Corporate Compliance

NC couple sentenced to 24 months for healthcare fraud and tax offenses

Compliance Monitor, July 13, 2011

Ruben D. McLain, 40, and Michelle Judge McLain, 38, were each sentenced to 24 months in prison and three years of supervised release for healthcare fraud, conspiracy to defraud the United States, and tax evasion, according to a Department of Justice press release. The couple was also ordered to jointly pay $1.3 million to the Internal Revenue Service.

The McLains did business in Winston-Salem, NC, as Universal Services, Inc., Reynolds Home Care, and Triage Behavioral Health Systems. The companies provided Medicaid-covered  personal care and mental health services to qualified recipients.

According to the DOJ, the McLains established a bank account for Universal Services, Inc., using a false tax identification number. They also used business bank accounts to purchase personal items for their home, to pay school tuition for their children, and to purchase jewelry.

The McLains pleaded guilty to submitting a false enrollment application to the North Carolina Division of Medical Assistance that concealed their involvement in the companies through the use of a nominee and a fictitious person. The McLains also pleaded guilty to withholding income, Social Security, and Medicare taxes from their employees’ wages without paying over those withholdings to the Internal Revenue Service.

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