Case 9:18-cr-80124-RLR Document 3 Entered on FLSD Docket 06/25/2018 Page 1 of 25

U N ITE D STA TES DISTRIC T CO UR T
SO U TH ER N D ISTRIC T O F FL O R ID A

CaseNo.18U.
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18U.S.C.5981(a)(1)
28U.S.C.52461
U NITED STA TES O F AM ER ICA
VS.

FILED by

K EN N ETH BM LY N SO N ,
M A R K A G RE STI,
STEPH A NIE C UR M N ,and
M A TTH EW N O EL,

D.C.

JUN 2 2 2018
STEVEN M .LARIMORE

CsLED.
RK
)Jfts
D-ISMI
TAMI
CT.
o.
A.
.

D efendants.

/
IN DIC TM EN T
The Grand Jury chargesthat:

G EN ER AL A LLEG ATIO N S
Atalltim es m aterialto this Indictm ent:
FederalG uidelines for Substance A buse Treatm ent

TheU .S.D epartm entofHealth and H um an Services,Substance A buseand M ental

Health ServicesAdministration,CenterforSubstanceAbuseTreatment(''SAM HSA'')wastasked
with establishing and im plem enting a com prehensive program to im prove the provision of
treatm ent and related servicesto individuals with respect to substance abuse and w ith protecting

thelegalrightsofindividualswhoweresubstanceabusers. 42 U.S.C.j290aa.
2.

Eçsubstance abuse''w as defined as ttthe abuse ofalcoholorother drugs.''42 U .S.C.

j290cc-34(4). tt-l-reatment''meantltthemanagementandcareofapatientsufferingfrom alcohol

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ordrug abuse,a condition which isidentified ashaving been caused by thatabuse,orboth,in order

toreduceoreliminatetheadverseeffectsuponthepatient.'' 42C.F.R.j 2.1l.
In addition to substance abuse treatm ent program s, SA M H SA prom ulgated
guidelines fortésoberhom es.'' Soberhom esw ere living facilities where clients lived togetherin a
drug-free and alcohol-free environm ent w hile w orking to m aintain sobriety. Sober hom es
generally did notprovide m edical care or clinical services to their residents'
, such services were
provided ata substance abuse treatm entcenter. Clientsatsoberhom esw ere expected to pay their
ow n rentand utilities,allow ing the soberhom es to recover their costs. sVhen properly nnanaged,
soberhom es operated asalcoholand dnlg free residentialenvironm ents for individuals attem pting
to abstain from alcoholand dnlgs.

Substance abuse treatm entcenters provided services,such as individualor group
therapy sessions,to assist clients in overcom ing their addictions. There w ere varying levels of

treatmentprovided,including Partial Hospitalization Programs (ççPHP''),lntensive Outpatient
ProgramsCfIOP'') and OutpatientPrograms(ttOP). PHPS,IOPs,orOPscouldbebilledtohealth
care benefit program s w hen they were m edically necessary and provided by, or overseen by,
licensed m edicalprofessionals.
Substance A buse Treatm entin Florida

Substance abuse selwicesin Floridaw ere govem ed by the ççllalS.M archm an A lcohol

and OtherDrug ServicesAct''(tttheM archman Act''),F1.Stat.j 397.301. UndertheM archman
A ct,private substance abuse selwice providers' policies regarding paym ent for selwices had to

complywithfederaland statelaw. Fl.Stat.j397.431.
The'tFlorida PatientBrokering A ct''m adeitafelony offense fol'any person,health
care provider,orhealth care facility,including any state licensed substance abuse service provider,

 Case 9:18-cr-80124-RLR Document 3 Entered on FLSD Docket 06/25/2018 Page 3 of 25

to:çç(a)Offerorpay any commission,bonus,rebate,kickback,orbribe,directlyorindirectly,in
cash or in kind,or engage in any split-fee arrangem ent,in any fonn w hatsoever ,to induce the

referralofpatients referralofpatientsorpatronage to or from a health care providerorhealth care

facility;(b) Solicit or receive any commission,bonus,rebate,kickback,or bribe,directly or
indirectly,in cash or in kind,or engage in any split-fee arrangem ent,in any fonn w hatsoever,in

retulm forreferringpatientsorpatronagetoorfrom ahealthcareproviderorhealthcarefacility;(c)
Solicitorreceive any com m ission,bonus,rebate,kickback,orbribe,directly or indirectly,in cash
or in kind,or engage in any split-fee arrangem ent,in any form w hatsoever, in return for the
acceptance oracknow ledgem entoftreatm entfrom a health care providerorhealth care facility'
,or

(d) Aid,abet,advise,orotherwise participate in the conductprohibited underparagraph (a),
paragraph(b),orparagraph(c).'' Fla.Stat.j817.505.
Florida law also provided that it w as 1ûa m aterial om ission and insurance

fraud ...forany service provider,otherthan a hospital,to engage in a generalbusiness practice
ofbilling am ounts asitsusualand custom ary charge,ifsuch provider hasagreed w ith the insured
orintendsto w aive deductibles or copaym ents,or does notfor any other reason intend to collect

thetotalamountofsuchcharge.'' Fla.Stat.j817.234(7)(a).
Pavm entfor R esidinc atSober H om es

U nlike substance abuse treatm ent centers,sober hom es generally did not provide
m edical care or clinical selwices that could be reim bursed by health insurance. W hile there w ere
federaland state guidelines,soberhom esw ere notlicensed orfunded by state or localgovernm ents.
Since soberhom esw ere ostensibly placesto live,legitim ate soberhom esgenerated incom e through

thecollection ofweekly ormonthly rentpaidby theirresidents,justaswith any landlord-tenant
relationship.

