Two Massachusetts women were arrested Sunday on federal charges alleging their involvement in a $100 million home health care fraud scheme in which vulnerable patients were used in a plot to bill for services that were never performed, among other criminal actions, prosecutors said Monday.
In a statement, US Attorney Andrew E. Lelling’s office identified the defendants as Faith Newton, 52, of Westford, and Winnie Waruru, 41, of Lowell, and said the alleged scheme allowed Newton to purchase items including a Maserati and several homes, which the government is moving to seize in a separate civil action.
Raymond Sayeg, an attorney for Newton, said via e-mail that his client “denies the allegations contained in the Indictment and she intends to vigorously defend herself in this action.” A lawyer for Waruru declined to comment.
Both women were indicted on one count of conspiracy to commit health care fraud; one count of health care fraud — aiding and abetting; and one count of conspiracy to pay and receive kickbacks. Newton was also indicted on one count of money laundering conspiracy and seven counts of money laundering, the statement said.
In addition, Lelling’s office said, Waruru was indicted on two counts of making false statements and one count of making a false statement in a health care matter. Both women were slated to make their initial appearances in federal court in Boston on Monday afternoon.
Details on the hearing weren’t immediately available.
Lelling’s office said the indictment alleges that from January 2013 to January 2017, Newton was part owner and operator of Arbor Homecare Services LLC, and Waruru was a licensed practical nurse, or LPN, employed by the company as a home health nurse.
Newton and Waruru, the statement said, allegedly plotted to use Arbor to defraud MassHealth and Medicare of at least $100 million by committing health care fraud and paying kickbacks to get patient referrals. Newton then allegedly laundered the illicit funds, according to the statement.
Prosecutors allege that Arbor, through Newton and others, failed to train staff; billed for services that were never provided, or that weren’t medically necessary; and billed for services that weren’t authorized.
Arbor, Lelling’s office said, through Newton and others, allegedly developed employment relationships as a way to pay kickbacks for patient referrals. They also allegedly entered sham employment relationships with patients’ relatives to provide home health aide services that weren’t medically necessary and routinely billed for fraudulent visits that Newton knew didn’t occur, according to the statement.
As alleged in the related civil complaint, the statement said, Newton, either directly or through Arbor, targeted vulnerable patients who were low-income, on disability, or suffering from depression or addiction.
Waruru and Arbor, the statement said, allegedly billed MassHealth for skilled nursing visits that she didn’t actually perform. Waruru also allegedly passed cash payments from Newton to an Arbor patient to retain that patient, according to prosecutors.
Newton allegedly used the laundered proceeds of “the $100 million scheme” to buy multiple homes and a luxury Maserati vehicle and to fund investment accounts, “a lavish lifestyle, and numerous financial transactions,” the statement said.
A related civil forfeiture case brought by the government seeks to compel Newton to forfeit to federal authorities five properties in Westford, North Andover, Chelmsford, and Dracut and to give up the contents of 40 bank accounts or investments, the statement said.
Both women face a possible prison term if convicted in connection with the case.
“The charges of health care fraud, conspiracy to commit health care fraud, money laundering conspiracy, and money laundering each provide for a sentence of up to 10 years in prison, three years of supervised release, and a fine of up to $250,000 or twice the amount of the money involved in the laundering,” the statement said. “The conspiracy to pay kickbacks, make false statements, and make false statements in health care matters each provide for a sentence of up to five years in prison, three years of supervised release, and a fine of up to $250,000.”
Sentences, Lelling’s office added, are imposed by a judge based on US sentencing guidelines and other statutory factors.