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Charges announced in 3 COVID-19 related fraud cases in Arizona

Posted at 4:49 PM, May 27, 2020
and last updated 2020-05-27 21:49:40-04

PHOENIX — Millions of dollars paid out in false insurance claims -- that's what the Department of Justice says has a handful of Arizona business owners facing charges.

"These cases really hit at the integrity of the healthcare system itself," said Michael Bailey, the US Attorney for the District of Arizona.

From a Valley medical clinic advertising free COVID-19 testing, to billing insurance for other unneeded tests, to medical transport companies billing for non-emergency trips that never happened.

Bailey says they are cases of outright fraud, with the companies taking advantage of COVID-19 uncertainties.

"We're trying to keep an eye out and investigate all coronavirus and COVID-19 fraud - whether that relates to individuals being defrauded, or companies or the government being defrauded, or the taxpayers," said Bailey.

The first case in Gilbert involves Harmony Medical Care, a clinic offering a variety of medical services.

According to the complaint, the company used social media to push free COVID tests, but there was a catch.

"Low and behold, when you came in for free testing they gave you a whole bunch of services that you didn't ask for that they did in fact turn around and end up billing AHCCCS and Medicare for," said Bailey.

Now, Bailey says they called it a "comprehensive whole-body assessment" -- something not needed to test someone for the coronavirus.

The CEO Jeramiah Faber is facing one count of health care fraud and one count of money laundering.

It's unclear how much money they are accused of profiting from by using this tactic, but if you are told you need other tests to get tested for COVID it could be a red flag.

Bailey says the other two big cases this week involve medical transport companies billing for rides that never happened.

The companies served remote areas of the Navajo Nation that were under lockdown to stop the spread of the virus.

"In the ordinary times they might have actually conducted, but in these times because of the lockdown and that kind of thing they did not conduct," said Bailey. "In one case, we had 1,500 transports, but we allege they did not happen... and in the other case, somewhere around 9,000 transports."

The complaint alleges the owners of Freedom AZ, LLC in connection with the owners of A&N Services, LLC illegally profited more than $2.75 million. In a second case, Philia Homecare, LLC working with COS 1, LLC made $450,000 in a single month.

Six people connected to those companies have been charged with conspiring to commit health care fraud.

At this point, these charges remain allegations that have to be proven in court. The DOJ says they came to light due to the Coronavirus Task Force formed by the DOJ, the Attorney General's Office, the FBI and local agencies.

While these are a good start, we are continuing to push these leaders on what is being done to help protect the individual consumers.

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