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Paym entfor Substance Abuse Treatm ent

lnsurance coverage forsubstance abusetreatm entand testing w asavailablethrough
a num berofavenues,including federalhealth care benefits program s like the FederalEm ployees

Hea1thBenefitsProgram (CCFEHBP''),healthplanssponsoredbyemployers(includingtheNational
RailroadPassengerCorporation (tWmtrak''jemployeehealthcarebenetitplans),andhealthplans
offered directly by private insurance com panies. Health plans sponsored by private em ployers

weregovernedbytheEmployeeRetirementlncomeSecurityActof1974(ttERlSA''),29U.S.C.jj
1001,:!.seg.,whilethosesponsoredbygovernm entemployerand certain othersareexemptedfrom
.

ERISA 'SJ'urisdiction.
10.

Both ERISA and IZOIZ-ER ISA health benefitplans,including A ffordable Care A ct

plans,w ere offered oradm inistered by private insurance com panies.

ll99 SEIU NationalBenetitFund (1l99 SEIU);Advantage Health Solutions

(Advantagel;Aetna Hea1th M anagementLLC and Aetna Life Insurance forM embers(Aetna),
'
Allegant Accountable Care Solutions (Allegantl; American M edical & Life lnsurance Co.

(Americanl;AmeriHealth (Amerillealthl;APW U Health Plan (APW U);Associated Employers
GroupBenetit(AEGB);AtlanticHea1thBenetk Plan(Atlantic);AuroraHealthCare(Auroral;Blue
Cross/Blue Shield (BCBS);Bricklayerslnsurance& W elfareFundsBenefit(BI&W FB);Capital
Administrators(Capitall;CignaHealthcare(Cigna)'
,CommeHCC Claim (Comme),
'Construction
W orkers TnlstFund (Constnlctionl;Consumers Choice Health Plan (Consumersl;Coresource
(Coresourcel;Corporate& FacilitiesAdm.by Qualcare(Qua1Care),
'CoventryHealth & Lifelns.

Co(Coventryl;CoxHealth Systems(Cox);CT GeneralLifelns.(CT);FirstCarolinaCareIns.Co.
(FirstCarolinal;GEHA (GEHAI;GibbsDieCastingCorp.(Gibbs),
'GoldenRulelnsurance(Golden
Rulel;Hackensack UM C (Hackensackl;Harvard Pilgrim Health Care (Harvardl;HAS CPA HC

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Claim (HAS); Health Choice (HC); Health Assurance Pennsylvania (HAPI; Healthcare
M anagement Admin. (HMA); Healthpartners Central M innesota Clinical, lnc. (HPCM CI;
Healthpartners Group Health Plan (HPGHP);Hea1th Plans lnc.(HPl);Healthscope Benefits
(Healthscopel;HNE Advisory Services,lnc.(HNE);Holy Name M edicalCenter(Holy Namel;
HPHC lnsuranceCo.(HPHC);Humana(Humana);IBEW Local640 & Arizona ChapterNECA
JointTrustFunds(lBEW )'
,InsuranceAdministratorofAmerica,lnc.(lAA);IU Healthplans(1U);
JohnsHopkinsHealthcareLLC (JohnsHopkinsl;KaiserPennanente-KaiserFoundation Hea1th
PlansofGA,lnc.(KaiserPermanentel;Kentucky LaborersDistrictCouncilH&W TrtzstFund
(KYLaborersl;M &T Bank (M &T);M agnacare (Magnacarel;M ason City SchoolCDB Medical
(Mason Cityl;Mayo Clinic Health Systems-Eau Claire Hospital,lnc.(M ayo Clinicl;Mebco
(Mebco),
'M edicalMutual(MM );M utualHea1th Services(M HS),
'M eritain (Meritainl;National
Lime& StoneCo(NL&S);NatlAssnofLetterCanierHPB (NALC);NiagaraCountyHea1thPlans
(NCHP);ODS Companies (ODS);Philadelphia lnsurance Co.(PIC);Optum (Optum);PHP
Insurance Co.(PHPI;PhysiciansM edicalAssociates (PM A);Plumbers & Pipefitters W elfare
Educations Fund (P&PW EF);PM CS (PMCS);Porter County GovernmentEmployee Benefits
(PCGEBI;PPS ElecPmtClealing House Trust(PPS);Preferred M edicalClaim SolutionsLLC
(PM CSI;PreferredOneAdministrativeServices(POASI;RegenceGroup Administrators(RGA),
'
SIHO (S1HO),
.StateofW estVirginia(SW V),
'Suburban TeamstersofNorthel'n lllinois(STNII;
Summacare (Summal;Tamko Building Products(Tamko);Teamsters Local456 W elfare Fund
(Local456).
,TheCountyofVolusiaDeland,FL HealthPartnership Plan (CountyofVolusia);The

EmpirePlan-NY StateHealthIns.Program (EmpirePlan),
'TheOhioStateUniversity(OSU);Time
lnsuranceCo.,(Time),
.TownshipofParsippany-TroyHills(Parisippanyl;Tricare-HumanaMilitary

(Tricarel;TUFTS Health Plan (TUFTSI;United Health Group,lnc./UMR (Unitedl;UPM C

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InsuranceServices(UPM C);ValueOptions,Inc.(Value)'
,andW elfareFundM id-lerseyTrucking
Industry,Local701(W FM J)werehealthinsuranceprovidersdoingbusinessintheStateofFlorida

whoremittedpaymentsforclaimsbyGDSL (asdescribedatparagraph 20below).
12.

