Case against couple accused of $45M health care fraud, keeping indentured servant fizzles – Chicago Tribune
A $45 million health care fraud case against a young north suburban couple has fizzled in stunning fashion in the midst of trial after federal prosecutors admittedly failed to hand over key evidence to defense lawyers.
Richard and Maribel Tinimbang and two alleged co-conspirators have been on trial for the past five weeks on charges alleging they paid kickbacks for patient referrals and fraudulently inflated Medicare bills for their home health care businesses between 2008 and 2014.
The couple had allegedly used the ill-gotten gains to fund a lavish lifestyle, including a 5,000-square-foot Lincolnwood mansion, a small fleet of luxury SUVs and at least $1 million in Facebook stock, according to the charges. They also faced separate charges alleging they kept a nanny from their native Philippines in the U.S. as an indentured servant.
The Tinimbangs likely would have faced a decade or more in prison if convicted on the most serious charges. But on Wednesday, Richard Tinimbang is instead expected to plead guilty to low-level felony counts that call for less than a year behind bars. His wife is expected to plead guilty to a misdemeanor and likely will see no jail time at all.
Monette Mojares, a longtime nurse and supervisor in one of the Tinimbangs’ companies, is slated to plead guilty to one minor felony count. Meanwhile, prosecutors agreed to drop the prosecution of Vivian Baldemor, a nurse accused of recruiting patients into the scheme, as long as she stays out of trouble, according to her lawyer Michael Leonard.
The plea deals would mark an embarrassing end of a prosecution touted in 2015 by then-Attorney General Loretta Lynch as a significant part of a nationwide crackdown she called “the largest criminal health care fraud takedown” in the department’s history. The U.S. Justice Department‘s health care fraud task force out of Washington led the prosecution at the trial in Chicago.
A spokesman for the Justice Department’s criminal division had no comment Tuesday on the fallout.
The government’s case began to unravel last week after defense lawyers learned that prosecutors had failed to turn over grand jury transcripts of testimony by an IRS agent who was about to testify that the couple conspired to launder the proceeds of their illegal business, court records show.
That revelation in turn exposed other instances in which prosecutors had either withheld grand jury testimony or misrepresented what witnesses had told investigators about the Tinimbangs’ business practices, court records show.
At least one of the witnesses — a Health and Human Services agent — had already testified earlier in the trial, leaving defense lawyers unable to cross-examine him at the time on discrepancies in his grand jury statements.
With defense attorneys calling for sanctions, U.S. District Judge Rebecca Pallmeyer put a halt to the trial while Justice Department prosecutors tried to figure out what went wrong and how to fix it if possible.
To try to avoid scuttling the trial altogether, prosecutors first dropped the money laundering count against the couple, records show.
But in a hearing last Wednesday outside the presence of the jury, attorney Theodore Poulos, who represents Richard Tinimbang, asked the judge for additional sanctions because of what he described as the “snowballing effect” of the prosecutors’ misconduct.
“Over the last two weeks now, it’s been one thing after another involving exculpatory material, significant material that comes trickling out,” Poulos said, according to a transcript. “And every time the government has an excuse.”
The lead prosecutor, Justice Department trial attorney Brooke Harper, apologized for not turning over grand jury transcripts of the IRS agent, saying, “If I had to go back in time and do all the grand jury transcripts differently, I would do it differently.”
But she denied any of it was intentional and said witnesses could be made available again for more cross-examination if defense attorneys wished.
The judge, however, said there was no question that Harper had an obligation to turn the materials over before trial and that “a conscious decision to the contrary is inexplicable.”
“This is not just a matter of, ‘If I had it to do over again, I might do things differently,’” Pallmeyer said. “This is a failure to produce material that’s required by statute to be produced. I can’t see it any other way.”
On Thursday, Allan Medina, the assistant chief of the health care fraud task force, appeared in court to try to patch over the dispute, records show. He told Pallmeyer that prosecutors would agree not to call the IRS agent to the witness stand at all and would make the Health and Human Services agent who had already testified available for more cross-examination, according to a transcript.
Medina also apologized to both the judge and opposing counsel.
“This is serious, and I understand that completely,” Medina said, according to the transcript.
Attorney Daniel Collins, who represents Maribel Tinimbang, said he needed more time to figure out whether to ask for a “more severe remedy,” the transcript showed.
Plea negotiations began on Friday and continued into this week. On Monday, Medina told the judge that both sides “have agreed to the essential elements of a resolution in this case,” but asked for more time to tweak language in the plea agreements.
“Does this mean I should call off the jurors?” Pallmeyer asked.
The defendants could plead guilty to the lesser charges as soon as Wednesday morning.
According to the indictment, the couple’s business, Patients First Physical Therapy, purported to provide in-home therapy services to patients of three other companies in which their family also had a stake, Donnarich Home Health Care, Josdan Home Health Care and Pathways Home Health Care.
But the patients they treated often weren’t as sick as the Tinimbangs claimed, federal authorities alleged. In many cases, the couple and their employees falsified records to make patients appear more ill than they actually were. In others, they paid kickbacks of up to $1,200 for patient referrals, the charges alleged.
Several nurses who worked for the Tinimbangs have previously pleaded guilty to their roles in the Medicare fraud scheme, as did a marketer, Sherwin Cubelo, who admitted he received $300,000 in bribes and kickbacks from the Tinimbangs for patient referrals.