A settlement has been reached in a federal lawsuit brought by the United States against James W. Carell, CareAll Management LLC (formerly known as Diversified He alth Mana gement Inc.), C are All Inc., the James W. Car ell Family Trust, V IP Home Nursing and Reh abilitation Servi ces L LC, Professional Home He alth Care L LC, University Home H ealth, LLC and Elizabeth Vining (as representative of the Estate of Robert Vining). They are accused of causing Medicare to pay out money through mistake of fact, and were unjustly enriched by falsely concealing the home health agencies’ relationship with their management company.
This settlement resolves the United States’ lawsuit alleging that the CareAll entities fraudulently submitted eight cost reports for fiscal years 1999, 2000 and 2001 to support their Medicare billings. The United States alleged that these cost reports were false because they knowingly hid the relationship between the management company and the home health agencies. According to the complaint the United States filed in this case, the cost reports should have disclosed that the management company was related to the home health agencies, which would have lowered the Medicare reimbursement for the management company’s services. During the relevant years, the United States alleged that James W. Carell owned the management company, and his friend Robert Vining – an attorney who lived in Missouri – served as the nominee or “sham” owner of the home health agencies.
The United States further alleged in court filings that the management company exerted significant control over the home health agencies in a myriad of ways, including: James. W. Carell’s key role in facilitating Robert Vining’s purchase of the home health agencies; loans worth millions of dollars from companies owned by James W. Carell to the home health agencies; cash transfers for millions of dollars from the management company to the home health agencies; the management company’s day to day control over the home health agencies’ operations; and Robert Vining’s role as a mere figurehead owner. The United States also alleged in court filings that James W. Carell profited greatly from this “sham” owner relationship and that he monetarily rewarded Robert Vining for his participation in this scheme.