The health insurance providers described above in paragraphs 9 through

(collectivelyreferredtohereinafterasttthelnsurancePlans'')wereEthealth carebenetitprograms,''
as defined in Title 18,United States Code,Section 24(b),thatis, 'tpublic orprivate plansor
contracts,affecting com m erce,underw hich any m edicalbenefit,item orservice isprovided to any
individual.''
13.

Underthe term softhe insurance policies and consistentw ith state and federallaw ,

theInsurancePlanswereonlyresponsibleforclaimsforservicesthat:(a)weremedicallynecessary
andactuallyrendered,(b)wereprovidedbyaproperlylicensedserviceprovider,and(c)complied
with theterm softhehealth careplans,including the obligation topay co-insurance and deductibles.
Bodilv Fluid Testine

Bodily fluid testing could be used to detectrecentdnlg oralcoholuse by a clientby
conducting various testson a client'surine,blood,and saliva.

15.

Likeotherm edicaltests,bodily fluid testing couldbebilled and reim bursedpursuant

to the term s of the insurance policy. The lnsurance Plans w ere only responsible for claim s for

testingthatwastçmeéicallynecessary,''actuallyperformed,prescribed,andconductedbyaproperly
licensed service provider,and conducted and billed in com pliance w ith the term softhe health care
plan,including the obligation to payco-insurance.

UrineAnalysisorUrinalysis(t6UA'')testing ranged in complexity from screening
tests- also known aspointofcare (''POC'') testing which provided instantresults and was
relatively sim ple and inexpensive,to confirm atory testing,w hich w assentto a laboratory form ore

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com plex analysisand w assubstantially m oreexpensive. Laboratoriescould also conductcom plex
analysison blood and saliva sam ples.

PointofCare(t6POC'')urinetestinginvolvedcollectingaclient'surineinaspecific
cup designed fortesting.The specim en w as analyzed using a colorbanded ornum bered dipstick,
allowing forvisualpositive ornegative results. PO C urine testing usually tested forthe presence

ofnineto thirteen specitictypesofdnlgs. POC teststypically costbetween $5 and $10 and could
beread easily by a layperson.Thistesting wasconvenient,lesscostly,and the resultscould beread
quickly. POC testing w as the m ost com m on form of testing perform ed at sober hom es and

treatm entfacilities.
l8.

Confirm atory testing, conducted in a laboratory setting, m ade use of gas liquid

chrom atography, m ass spectrom etry, and/or gas chrom atography, or high perfonnance liquid
chrom atography,to analyze the client's urine specim en.These techniques w ere highly sensitive,

and accurately and detinitively identitied specific substancesand the quantitativeconcentrationsof
the drugsortheirm etabolites.Contirm atory testing w asm ore precise,m ore sensitive,and detected
m ore substancesthan other typesofurine testing.Results ofconfinnatory testing took longerand
w ere significantly m ore expensive.

19.

To billinsurance com panies forUA s,providersm ustsubm itclaim son Form CM S-

1500,alsoknown astheHealthlnsuranceClaim Form (HICF),toapatient'srespectiveinsurance
com pany. Before billing forthe U As,providersm ustfirstobtain aprescription from the patient's
m edical doctor, who m ust deem the UA m edically necessary. H IC FS contain, am ong other
infonnation,the patient's nam e and biographicalinfonuation,his or her insurance infonnation,
diagnosis, date and place of selwice, the standardized procedure codes,the num ber of units
provided,the totaldollar am ountbeing charged,and nam e and location ofthe billing com pany.

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The procedure code and the unit volum e assist in determ ining the dollar am ount at which the
client's insurance com pany reim bursesthe provider. Com pleted H ICFScan beprinted and m ailed
to insurance com panies orthey can be subm itted electronically. W hen the H IC F issubm itted,the
providercertifies thatthe contentsofthe H ICF are tnle,correct,and com plete.
The Sober H om e

20.

GDSL,lnc.,a/lc/aGOOD DECISIONSSOBER LIVING,lnc.(EtGDSL''),wasasober

home and laboratory specializing in Urine Analysis(UA)testing located in Palm Beach County,
Florida. G D SL operated in m ultiple locations under the sam e corporate nam e. Its prim ary
location,referred to by em ployees as EtG D SL M ain'' w as located atGreen Terrace Condom inium s,

2800 G eorgia Avenue, W est Palm Beach, Flolida, 33405. GD SL M ain w as a m ulti-unit
condom inium com plex thathoused GD SL clients as a sober hom e,as w ellasprivate residents who

werenotassociated with GDSL. The GDSL Laboratory (GDSL Lab),which operatedunderthe
sam e corporate nam e,w as located at 14000 South M ilitary Trail,//211B, Delray Beach,Florida,

33484. A ccording to corporate records filed w ith the State ofFlorida,GD SL w as incorporated on
M arch 29,2012,with K ENN ETH BA ILY NSO N asthe Presidentand Registered A gent.

GD SL subm itted claim s forreim bursem ent to m ore than eighty health care benefit
program s,including the FEH BP plans,A m trak's established plans,private ERISA and nOII-ER ISA

health benetitplans,andtothehealth carebenefitprogramslisted above in paragraph 11 (ttthe

lnsurance Plans'').
22.

From approxim ately Septem ber 2011 through D ecem ber 2015, G DSL subm itted

claim s for substance abuse treatm ent selwices in excess of approximately $106,576,358 to the
Insurance Plans,andreceivedinsurancepaymentsofapproxim ately $31,356,527.

