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By Patrick J. Queenan and Autumn Klick Over the past year, in New Hampshire and Northern New England, federal law enforcement agencies have increased investigations and prosecutions involving white-collar crime. In part, this is due to a change in priorities and the Department of Justice, Fraud Section’s expansion of its health care fraud unit operating in the District of New Hampshire.
Patrick J. Queenan Autumn Klick In New Hampshire, the United States Attorney’s Office has traditionally partnered with the Federal Bureau of Investigation, Department of Health and Human Services Office of Inspector General, Internal Revenue Service Criminal Investigations, and other federal agencies to investigate and prosecute white-collar offenses. Recently, the Fraud Section partnered with the local prosecutors and assigned white-collar prosecutors to bring health care fraud cases in Northern New England.
Despite a depletion in force across many federal agencies, the Fraud Section has increased its footprint and now has a Strike Force dedicated to fraud and white-collar offenses. As a result, over the past year, federal prosecutors in New Hampshire have charged a wide range of cases, from international investment fraud and health care scams to tax evasion and pandemic relief abuse. These cases demonstrate a history of the federal government’s commitment to pursuing complex financial crimes.
One recent high-profile indictment involved an alleged international conspiracy to defraud investors out of more than $10 million. According to charging documents, eight defendants allegedly organized a scheme using shell companies and manipulated investment platforms to carry out fraud on a global scale. The individuals allegedly recruited people to pose as legitimate participants in market research surveys and used fabricated responses to deceive clients and investors.
This ongoing case underscores an increase in internet-based crimes that operate across jurisdictions. Federal health care programs have been a major target for fraud in recent years, causing federal law enforcement agencies to prioritize these cases. In separate cases brought in the District of New Hampshire, individuals connected to different health care businesses admitted to orchestrating schemes that collectively defrauded Medicare of more than $79 million.
One case involved fraudulent billing for unnecessary medical equipment. Another involved a physician assistant who pleaded guilty to a $7.3 million Medicare fraud scheme encompassing the signing of unnecessary cancer genetic testing orders for telemedicine consultations.
These are some of the largest cases (in terms of loss and impact on federal health care benefit programs) filed in this district in years. The misuse of pandemic-related aid programs was on the docket within the last year. In one case, a New Hampshire resident received a prison sentence of over 12 years for submitting fraudulent applications for COVID-19 relief using stolen identities.
Another recently sentenced defendant had a long history of identity-based fraud, including the use of stolen personal information to obtain CARES Act loans, unemployment benefits, and lines of credit. The individual was sentenced to seven years in prison for multiple fraud schemes totaling more than $2 million. For many of these offenses, the government enjoys a six-year statute of limitations, and, as a result, will continue to prosecute pandemic-relief fraud cases for the next few years.
Tax-related offenses have been a priority for enforcement. In one instance, a former executive of a New Hampshire software startup was sentenced to 30 months in federal prison for willfully failing to pay various taxes. The individual withheld payroll taxes from employees but did not remit them to the IRS, nor did he file personal tax returns despite receiving a substantial income of approximately $250,000 annually.
The court also ordered the former executive to pay over $600,000 in restitution and imposed a $15,000 monetary fine. It has been widely reported that the Department of Justice is intensifying its focus on prosecuting crimes related to immigration, cartel-related crime, and national security. This has resulted in shifting resources away from white-collar crime initiatives (most notably bribery and cryptocurrency offenses).
In the realm of health care fraud, however, the Department continues to pursue significant cases. While the enforcement priorities may be shifting, health care fraud enforcement and national security cases are expected to remain a core part of the Department of Justice’s broader strategy..
