Houston Physical Therapy Execs convicted of $9.6 million in false, fraudulent OWCP claims for postal workers

uspsoigCEO, CFO and VP Convicted in Nationwide Worker’s Compensation Fraud Scheme

HOUSTON – Several officials with Team Work Ready (TWR) have been convicted of conspiracy, health care fraud, wire fraud and money laundering, announced U.S. Attorney Kenneth Magidson. 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.

The federal jury deliberated for 14 hours following a 16-day trial before convicting CEO Jeffrey Eugene Rose Sr., 54, chief financial officer Pamela Annette Rose, 55, along with the clinic’s vice president of operations Frankie Lee Sanders, 55. The verdicts were returned late yesterday.

Today, the same jury heard evidence on forfeiture matters and returned a special verdict forfeiting $220,807, an annuity contract and real property.

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 U.S. Postal Service – Office of Inspector General (USPS-OIG) and IRS – Criminal Investigation (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 Department of Labor – Office of Worker’s Compensation Program (DOL-OWCP).

DOL-OWCP’s chief fiscal officer explained to the jury at the start of the trial that FECA does not pay for professional services performed by unlicensed aides which is why DOL-OWCP requires the enrollment of all licensed professionals providing services to injured federal employees, including copies of professional licenses. He testified that the FECA program only considers chiropractors as physicians when they treat spinal subluxation. Otherwise, chiropractors are considered equivalent to physical therapists and may provide physical therapy under the direction of, and as prescribed by, a medical doctor. Specifically, in relation to this case, the DOL-OWCP would not have paid millions of dollars for the physical therapy services billed by TWR if they had known that the services were not provided as described in the claims submitted to DOL-OWCP.

Witnesses testified that the company submitted $9.6 million in claims for postal workers getting treated at four clinics for physical therapy services that were not provided.

The defendants were found guilty of billing for one-on-one physical therapy, when experts testified that the patients said they simply used treadmills, bicycles and elliptical machines, the Nintendo Wii game and other exercise equipment.

According to witnesses, a patient at the San Antonio clinic was told to use the massage chair for therapy. According to court documents, patients at the packed New Orleans clinic saw the treatment program as the equivalent of a gym. Read more

The claims TWR submitted falsely and fraudulently described skilled one-on-one physical therapy services provided by a licensed chiropractor. 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. 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 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 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 jury heard several of the recordings, including one in which 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) 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.

Sanders and Jeffrey Rose have been in custody where they will remain pending sentencing, set for January 2017. Pamela Rose was permitted to remain on bond.

The possible punishment for a conviction of conspiracy to commit health care fraud, health care fraud and engaging in a monetary transaction in criminally derived property is up to 10 years in federal prison and a $250,000 fine. They also face a maximum of 20 years in prison for the wire fraud and money laundering convictions.

This case was the result of a joint investigation with the USPS – OIG, DOL – OIG, IRS – CI, Department of Veterans Affairs – OIG, and Department of Homeland Security – OIG. Assistant United States Attorneys (AUSA) Julie Redlinger and Daniel Rodriguez prosecuted the case. AUSA Kristine Rollinson handled the forfeiture matters.

2 thoughts on “Houston Physical Therapy Execs convicted of $9.6 million in false, fraudulent OWCP claims for postal workers

