Youth Counseling Center Accused of Scheme to Defraud Medicaid

A couple who co-own a youth counseling center in Chicago has been accused of Medicaid fraud involving overstating services and seeking payment for non-reimbursable activities.

According to a former employee who blew the whistle on the couple’s scheme to defraud Medicaid, the Laynie Foundation allegedly submitted false claims to the government and engaged in other fraudulent activities. The complaint claims that over the course of four years the couple used their foundation to submit $8.2 million in claims for mental health services and received $6.3 million in payments from the government.

“The time of each mental health service that Laynie Foundation represented (to the government) in its claims for payment had little, if any, bearing to the actual time spent on the service,” states the whistleblower lawsuit.

The Laynie Foundation provides youth and adult mental health and behavioral services. Its mission is “restoring mental balance through holistic approaches to emotional and behavioral health modalities,” according to the foundation’s website.

The whistleblower alleges that as a part of the couple’s scheme to defraud Medicaid, employees were told to falsely inflate services billed to the government. According to the complaint, the couple running the foundation warned employees not to question the practice and to “not mess with [the couple’s] money.”

The Whistleblower lawsuit alleges that the couple, as chief operating officer and chief executive officer, had little oversight over their actions. According to the lawsuit, the lack of oversight along with the Medicare fraud scheme allowed the couple to receive hundreds of thousands of dollars in salary from the foundation. Further, the lawsuit states that Illinois state law requires that services provided by the foundation be certified by a licensed medical health professional – a requirement the couple flouted.

The whistleblower employee filed a civil action against the couple in 2014 under the False Claims Act and the federal government has indicated it will intervene in the case.

Healthcare Fraud and Whistleblowers

When a medical facility overbills the government for healthcare services or otherwise violates the rules for obtaining payment from Medicare or Medicaid, the facility is committing healthcare fraud. Schemes to defraud Medicaid and other government programs can be complex and difficult for enforcement agencies to identify. In fact, it can take years for government agencies to build Medicaid fraud cases.

Employees are often the ones who notice that their employer is conducting a scam to defraud Medicaid. Under the whistleblower provisions of the federal False Claims Act, concerned employees can bring legal action against their employer to stop the fraud. These courageous employees protect the limited public resources dedicated to these important public healthcare programs. Additionally, whistleblowers are entitled to protection under the law as well as an award if the case is successful.

If you are concerned that your employer is defrauding Medicaid, contact an experienced healthcare fraud attorney to help understand your rights as a whistleblower. An attorney can also help you determine if you need to file a whistleblower lawsuit to stop the scheme to defraud Medicaid and protect the public.

Fill out the form on this page now for a free and confidential case evaluation.