8

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The D efendants and C o-conspirators
K EN NE TH BA ILYN SO N , a resident of Palm Beach County, Florida, w as the
founder and owner of G D SL. A ccording to corporate records filed w ith the State of Florida,on
M arch 29,2012,BA ILY N SO N filed the A rticles oflncorporation forG D SL. BA ILY NSO N w as
the President and Registered A gent of GD SL. BA ILYN SO N m anaged all aspects of GD SL,
including hiring and tiring personnel, adm itting and discharging patients, and m aking financial
decisions. BA ILY N SO N w asthe signatory on a1lG DSL cop orate bank accounts.

24.

M A RK A G R ESTI,a licensed m edicaldoctorin the State ofFlorida,w astheM edical

Director of GDSL. As M edicalDirector,AG RESTI was responsible for evaluating patients,
developing appropriate plans of treatm ent,presclibing m edically necessary treatm ent and bodily
tluid testing,including UA s,and review ing U A and othertestresults.
25.

STE PH A NIE CU R R AN , a resident of Palm Beach County, Florida, was an

em ployee ofG D SL.
26.

M A TTH EW N O EL,a residentofPalm Beach County,Florida,w asan em ployee of

G D SL.

Unindicted co-conspilutor #1, a resident of Palm Beach County,Florida,was the
Registered A gentofa soberhom e in Palm Beach County,Florida.

28.

Unindicted co-conspirator #2, a resident of Palm Beach County,Florida,was the

Registered A gentofa soberhom e in Palm Beach County,Florida.
29.

U nindicted co-conspirator #3, a resident of Palm Beach County,Florida,was the

Registered A gentofa soberhom e in Palm Beach County,Florida.
30.

U nindicted co-conspirator #4, a resident of Palm Beach County, Florida,was the

Registered A gentofa substance abuse treatm entcenterin Palm Beach County,Florida.

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CO UN T 1
Conspiracy to Com m itH eaIth Care Fraud and W ire Fraud

(18U.S.C.5 1349)
The G eneralA llegations section ofthis lndictm entisre-alleged and incorporated by
reference asthough fully setforth herein.
From in or around Septem ber of 20l1,through in or around Decem ber of 2015,in
Palm Beach County,in the Southern DistrictofFlorida,and elsewhere,the defendants,
K EN N ETH BA ILYN SO N ,
M A RK A G R ESTI,
STEPH A N IE CU R R AN ,and
M A TTH EW NO EL,

didwillfully,thatis,withtheintenttofurthertheobjectsoftheconspiracy,andknowinglycombine,
conspire,confederate and agree with each other,and others,know n and urlknow n to the Grand Jury,
to com m itoffensesagainstthe United States,thatis:

to know ingly and willfully execute and attem pt to execute a schem e and
artifice to defraud a health care benefitprogram affecting com m erce,as defined in Title 18,U nited

StatesCode,Section24(b),thatis,thelnsurancePlans,andtoobtain,bymeansofmateriallyfalse
and fraudulentpretenses,representations,and prom ises,m oney and property owned by,and under

the custody and controlof,said health care benefitprogram ,in connection w ith the delivery ofand
paym ent for health care benefits,item s,and services,in violation of Title 18,U nited States Code,
Section l347;and

b.

to know ingly and w ith the intentto defraud,devise and intend to devise a

schem e and artifice to defraud and for obtaining m oney and property by m eans ofm atelially false
and fraudulentpretenses,representations,and prom ises,know ing thepretenses,representations,and

prom ises w ere false and fraudulentw hen m ade,and for the purpose of executing the schem e and
artitice,did knowingly transm it and cause to be transm itted by m eans of w ire com m unication in
10

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interstate and foreign com m erce,certain writings,signs,signals,picturesand sounds,in violation of
Title 18,U nited States Code,Section 1343.
Purpose ofthe Conspiracv

lt w as a purpose of the conspiracy for the defendants and their co-conspirators to

unjustly enrich themselvesby,amongotherthings:(a)obtainingpatientscoveredbythelnsurance
Plansthrough thepaymentofkickbacksand bribes;(b)submitting and causing the submission of
false and fraudulentclaims to the Insurance Plans'
,(c)concealing the submission offalse and

fraudulentclaimsto the lnsurance Plans,and the receiptand transferoffraud proceeds;and (d)
diverting the fraud proceeds fortheirpersonaluse and benefit,the use and benefitofothers,and to
furtherthe fraud.
M anner and M eans ofthe C onspiracv

The m anner and m eans by w hich the defendants and their co-conspirators sought to

accomplishtheobjectsandpurposeoftheconspiracyincluded:
K ENN ETH BAILY N SO N and co-conspirators established GD SL,a sober hom e,
which was purportedly in the business of providing a safe and dnlg-free residence for individuals
suffering from drug and alcoholaddiction.

K ENN ETH BA ILY N SO N bought m ultiple units in the condom inium com plex at
2800 Georgia A venue, W est Palm Beach, Florida, in his ow n nam e and in the nam e of coconspirators,including STEPH AN IE CU R R AN and M A TTH EW NO EL,and these unitsbecam e
G D SL M ain,the soberhom e.
obtain residents for G DSL, K EN N ETH

BAILY N SO N , STEPH A N IE

C U RR AN ,M A TTH EW NO EL,and their co-conspirators provided kickbacks and bribes in the
fonu offree orreduced rentwhen patientsagreed to attend dnlg treatm entatotherfacilities,often in
11

