Feds charge former Tenet executives in $400M fraud case

The U.S. Department of Justice has brought new charges against two former executives of Dallas-based Tenet Healthcare and the ex-CEO of a prenatal clinic who were allegedly involved in a $400 million fraud scheme.

Tenet agreed to pay approximately $514 million in October 2016 to resolve allegations the company paid kickbacks in exchange for patient referrals. Although Tenet settled the lawsuit, the federal government attached a name to the case earlier this year when John Holland, who previously served as senior vice president of operations for Tenet's Southern States Region and as CEO of North Fulton Medical Center in Roswell, Ga., was charged in the fraud scheme.

According to the DOJ, Mr. Holland and his co-conspirators circumvented Tenet's internal accounting controls to pay illegal kickbacks and bribes to clinics in Georgia and South Carolina that referred pregnant patients to Tenet hospitals for Medicaid-covered deliveries. Federal prosecutors allege the illegal scheme helped Tenet bill the Georgia and South Carolina Medicaid programs for more than $400 million.

A new indictment, made public Wednesday, includes a slew of charges against Mr. Holland and drags two additional defendants into the case: William Moore, former CEO of Atlanta Medical Center, which was previously operated by Tenet, and Edmundo Cota, former president and CEO of Clinica de la Mama, the network of clinics in Georgia and South Carolina that allegedly received kickbacks from Tenet.  

The indictment charges Mr. Holland with conspiracy to violate the federal Anti-Kickback Statute, wire fraud, falsification of books and records, and major fraud against the U.S. Mr. Moore is charged with wire fraud, falsification of books and records, and major fraud against the U.S. Each of their attorneys issued statements Wednesday claiming their clients are not guilty, according to the Atlanta Business Chronicle.

Mr. Cota was indicted for payment and receipt of bribes and wire fraud.

The case is pending in U.S. District Court for the Northern District of Georgia.

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