Hollywood, FL Psychiatric CEO Gets Jail, $40 Million in Restitution for Medicare Fraud By Tod Aronovitz | 10/17/13 | 0 Comment

Karen Kallen-Zury, the former CEO of Hollywood Pavilion mental health facility, was at the center of a Medicare fraud case that uncovered an extensive bribery scheme involving other Hollywood Pavilion executives for more than decade.

U.S. District Judge Jose Martinez revoked the Lighthouse Point resident’s $3 million bond, ordered the 60-year-old to repay about $40 million to the Medicare program, and sentenced her to 25 years in jail.

In June, prosecutors argued that Kallen-Zury allegedly plotted with other Hollywood Pavilion employees to submit $67 million in false claims over a 10-year period, in which the mental health facility swindled Medicare out of $40 million. To cover their tracks, Kallen-Zury and her conspirators falsified records of ineligible patients and paid more than $1 million in bribes to recruiters, many of whom were convicted felons, to supply Medicare patient referrals both in South Florida and out of state, according to the Justice Department.

A federal jury found most of the defendants—including Kallen-Zury—guilty of conspiracy, healthcare fraud, wire fraud and kickback offenses.

In addition to Kallen-Zury, prison sentences were handed down to two other Hollywood Pavilion executives found guilty this summer:  Daisy Miller, a former inpatient clinical director, who received 15 years; and Christian Coloma, a former therapist/administrator, who was sentenced to 12 years.  Miller, who has two young daughters, was allowed to remain free on bond as she pursues her appeal.

Another defendant, Michele Petrie, a former director of Hollywood Pavilion’s outpatient facility, was acquitted of two wire-fraud counts, but still found guilty of conspiracy and healthcare fraud.  She will be sentenced Dec. 18.

In a court filing, Justice Department prosecutor Robert Zink wrote, “In this case, the fraud scheme is a derivative of a larger crime — the exploitation of human beings to obtain unfettered access to their taxpayer-funded, government-administered insurance benefits, all for personal gain.” He added, “Kallen-Zury was the mastermind.”

Psychiatrist Alan Gumer of Tamarac, along with other cooperating witnesses convicted in similar mental-health fraud schemes in South Florida, helped advance the Hollywood Pavilion investigation, according to an article in the Miami Herald on Sept. 11.

Agents with the FBI and the U.S. Department of Health and Human Services’ Office of Inspector General worked on the case, which is part of a larger “federal crackdown against operators of mental-health facilities accused of bilking the vulnerable Medicare program by charging for the purported treatment of mostly alcoholic and drug-addicted patients who did not need the therapy or receive it,” the article reported.

How to Report Miami Medicare Fraud

Healthcare or medical billing employees who have inside knowledge of questionable Medicare billing practices can file a confidential legal claim under the False Claims Act. By acting as a “whistleblower” in what is known as a “qui tam” lawsuit, a private party may collect between 10 to 30 percent of the amount recovered, depending on how the case is prosecuted.

ARONOVITZ LAW: Miami Whistleblower / Qui Tam Law Firm

The Miami Qui Tam law firm of ARONOVITZ LAW routinely works with Miami whistleblowers to document Medicare fraud and other forms of fraud against the government. Contact Miami Whistleblower / Qui Tam lawyer Tod Aronovitz to discuss a case.