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the form ofPHP and/orIOP sessions,including atthesubstance abuse treatmentcenterowned and
operated by unindicted co-conspirator #4. BA ILY N SO N , CU R R AN , N O EL , and their çoconspiratorsalso provided otherbenefitsto individualsw ith insurance w ho agreed to reside atGD SL

andtosubmittoregulardrugtesting(typicallyUAswereadministeredthreeormoretimesperweek)
atGD SL,so m em bersofthe conspiracy could billthe UA to the residents'Insurance Plans.
K ENN ETH BA ILYN SO N , STE PH A NIE C UR R AN , M A TTH EW N O EL,and
theirco-conspiratorsfurtherpaid patientrecruiterskickbacksand bribesto provide patientsto G D SL.
K ENN ETH BAILY SO N , STE PH A N IE CU R R AN , M A TTH EW N O EL, and
theirco-conspiratorspaid othersoberhom esin Palm Beach County kickbacksand bribesto provide
the urine for the patients at these sober hom es to be tested by GD SL Lab, and other external
laboratories. GD SL obtained patients'urine in this m anner from sober hom es owned or operated

by,am ong others,unindicted co-conspirators 1,2,and 3.
GD SL w ould disguise the kickbacks and bribes to the sober hom es w ith bogus
contractsin which GD SL w ould purportedly ow n the soberhom es,and the actualsoberhom e owners
and em ployees w ere m ade to appear as em ployees ofG D SL,including butnotlim ited to contracts
w ith un-indicted co-conspiratol-s 1 and 2.
10.

K ENN ETH BAILY N SO N and other co-conspirators hired doctors to selwe as

m edical directors of GD SL, including M A RK A G RESTI. BA ILY N SO N paid A G RESTI a
m onthly salary,and in return A G RESTI ordered drug testing for GD SL'S patients,regardless of
w hethersuch testing w as m edically necessary orconducted.
K EN NETH

M A TTH EW

BA ILYN SO N , STE PH AN IE C UR M N , M A R K

AG RESTI,

N O EL, and their co-conspirators ordered excessive, m edically unnecessary

 Case 9:18-cr-80124-RLR Document 3 Entered on FLSD Docket 06/25/2018 Page 13 of 25

confirm atory testing for G D SL patients on a system atic basis from external laboratories and from
G D SL Lab,w hile failing to use the results of these tests to determ ine treatm ent ofG D SL patients.
K EN N ETH

BAILY N SO N, M A R K A G RE ST I, STEPH A N IE

CU RR AN ,

M ATTH EW N O EL,and otherco-conspirators,ordered and caused the ordering ofexpensive urine

drug screens and confirm ation tests which w ere not m edically necessary or reim bursable by the

InsurancePlans,inthat,amongotherthings: (i)thetestswerenotmedicallynecessary;(ii)thetests
w ere nottim ely reviewed by a qualified m edicalprofessionalorby a doctorortreatm entprofessional

indevelopingormodifyingthepatients'treatment;(iii)thetestswerenotorderedand/orauthorized
untilafterthetestswereperfonned;and(iv)thetestswerenotdeterminedtobemedicallynecessary
on an individualized basis by a doctorpriorto being perfonned.
13.

K EN NET H BAILY N SO N ,M A R K A G R ESTI,and other co-conspirators created

or caused to be created fraudulent docum ents,including,but notlim ited to,backdated requisition

orders and false medicaljustification letters formedically unnecessary tests,which were then
subm itted by G D SL to the Insurance Plansto concealand perpetuate the fraud.
ln orderto entice patients to enrollin and rem ain atG D SL so thatconspirators could
collectreim bursem ent from the lnsurance Plans for fraudulent U A testing,G D SL did not collect
m andatory co-pays,deductibles,and otherco-insurance from patients. Conspiratorsdid notinfonn
the Insurance Plansthatthey w ere notcollecting the co-insurance paym entsasrequired by the tenns

ofthe lnsurance Plans,and by law in the State of Florida.
K ENN ETH

BAILY N SO N , STEPH AN IE C U RM N , M A R K

A G R ESTI

M A TTH EW N O EL ,and co-conspirators subm itted and caused the subm ission to the lnsurance

Plansoffraudulentinsurance claim s,via interstate and foreign w ires,thatfalsely and fraudulently
represented that various health care benefits, prim arily bodily fluid testing, qualified for

 Case 9:18-cr-80124-RLR Document 3 Entered on FLSD Docket 06/25/2018 Page 14 of 25

reim bursem entand w ere m edically necessary and actually provided,w hen,in fact,claim ed benefits
w ere not provided,and were notm edically necessary. These fraudulent claim s failed to disclose
thatpatients had notbeen required to pay their co-paym ents and deductibles,and failed to disclose
that GD SL patients had been obtained through kickbacks,bribes,and other rem uneration paid to
patients and patientrecruiters,in violation ofthe law s ofthe State ofFlorida.

16.

GDSL submitted approxim ately $106,576,358 in false and fraudulentclaim sto the

lnsurance Plans. A s a result of such false and fraudulent claim s, G D SL received insurance

paymentsofapproxim ately $31,356,527 from thelnsurancePlans.
K EN NE TH

BA ILY N SO N , STE PH A N IE C U RM N , M A R K

A G R ESTI,

M ATTH EW N O EL,and co-conspiratorsused theproceedsfrom the false and fraudulentclaim sfor
theirow n use and the use ofothers,and to furtherthe fraud.
A llin violation ofTitle 18,United Stated Code,Section 1349.
C O UN T S 2-12
H eaIth C are Fraud

(18U.S.C.5 1347)
The GeneralA llegations section ofthis lndictm entis re-alleged and incorporated by
reference asthough fully setforth herein.

