.
"The list of personal items this company allegedly billed to Medicare is shocking," he said. "I am glad that the federal jury was able to see the damage companies like this one do to Medicare and the healthcare system as a whole. We must work to make even tougher laws available to prosecutors and law enforcement officials," he added.