RICHMOND, Va. (WRIC) — The owner of a Midlothian-based company was sentenced Monday to 50 months in prison for defrauding the Virginia Medicaid program out of nearly $3 million.
According to court documents, Katrina Lynch, 39, of Cypress, Texas, owned and operated A Tender Heart, LLC. The home healthcare service company was reportedly enrolled with the Virginia Medicaid Program as a service facilitator, a provider that ensures Medicaid recipients receive needed and required services.
“For over six years, the defendant stole over $2.8 million from the Virginia Medicaid program, using those funds to go on a spending spree at casinos, luxury retail stores, and foreign travel destinations,” Acting U.S. Attorney for the Eastern District of Virginia (EDVA) Raj Parekh said. “This prosecution underscores our steadfast commitment to protecting essential government resources that are intended to help those in need of this critical assistance throughout our communities.”
According to a release, between 2011 and 2018, Lynch routinely submitted bills to Medicaid for services that her company never provided. For example, the U.S. Attorney’s Office for the Eastern District of Virginia reported that Lynch submitted bills to Medicaid for services supposedly provided to Medicaid recipients who had died, recipients who were hospitalized, recipients who transferred to other service facilitators, and recipients who had not been visited by any company employees for months.
Due to these fraudulent submissions, prosecutors said that Medicaid paid Lynch at least $2,816,633 to which she was not entitled.
“The Medicaid system is a lifeline for so many who depend on those funds to receive the necessary medical care they would otherwise not be able to afford. The FBI will not take an idle approach to the abuse of government programs,” Special Agent in Charge of the FBI’s Richmond Field Office Stanley Meador said. “We will work with our investigative partners to hold criminals accountable; and demonstrate to the American people we are committed to upholding the law and seeking justice for those who need it.”
According to a release, Lynch received warnings about her billing practices during two audits performed at the direction of the Virginia Department of Medical Assistant Service (DMAS). As a result of the audits, A Tender Heart was required to repay more than $335,000 to Virginia Medicaid. But Lynch continued her fraudulent activity after said audits.
Prosecutors said that Lynch used the fraudulently obtained Medicaid funds to engage in personal expenditures, including overseas travel, restaurants, gambling, cosmetic surgery, jewelry and vehicles.
“We must hold fraudulent healthcare providers accountable, not only because they are stealing from our healthcare system but they are also stealing from Virginia taxpayers in the process,” Virginia Attorney General Mark Herring said. “I want to thank my hardworking Medicaid Fraud Control Unit for their work on this case, as well as our state and federal partners for their collaboration.”