From in or around Septem ber pf20l1,through in or around Decem ber of 2015,in
Palm Beach County,in the Southern DistrictofFlorida,and elsew here,the defendants,
K EN N ETH BA ILYN SO N ,
M A RK A G RE STI,
STEPH A N IE C U R M N ,and
M A TTH EW NO EL,

in connection w ith the delivery of and paym ent for health care benefits,item s,and services,did
know ingly and w illfully execute,and attem ptto execute,a schem e and artifice to defraud a health

carebenefitprogram affectingcommerce,asdefinedin Title18,United StatesCode,Section24(b),
l4

 Case 9:18-cr-80124-RLR Document 3 Entered on FLSD Docket 06/25/2018 Page 15 of 25

thatis,the lnsurance Plans,and to obtain,by m eans of m atelially false and fraudulentpretenses,
representations,and prom ises,m oney and property owned by,and underthe custody and controlof,
these health care benefitprogram s.
Purpose ofthe Schem e and A rtifice

Itw as a purpose ofthe schem e and artifice forthe defendants and their accom plices

to unlawfully emich themselves by,among otherthings:(a) obtaining patients covered by the
lnsurance Plans through the paymentofkickbacks and bribes;(b) submitting and causing the
submission offalseandfraudulentclaimstothelnsurancePlans;(c)concealing the submission of
falseand fraudulentclaim sto the Insurance Plans,and thereceiptand transferoffraud proceeds;and

(d)divertingfraudproceedsfortheirpersonaluseandbenefit,theuseand benefitofothers,andto
furtherthe fraud.
The Schem e and A rtifice

The allegations contained in the M anner and M eans of the Conspiracy section of

Count 1are re-alleged and incorporated by reference asthough fully setforth herein as a description
ofthe schem e and artifice.
A ctsin Execution or A ttem pted Execution ofthe Schem e and Artifice
O n oraboutthe dates setforth below ,in Palm Beach County,in the Southern D istrict

ofFlorida,and elsew here,the defendants,in connection w ith the delivery ofand paym entforhealth
care benefits,item s,and servicès,did know ingly and w illfully execute,and attem ptto execute,the
above-described schem e and artifice to defraud a health care benefitprogram affecting com m erce,

asdefinedbyTitle l8,UnitedStatesCode,Section24(b),thatis,theInsurancePlans,andtoobtain,
by m eans of m aterially false and fraudulent pretenses,representations,and prom ises,m oney and
property ow ned by,and underthe custody and controlof,said health care benefitprogram s,in that
15

 Case 9:18-cr-80124-RLR Document 3 Entered on FLSD Docket 06/25/2018 Page 16 of 25

the defendants subm itted and caused the subm ission of false and fraudulent claim s seeking the
identified dollaram ounts,representing thatthe services listed below w ere m edically necessary and
provided to patientscovered by the Insurance Plans:
Count Approx.C laim
D ate

2

12/18/13

Patient Approx.Claim
A m ount

K.D.

$6,490

BenefitProvider/
C laim N o.

UHC Claim No.

D escription
ofClaim

UA Testing

439438071701

3

01/22/14

B.S.

$6,342

BC/BS Claim No.

UA Testing

14100000394577552

4

01/27/14

S.G .

$6,342

BC/BS Claim No.

UA Testing

14100000394577543

5

01/31/14

T.H.

$9,972

BC/BS Claim No.

UA Testing

11100000394586256

6

02/01/14

H.K.

$9,972

BC/BS Claim No.

UA Testing

14100000394586683

7

03/31/14

D.P.

$6,293

BC/BS Claim No.

UA Testing

11100000402627307

8

04/02/14

R.N .

$6,293

CIGNA Claim No.

UA Testing

9681409916216

9

04/07/14

K.D.

$6,562

CIGN A Claim No.

UA Testing

9651410593017

10

04/09/14

L.B.

$6,293

BC/BS Claim No.

UA Testing

M 00001R 594385390

11

05/22/14

R.M .

$6,298

BC/BC Claim No.

UA Testing

H 100000411580306

12

06/30/14

S.W .

$6,635

BC/BS Claim No.

Q100000417513053
ln violation ofTitle 18,U nited States Code,Sections 1347 and 2.

UA Testing

 Case 9:18-cr-80124-RLR Document 3 Entered on FLSD Docket 06/25/2018 Page 17 of 25

C O U N TS 13-14
M oney L aundering

(18U.S.C.j 1957)
On or about the date specitied as to each count below , in Palm Beach County, in the
Southern DistrictofFlorida,and elsew here,the defendant,
K E NN ETH BA ILY NSO N ,

did know ingly engage and attem pt to engage in a m onetary transaction affecting interstate and
foreign com m erce,by,through,and to a financialinstitution,in crim inally derived property ofa

value greaterthan $10,000,such property havingbeen derived from specified unlawfulactivity,as
m ore specifically described below :
C ount

Approxim ate D ate

D escription ofM onetary Transaction

13

02/07/2014

K ENNETH BM LYNSON negotiated Check N o.10189 for

$158,000 from GDSL bank accountending in 5906 atJP
M organ Chase Bank,m adepayable to Bram an M otorCars
14

05/08/2014

K ENNETH BM LYNSON negotiated Check N o.6146 for

$175,000 drawn on KENNETH BAILYNSON 'S
personal account ending in 7078 at JP M organ Chase
Bank,m ade payable to God isA w esom e,LLC
It is further alleged thatthe specified unlaw fulactivity is health care fraud and conspiracy
to com m ithealth care fraud,in violation ofTitle 18,United States Code,Sections 1347 and 1349.
ln violation ofTitle 18,United StatesCode,Sections l957 and 2.
FO R FEITU RE

(18U.S.C.j982(a)(1)and (a)(7))
The allegations of Counts l through 12 of this lndictm ent are re-alleged and
incorporated by reference forthe purpose ofalleging forfeiture to the United States,pursuantto

theprovisionsofTitle18,UnitedStatesCode,Section982(a)(l)and(a)(7).

