ANNE ARUNDEL MAN GETS 27 MONTHS PRISON TIME, ORDERED TO PAY $1 MILLION IN RESTITUTION AND PENALTIES FOR MEDICAID THEFT

Attorney General J. Joseph Curran, Jr., announced today that an Anne Arundel County man has been sentenced to 27 months in prison for stealing at least $250,000 from the Maryland Medical Assistance (“Medicaid”) program. William C. Geist, Jr., 55, of the 1600 block of Nickerson Way, in Arnold, Maryland, pleaded guilty to one count of felony theft, and was sentenced by the Honorable John Grason Turnbull, II in Baltimore County Circuit Court for fraud he committed while he owned and operated a Staff Builders, Inc. franchise.

Staff Builders is a provider of skilled home health care services located at 1501 S. Edgewood St. in Baltimore County. Geist owned the Maryland Staff Builders franchise from 1992 to 1998. Judge Turnbull sentenced Geist to eight years’ incarceration, imposing 27 months of the term and suspending the balance, and ordered that Geist serve five years of supervised probation following his release from prison. Pursuant to the plea agreement in the matter, Geist presented the Court with a check for $250,000, representing the restitution owed to Medicaid. Geist was also ordered to pay an additional $750,000 in penalties to the State during the course of his probation.

An investigation by the Attorney General's Medicaid Fraud Control Unit revealed that for the fiscal years beginning March 1993 and ending February 1997, Geist repeatedly submitted payroll reports to Staff Builders’ headquarters that inflated the number of employees who were performing healthcare-related duties for his company. Staff Builders then submitted documentation, based on his false information, to Medicaid. By falsely increasing his Staff Builders franchise’s costs, he caused Medicaid to pay more for services Staff Builders provided to its Medicaid patients.

The investigation revealed that Geist routinely ordered his staff to fraudulently add to the Staff Builders payroll reports individuals who actually were employed by other, unrelated healthcare companies also owned by Geist. This scheme was revealed when employees of those other companies indicated that they had received payroll checks from Staff Builders, rather than from the company that actually employed them. In addition to increasing his reimbursement by Medicaid, Geist, by misrepresenting those people as Staff Builders’ employees, was able to make those other companies more profitable.

The investigation also revealed that Geist illegally failed to disclose to Medicaid that he owned the medical supply company from which his Staff Builders franchise purchased its supplies. At that time, the Medicaid program reimbursed home health companies for the costs of the medical supplies they purchased, but not for any markups on those supplies if the supply company was owned by the same person who owned the home health company that bought the items. Had Geist disclosed that he owned both companies, Medicaid, per its regulations, would not have reimbursed Staff Builders for the 40 percent markup that Geist’s medical supply company charged on its sales of goods to Staff Builders.

At the hearing, Sierra Mountain Enterprises, Ltd., a company controlled by Geist and associated with his Staff Builders franchise, also entered a plea of guilty to felony theft, and was sentenced by the court to be jointly and severally liable with Geist for the $750,000 penalty.

In October of 2003, Tender Loving Care Health Care Services, Inc. (“TLC”), which at one time was the franchisor of Staff Builders, Inc., entered into a settlement with the Office of the Attorney General. While asserting that it had no knowledge that the information provided to it by Geist was incorrect in any way, TLC agreed to refund overpayments of $556,769 to Medicaid and to pay the state an additional $741,769 in damages and compensation for the cost of the investigation.

In total, TLC, Geist, and Sierra Mountain Enterprises, Ltd., will have reimbursed Medicaid in the amount of $806,769, the full amount of the loss to that State program. In addition, they have agreed to pay the State penalties and investigative costs of $1,491,769 in connection with this matter.

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