Indictments were returned by a federal grand jury in Dallas charging Terry Lynn Anderson, 66, and Rocky Freeland Anderson, 36, of Dallas, with offenses related to their participation in an insurance fraud scheme, announced John Parker, US Attorney for the Northern District of Texas. Each defendant is charged with one count of conspiracy to commit health care fraud 18 USC §1349 (18USC §1347)], ten counts of health care fraud and aiding and abetting [18 USC §§1347 & 2], and four counts of aggravated identity theft and aiding and abetting [18 USC §§1028A & 2]. Both defendants were arraigned on April 20th before Magistrate Judge David L Horan.
From the Dallas US Attorney’s office for the Northern District of Texas, we have this press release:
The indictment [case 3:17-cr-00222-M] alleges that Terry Anderson was the owner of Anfree Incorporated, a Texas corporation that did business as Anderson Optical & Hearing Aids Center (Anderson Optical & Hearing). Terry Anderson co-operated Anderson Optical & Hearing with his son, Rocky Anderson, and both are licensed by the State of Texas as Fitters and Dispensers of Hearing Instruments. From January 1, 2011 through November 8, 2016, the defendants devised and executed a scheme to defraud Blue Cross Blue Shield of Texas (BCBS) by submitting claims for hearing aids that were not needed and, in many cases, not delivered to the BCBS subscriber. To increase the number of claims they could submit to BCBS, the defendants and their coconspirators engaged in fraudulent marketing practices.
For example, the defendants promised BCBS subscribers a free pair of high-end sunglasses or a free pair of prescription eyeglasses in exchange for taking a free hearing test. At the conclusion of these hearing tests, the defendants told subscribers that they had slight to mild hearing loss and required them to sign an order for hearing aids in order to receive the free sunglasses or prescription glasses. The defendants promised subscribers that the hearing aids would be provided to them at no cost, and that Anderson Optical & Hearing would not require the subscriber to pay any applicable copayment, coinsurance, or deductible. The defendants also offered BCBS subscribers $100 gift cards in exchange for referring family members and coworkers for free hearing tests.
The defendants took advantage of BCBS plans offered to employees of American Airlines because prior to 2014, the American Airlines insurance plans administered by BCBS had no maximum limit on the cost of hearing aids and allowed subscribers to obtain hearing aids once per plan year. In 2013, approximately 84.6% of Anderson Optical & Hearing’s total income came from BCBS and 99.7% of the BCBS payments were based on claims submitted for American Airlines employees and their dependents.
The defendants failed to conduct hearing tests that complied with BCBS’s medical policies related to the evaluation of hearing impairment. Many of the hearing tests were conducted in an employee break room at DFW Airport and lasted less than five minutes. The defendants then submitted claims to BCBS for reimbursement for hearing aids before dispensing hearing aids to the subscriber, and in some cases for hearing aids that they never delivered to the subscriber. The defendants kept lists of subscribers who had not received hearing aids despite BCBS having paid the claims. One such list contained 103 names.
The indictment also alleges the defendants falsified patient records, forged patient signatures, and attempted to dispense hearing aids and collect deductibles and coinsurance years after the subscriber was offered a free hearing test and free hearing aids.
In November 2013, BCBS conducted an audit of Anderson Optical & Hearing and requested copies of patient records for certain American Airlines employees and their dependents. On January 6, 2014, the Texas Department of State Health Services-Professional Licensing Unit (Professional Licensing Unit) conducted an investigation regarding a complaint it had received concerning the Andersons. In February 2014, when given the opportunity to respond to the complaint, the defendants submitted several patient records to the Professional Licensing Unit, including some of the same patient records that had been collected by BCBS. The patient records submitted to the Professional Licensing Unit had altered test scores, additional notations, and apparent forged signatures that were not present when the same records were submitted to BCBS in November 2013.
Anderson Optical & Hearing submitted claims to BCBS for hearing aids on behalf of American Airlines employees totaling more than $27 million, the vast majority of which were fraudulent. As a result of these claims, BCBS paid Anderson Optical & Hearing more than $16.7 million.
The indictment includes a forfeiture notice that would require the defendants, if convicted, to forfeit a 300 acre ranch in Bosque County, three vehicles, and more than $3.1 million that was seized from nine financial accounts in December 2015.
An indictment is merely an allegation and defendants are presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law. If convicted, however, each count of conspiracy to commit health care fraud and substantive health care fraud count carries a maximum statutory penalty of 10 years in federal prison and a $250,000 fine. The aggravated identity theft counts carry a mandatory statutory penalty of two years in federal prison and a $250,000 fine. (more)
Note the asset forfeiture notice 18 USC §982(a)(7), 18 USC §981(a)(1)(C), & 28 USC §2461(c) starting on page 15 of the indictment. Also, note that on the copy on the DOJ PR website that part of the forfeiture section was omitted on the 17th page: We received new copies of pages 16 & 17 and spliced them in, with the 18th page the original, signed copy. You can download the corrected PDF document from our server.