 Case 9:18-cr-80124-RLR Document 3 Entered on FLSD Docket 06/25/2018 Page 18 of 25

Upon conviction of any ofCounts 1 through 12,charging offenses in violation of

Title 18,United StatesCode,Sections 1347 and 1349 (Hea1th Care Fraud,and Conspiracy to
CommitHea1thCareFraudandW ireFraud),thedefendantssoconvictedshallforfeittotheUnited
States,pursuanttoTitle18,UnitedStatesCode,Section982(a)(7),anyproperty,realorpersonal,
w hich constitutes or is derived from proceeds traceable to the offense. The property to be

forfeited includesthe following:

A requestforamoneyjudgmentintheamountof$31,356,527,representing
the approxim ate totalam ountoffraud proceeds defendants obtained,directly or indirectly,from
the offenses alleged in C ounts l through 12 ofthe lndictm ent;
A m u1ti-fam ily residence located at4565 CoconutRoad,Lake W orth,
Florida;
A m ulti-fam ily residence located at4593 CoconutRoad,Lake W orth,
Florida;
A m ulti-fam ily residence located at4863 CoconutRoad,Lake W orth,
Florida'
,

A single fam ily residence located at677 Cresta Circle,W estPalm Beach,
Florida;
A com m ercialproperty located at4236 Lake W orth Road,Palm Springs,
Florida;
g.

Condom inium Units A2,A 6,B 11,B 12,C 13,C14,C 15,C 16,D 19,1722,
1724,9 25,1726,D 28,E31,E32,E34,1735,F36,F38,F39,G41,6 46,1447,
H50,1152,156,157,J59,J60,J6l,.
164,K 65,K 66,1168,K 73,1-,75,L76,
M 83,M 84 atGreen Terrace Condom inium s,2800 G eorgia Avenue,W est
Palm Beach FL;

The allegations ofCounts l3 and 14 ofthis lndictm entare hereby re-alleged and
incom orated by reference forthe purpose ofalleging forfeitures pursuantto Title 18,United Sates

Code,Section982(a)(l).
Upon conviction of Counts 13 and 14 of the Indictm ent,charging an offense in
l8

 Case 9:18-cr-80124-RLR Document 3 Entered on FLSD Docket 06/25/2018 Page 19 of 25

violation of Title 18, U nited States Code, Section 1957, the defendant, K EN N ETH
BA ILY NSO N ,shallforfeitto the U nited States any property,realorpersonal,involved in such

offense,pursuanttoTitle l8,UnitedStatesCode,Section982(a)(l). Thepropertytobeforfeited
includesthe follow ing:

A requestforamoneyjudgmentintheamountof$31,356,527,representing
the approxim ate totalam ount offraud proceedsdefendants obtained,directly or indirectly,from
the offensesalleged in Counts 13 and l4 ofthe lndictm ent;
A m ulti-fam ily residence located at4565 CoconutRoad,Lake W orth,
Florida;
A m ulti-fam ily residence located at4593 CoconutRoad,Lake W orth,
Flolida;
d.

A m ulti-fam ily residence located at4863 C oconutRoad,Lake W orth,
Florida;
A single fam ily residence located at677 Cresta Circle,W estPalm Beach,
Florida'
,

A com m ercialproperty located at4236 Lake W orth Road,Palm Springs,
Florida;
Condom inium UnitsA 2,A 6,B l1,B 12,C 13,C 14,C 15,C l6,D 19,D 22,
1724,1725,1726,D28,E31,E32,E34,F35,F36,1738,F39,G41,G 46,1147,
H50,1452,156,157,.
159,J60,J61,J64,K 65,K 66,K68,K 73,1-,75,1-76,
M 83,M 84 atGreen Terrace Condom inium s,2800 G eorgia Avenue,W est
Palm Beach FL;

Ifany property described above,asa resultofany actorom ission ofthe
defendants'
.

a.

cannotbe located upon the exercise ofdue diligence'
,

19

 Case 9:18-cr-80124-RLR Document 3 Entered on FLSD Docket 06/25/2018 Page 20 of 25

hasbeen transferred orsold to,ordeposited w ith,a third party;

hasbeenplacedbeyondthejurisdictionofthecourt;
d.

hasbeen substantially dim inished in value'
,or
has been com m ingled with otherproperty which cannotbe divided
withoutdifficulty,

then the United States shallbe entitled to forfeiture of substitute property pursuant to Title 21,

United States Code,Section 853(p),as incorporated by Title 28,United StatesCode,Section
2461(c).
AllpursuanttoTitle18,UnitedStatesCode,Section982(a)(1)and(a)(7).

A TR UE BILL
FO REPER SON

r
,
'

B

JA M
x TED

.GREEN BERG
Es A TORN EY
G

JA ES V .HA YES
A SISTAN T UN ITED STATES A

N EY

20

 UNITED3STATES
DISTRI
C T CO UR
T
Case 9:18-cr-80124-RLR Document
Entered
on FLSD
Docket
06/25/2018 Page 21 of 25
SO UTH ERN DISTRICT OF FLO RIDA

UNITED STA TES O F A M ERICA

CASE NO .

C ERTIFICATE O F TR IA L ATTO RN EY.
KENNETH BAILYNSON etaI.,
Defendants.

