The Feds Are Watching: Team Work Ready Execs Given Major Federal Sentences
The federal government seems to have a microscope focused squarely on African Americans in the city of Houston, as yet another group of individuals in our community have been hit with major sentences after being convicted by a federal jury.
The Forward Times reported back in 2015, that Earnest Gibson III, his son, Earnest Gibson IV, and Regina Askew, were all sentenced to 45 years, 20 years and 12 years in prison, respectively, for their roles in a $158 million Medicare fraud scheme involving Riverside General Hospital. Just a few weeks ago, the Forward Times reported on the case surrounding Houston Community College (HCC) trustee Chris Oliver, who pleaded guilty to federal bribery charges and is facing a maximum of 10 years in prison for the crime.
Now, in a case the Forward Times has been following since 2016, we have learned that two local executives from the company Team Work Ready (TWR) were formally sentenced this past Friday. They have been ordered to federal prison for conspiracy, health care fraud, wire fraud and money laundering for their roles in a nationwide Worker’s Compensation fraud scheme.
U.S. District Judge Ewing Werlein Jr., who presided over the trial, handed TWR vice president of operations, Frankie Lee Sanders, a 300-month (25 year) sentence, while TWR chief financial officer, Pamela Annette Rose, will serve a 120-month (10 year) term. They will both also be required to serve a term of three years of supervised release following completion of the prison terms.
Prior to the sentencing phase, another federal jury deliberated for 14 hours following a 16-day trial on Oct. 17, 2016, before convicting TWR chief executive officer (CEO) Jeffrey Eugene Rose Sr., who is scheduled for sentencing this upcoming October.
In handing down the sentence, Judge Werlein noted the seriousness of health care fraud and the need to deter those involved in this crime. The evidence presented at the hearing included reference to various audio recordings obtained during the investigation and large volumes of documents obtained during the investigation. Pamela Rose was ordered to pay $14,537,548.54 in restitution, while Sanders is to pay $13,365,525.38.
“Sanders and Ms. Rose will now lose their freedom for defrauding U.S. Taxpayers for personal monetary gain,” said Special Agent in Charge Rick Goss of IRS-Criminal Investigation (CI). “These types of schemes not only undermine federal programs but also take money and benefits from those patients who need it the most.”
Sanders is no stranger to being in trouble with the federal government, in that he recently served 18 months in a federal prison, after being convicted of submitting fake vouchers and generating falsified hotel receipts, including one for the Hilton Garden Inn in New Orleans, which was actually closed as a result of damages suffered from Hurricane Katrina. Prior to his conviction, Sanders had been with the American Postal Workers Union (APWU) since 1982, and had been southern regional coordinator of the APWU based in Houston. He was part of the union team designated to deal with Katrina issues, when he made the decision to submit the fake vouchers.
Many Houstonians were familiar with TWR – a company that was mostly recognized for its extremely popular radio broadcasts on local Black radio stations, catchy jingles and commercials. All of that came to an end in October 2016, after the federal government took the case to trial before a federal jury, and the TWR trio were found guilty.
TWR had clinics in five states including Federal Work Ready in Houston, Alamo Work Ready in San Antonio and Bayou Work Ready in New Orleans, Louisiana. During the criminal trial, the jury heard testimony from 38 witnesses including former patients of TWR clinics, former employees of TWR clinics, various experts and special agents from the USPS-OIG and IRS-CI. According to testimony, TWR submitted approximately $9.6 million in false and fraudulent claims from four of its clinics for physical therapy services that were not provided. The claims were submitted under the Federal Employees Compensation Act (FECA) health care benefit program which is administered by the DOL – OWCP.
“Team Work Ready’s CFO, vice president of operations and others participated in a fraudulent scheme to submit approximately $9 million in false claims to the DOL – Office of Workers Compensation Programs (OWCP) for healthcare services not provided to federal workers,” said Special Agent in Charge Steven Grell of the U.S. Department of Labor (DOL) – OIG. “Rose, Sanders and their co-conspirators stole money intended to pay for legitimate patient care for federal workers suffering from work-related injuries. We will continue to work with our law enforcement partners to protect all Department of Labor programs.”
Patients from four TWR clinics testified that they did not receive the one-on-one physical therapy services paid for by DOL-OWCP under FECA. Rather, they stated that they exercised independently on treadmills, bicycles and elliptical machines with the Nintendo Wii game and with other pieces of exercise equipment. According to court records, the San Antonio clinic also had an electronic massage chair for patients. One patient from Houston testified that she felt that some of the exercises she was asked to do had nothing to do with her carpal tunnel wrist injury, specifically the treadmill. Another patient from the San Antonio clinic testified that unlicensed staff told him to do exercises on both of his arms, although he only injured his left elbow and to use the electronic massage chair and the treadmill for his injury.
The federal jury also heard testimony from 11 former TWR employees, including unlicensed therapy technicians from the Houston and New Orleans clinics, a case manager and two licensed chiropractors. The employees reported 30 – 60 patients a day at the Houston clinic and said there were times when they did not know what the patients were doing in the main treatment area because they were busy in the back doing massages, electrical stimulation treatments and ultrasound treatments. The employees testified that they did not perform all the one-on-one services documented on patient treatment notes and admitted they frequently completed the patient treatment notes at the end of the day by following a “cheat sheet” and asking each other and the patients what activities had been done. Patients at the New Orleans clinic were instructed to go back to the therapy room to begin doing exercises by themselves. Various individuals described the treatment as “like a gym.”
The federal jury also heard from two federal agents who went undercover as “injured federal employees” at the Houston and New Orleans clinics. The jury watched portions of video recordings covertly made by the undercover agents that showed patients independently exercising and receiving care from unlicensed and obviously untrained staff. One of the licensed chiropractors testified that she began covertly recording meetings with the defendants in December 2012. The federal jury heard several of the recordings, including one in which the federal government made the case that the defendants tried to coerce the chiropractor to order medically unnecessary treatment so TWR could make a profit.
TWR’s former chief operating officer (COO) also testified about a phone call he received from CFO Rose on July 11, 2013 – the day federal agents executed search warrants at TWR clinics in Houston and New Orleans. The COO said CFO Rose instructed him to meet her and CEO Rose at a local Chase bank where they moved money out of the TWR accounts to hide it from the federal government. An IRS-CI special agent traced the $700,000 transferred out of TWR bank accounts, into a transportation company account owned by Mr. and Mrs. Rose and then out of that account via a cashier’s check in the name of two “shell” businesses not associated with TWR but also owned by Mr. and Mrs. Rose.
One of the telling statements from the federal government as it relates to how they are cracking down on individuals for federal crimes was delivered by Special Agent in Charge Maximo Eamiguel of the U.S. Postal Service – Office of Inspector General (USPS-OIG), when he said:
“Fraud committed against federal benefit programs is a serious offense that will not be tolerated. The USPS-OIG, along with our law enforcement partners, will continue to vigorously investigate these types of cases in order to protect the Office of Workers’ Compensation Programs and United States Postal Service from further fraud and abuse.”
The Forward Times will continue to monitor this federal case and update you on the sentencing on Jeffrey Eugene Rose in October. Rose faces up to 20 years in prison when sentenced in October, but in seeing the sentence that Sanders received, it could be more. Stay tuned!