    • ABSOLUTELY NOTHING WILL HAPPEN. THEY ARE ABSOLUTELY ABOVE THE LAW. I PROVED MY OWCP CLAIMS EXAMINER COMMITTED BLATANT FRAUD BY NOT PAYING THE HEALTH INSURANCE PREMIUMS DEDUCTED FROM MY OWCP CHECK TO BLUE CROSS/BLUE SHIELD. BLUE CROSS CANCELLED ME FOR NON RECEIPT OF PREMIUMS. BLUE CROSS DID NOT RECEIVE THE MONEY AND I WAS NEVER REFUNDED THE PREMIUMS FOR THE MONTHS THAT I DID NOT HAVE HEALTH INSURANCE. THE CODES WERE NEVER CORRECTED WITH PAYROLL WHICH CAUSED ME TO HAVE TO WORK 5 ADDITIONAL YRS SO I COULD RETIRE WITH MEDICAL INS. REGULATION STATES YOU MUST HAVE PAID FOR 5 CONSECUTIVE YRS WITHOUT A BREAK IN PMTS IN ORDER TO HAVE MED INS IN RETIREMENT. WHAT HAPPENED TO MY MONEY, I STILL ASK. OWCP KEPT MY MONEY. OWCP CHEATED ME ON MY PAYROLL ALSO. THEY REFUSED TO CORRECT AND RECTIFY. WHEN YOU TAKE THE WEEKLY AMOUNT TIMES 4 WKS THERE IS ONLY ONE CORRECT ANSWER. THE COMPUTER FORMULA WOULD HAVE TO BE MANUALLY CHANGED IN ORDER FOR THE ANSWER TO BE DIFFERENT OR SIGNIFICANTLY LESS. IF YOU TAKE MY CASE TIMES ALL THE ANNUITANTS ON THE OWCP ROLLS, ONE WOULD ASSUME THAT OWCP SAVED MILLIONS OF DOLLARS. THE STORIES I COULD TELL!!! DOL IS THE ANTICHRIST. THE DEVIL DRAPED WITH AN AMERICAN FLAG PROTECTED AND SHIELDED BY OUR CORRUPT GOVERNMENT WITH AN EYE ON MY HARD EARNED DOLLAR. WHEN I COMPLAINED TO MY CONGRESSMAN ABOUT MY CLAIMS EXAMINER NOT PAYING MY MEDICAL BILLS WHICH WERE ABOUT TO BE TURNED OVER TO COLLECTIONS WHICH I WOULD THEN BE RESPONSIBLE FOR THE BILLS, WITHIN THE WEEK I WAS TURNED OVER TO THE DOL-OIG FOR FRAUD. I WAS ARRESTED. MY PICTURE WAS BLASTED ON THE NEWS AND INTERNET. I WAS CHARGED WITH 2 FELONIES (249 COUNTS). I SUBMITTED ALL OF THE EVIDENCE TO PROVE MY CASE. THE DOL AND USPS WERE LIVID I WOULD NOT ACCEPT A PLEA DEAL. I WAS THEN CHARGED WITH A 3RD FELONY. I GATHERED MORE EVIDENCE. I PROVED MY CASE AND IT WAS EVENTUALLY DROPPED BY THE DA FOR LACK OF EVIDENCE OR SHOULD I SAY NO EVIDENCE. DEPT OF LABOR AND USPS DID NOT SUBMIT ONE SCRAP OF EVIDENCE TO MY ATTORNEY. WHAT A WITCH HUNT THAT WAS ALL ABOUT THE MONEY. THE CALIFORNIA DEPT OF INSURANCE, DEPT OF LABOR, USPS AND OWCP NEVER PUT A STATEMENT IN THE PAPER OR ON THE INTERNET INDICATING THAT THEY HAD NO CASE REALLY OR THAT THEY DID NOT GET A CONVICTION. NO APOLOGY FOR WASTING 1 1/2 YRS OF MY TIME AND MY MONEY FOR LEGAL COSTS. THE MONEY AMOUNT THEY CLAIM I EMBEZZLED (I BELIEVE ALMOST $80,000.00) WAS NEVER FULLY JUSTIFIED TO ME. I BELIEVE THEY PULLED THE NUMBERS OFF THE TOP OF THEIR HEAD WHERE THERE WAS NO GREY MATTER. THEY SHOULD BE HELD LEGALLY ACCOUNTABLE IN A COURT OF LAW FOR THEIR ACTIONS. WE SHOULD HAVE A SYSTEM IN PLACE WHERE WE CAN GET RESOLUTION FOR OUR ISSUES. THEIR APPEAL PROCESS IS A JOKE IN AND OF ITSELF. THERE SHOULD BE ANOTHER AGENCY THAT MAKES THEM ABIDE BY THE RULES, REGULATIONS AND LAW SET FORTH TO PROTECT THE CLAIMENT. I WAS A LAISSON COORDINATOR FOR ALL INJURED WORKERS AT THE SAN BERNARDINO CALIFORNIA MAIL PROCESSING PLANT AND FOR THE REGION. I WORKED PRO BONO FOR TWO LAWYERS WHO WERE TRYING TO LEARN THE FEDERAL WORKMANS COMPENSATION PROCESS. THE STORIES THAT I COULD TELL.

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