/

X

No

New Defendantts)

CourtDivision:(selectone)
M iam i
FTL

Superseding Case lnform ation:

Key W est
W PB
FTP

Num berofNew D efendants
Totalnum berofcounts

ldo hereby certify that:
1have carefully considered the allegationsofthe indictment,thenum berofdefendants,thenumber
ofprobablewitnessesand the legalcomplexitiesoftheIndictm ent/lnformation attached hereto.

1am aFare thatthe inform ation supplied ol?thisjtatementwillbe relied upon by the Judgesofthis
Courtln setting theircalendarsand schedullng crlminaltrlalsunderthe mandateofthe Speedy Trial
Act,Title 28 U.S.C.Section 3161.

Interoreter:
4.

tv'esorNoà

No

t-istfanguageand/ordialec'
t

U

Thiscase willtake

daysforthe partiesto try.

20

GLISH

Please check appropriatecategory and typeofoffenselisted below :
(Checkonl
yone)

(Checkonlyone)

l
11
lll
IV
V

0 to 5 days
6 to l0 days
11 to 20 days
21to 60 days
61daysand over

Petty
M inor
M isdem .
Felony

6.

HasthiscasebeenpreviouslyfiledinthisDistrictCourt? (YesorNo) NO

lfyes:
Judge:

X

U

CaseNo.

(Attachcopyofdispositiveordel)
Hasacomplaintbeenfiledinthlsmatter?

lfyes:
M agistrateCaseNo.
Related M iscellaneousnumbers:

(YesorNo)

Defendantts)infederalcustodyasof
Defendantts)instatecpstody asof
Rule20 from the Distrlctof
lsthisapotentialdeathpenaltycase?(YesorNo)

NO

Dpesthiscaseoriginatefrom a matterpending in th Northern Region ofthe
prlorto October 14,2003?

Yes

No

N

s v I-lAv'
cs

Ass STAkTIJNITED STATESATTO
Florida BarN o.A5501717

*penaltySheetts)attached

.Attonzey'sOftice

 Case 9:18-cr-80124-RLR Document 3 Entered on FLSD Docket 06/25/2018 Page 22 of 25

U NITED STATE S D ISTR IC T C O U R T
SO U TH ERN D ISTR ICT O F FLO RID A
PEN A LTY SHEET
D efendant'sN am e: K EN N ETH BM LY N SO N

Count#:1
Conspiracy to Com m itH ea1th Care Fraud and W ire Fraud
Title 18.U nited StatesCode,Section 1349

*M ax.Penalty:

Twenty(20)Years'Imprisonment

Counts#:2-12

Title 18.United StatesCode,Section 1347

*M ax.Penalty:

Ten(10)Years'lmprisonmentastoeachcount

Counts#:13,14
A4onev Laundehng

Title 18.United StatesCode.Section 1957

*M ax.Penalty:

Ten(10)Years'lmplisonmentastoeachcount

WR efers only to possible term ofincarceration,doesnot include possible fines,restitution,
specialassessm ents,parole term s,or forfeitures thatm ay be applicable.

 Case 9:18-cr-80124-RLR Document 3 Entered on FLSD Docket 06/25/2018 Page 23 of 25

UN ITED STA TES D ISTR ICT CO UR T
SO U TH ER N D ISTR IC T O F FLO R ID A
PEN A LTY SH EET

Defendant's Nam e: M A RK A G R ESTI
C ase N o:

Count#:1
Conspiracy to Com m itHea1th Care Fraud and W ire Fraud

Title l8.United States Code.Section 1349

*M ax.Penalty:

Twenty(20)Years'Imprisonment

Counts#:2-12
H ealth Care Fraud

Title 18.U nited States Code,Section 1347

*M ax.Penalty:

Ten (10)Years'lmprisonmentastoeachcount

*R efersonly to possible term ofincarceration,doesnotinclude possible fines,restitution,
specialassessm ents,parole term s,or forfeitures thatm ay be applicable.

 Case 9:18-cr-80124-RLR Document 3 Entered on FLSD Docket 06/25/2018 Page 24 of 25

UN ITED STA TES D ISTRIC T CO U R T
SO U TH E RN D ISTR IC T O F FLO R ID A
PEN A LTY SHEET

D efendant's N am e: STE PH A NIE C U RR AN
C ase N o:
Count#:1

Conspiracv to Com m itH ealth Care Fraud and W ire Fraud

Title 18.United StatesCode.Section 1349

*M ax.Penalty:

Twenty(20)Years'lmprisonment

Counts#:2-12
Health Care Fraud

Title 18.United StatesCode,Section 1347

*M ax.Penalty:

Ten(10)Years'lmprisonmentastoeachcount

WR efersonly to possible term ofincarceration,does notinclude possible llnes,restitution,
specialassessm ents,parole term s,or forfeituresthatm ay be applicable.

 Case 9:18-cr-80124-RLR Document 3 Entered on FLSD Docket 06/25/2018 Page 25 of 25

U NITED STA TE S D ISTR ICT CO UR T
SO U TH E RN D ISTR ICT OF FL O RID A
PEN A LTY SHEET
D efendant's N am e: M A TTH EW N O E L
C ase N o:

Count#:1
Conspiracy to Com m itH ealth Care Fraud and W ire Fraud
Title 18.U nited StatesCode.Section 1349

*M ax.Penalty:

Twenty(20)Years'lmprisonment

Counts#:2-12
Health Care Fraud

Title 18.United States Code.Section 1347

*M ax.Penalty:

Ten(10)Years'lmprisonmentastoeachcount

WR efersonly to possible term ofincarceration,does notinclude possible fines,restitution,
specialassessm ents,paroleterm s,or forfeituresthatm ay be applicable.