by Andrew Murray | October 1st, 2019
On August 29, 2019, the Department of Justice announced that the defendant, a Tennessee health care executive, was sentenced to 42 months in prison. The Press Release states:
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Brenda Montgomery, 71, of Camden, Tennessee, was sentenced by U.S. District Judge William Campbell, Jr., of the Middle District of Tennessee. Judge Campbell also ordered Montgomery to forfeit $595,676.80. Montgomery pleaded guilty on Jan. 7, 2019, to one count of conspiracy to violate the anti-kickback statute, and seven counts of violating the anti-kickback statute.
As part of her guilty plea, Montgomery admitted that she agreed to pay John Davis, the former CEO of Comprehensive Pain Specialist (CPS), illegal kickbacks in exchange for his arranging for Medicare referrals for durable medical equipment (DME) ordered by CPS employees. Davis agreed to arrange for referrals of DME for Medicare beneficiaries from the providers he supervised in exchange for kickbacks equaling 60 percent of the Medicare proceeds. In addition, Montgomery and Davis took a number of steps to conceal their illegal agreement, including making kickback payments through a nominee, creating and filing false tax documents, and, for Davis, intervening as CEO to prevent the owners of CPS from obtaining their own Medicare DME supplier numbers that would have allowed CPS to bill for its own Medicare DME orders.
Beginning in or around May 2015, Montgomery renegotiated her illegal agreement with Davis to further obscure their personal contract from Medicare and from CPS owners and employees, the court found. From approximately May 2015 until approximately November 2015, Montgomery agreed to pay Davis $200,000 for the sham purchase of a shell entity known as ProMed Solutions, LLC (ProMed). Montgomery again sought to renegotiate the sham transaction with Davis after she complained that her referrals from CPS had been lower than expected. Montgomery ultimately paid $150,000 for ProMed. The true purpose of this payment was to induce Davis to continue driving CPS referrals to CCC Medical.
The Court further found that Montgomery received as much as $2.9 million in fraudulent reimbursements from Medicare. In addition, Montgomery admittedly paid more than $770,000 in illegal kickbacks to Davis.
Davis was tried for his role in the conspiracy on March 26, 2019. On April 4, 2019, a jury in the Middle District of Tennessee returned a verdict of guilty on one count of conspiracy to defraud the United States and to violate the anti-kickback statute, and seven counts of violating the anti-kickback statute. Davis’ sentencing has not yet been scheduled.
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