Before the law caught up with them, Winnie Waruru, 42, and Faith Newton, 52, lived large in America.
One drove a Maserati, an Italian luxury brand known for its exclusive styling, and the other one a Range Rover. As dollar millionaires, they kept their lives private and few Kenyans had heard about the two nurses whose fortunes seemed endless. In addition to their lavish lifestyles, they had five properties in the US and operated 40 bank accounts.
The US government now claims that the two Kenyans swindled Boston state out of $100 million (Ksh12 billion) in healthcare fraud. They are alleged to have paid kickbacks to obtain referrals and retain patients over a five-year period.
US detectives watched their transactions that ran into millions of dollars for many months.
Last week, Waruru pleaded guilty before US Senior District Court Judge George A. O’Toole Jr, who has scheduled sentencing for January 12, 2023, according to a release by US Attorney Rachael Rollins. Newton’s case will continue.
Detectives allege that between January 2013 and January 2017, the two used Arbor Homecare Services LLC as a conduit to siphon $100 million from MassHealth and Medicare – a programme that provides health coverage primarily for people with low incomes – by claiming refunds and filing false statements. They then closed down the company.
With a budget running into billions of dollars, MassHealth, which pays for personal care attendants, medical equipment, and specific prescription, has been a target of swindlers who first apply to become providers through registered companies. The healthcare company nurses are supposed to attend to vulnerable members and then bill the programme for reimbursement.
Both Waruru and Newton were accused of “conspiracy to commit health care fraud” and for billing for healthcare services that they never provided. They are also charged with making false statements to MassHealth.
The federal government has filed a civil action to seize the duo’s properties and freeze their bank accounts, which held millions of dollars.
The court papers say that Newton was part-owner and operator of Arbor Homecare Services LLC, while Waruru was a licensed practical nurse. On paper, Waruru was “employed” by Arbor Care Homecare Services, but, according to court records, she was more than that.
To get more money, they are said to have entered into “sham” employment relationships with family members of MassHealth patients and purported to provide unnecessary medical care, billed as “visits”. For example, Arbor would reimburse a relative staying with a relative member for fictitious nurse visits in a scheme that went undetected between January 2013 and January 2017. It would then make claims to MassHealth.
The two are also said to have been paying kickbacks to patients under their care to retain them as part of Arbor Homecare Services LLC. Detectives alleged that Waruru “caused Arbor to bill MassHealth over $1.2 million (Ksh120 million) in fraudulent nursing visits” and “passed money from Newton to two Arbor patients in order to retain them.”
By luring the patients into the scheme, the two billed for services that were neither rendered nor needed.
According to the prosecutor, “Arbor, through Newton and others, developed employment relationships” with patients’ relatives who purported to offer services. They would also pay kickbacks for patient referrals, regardless of medical necessity requirements, in a scheme that saw Arbor’s income run into millions. By entering into “sham” employment relationships with patients’ family members, according to the prosecution, it was easy for Arbor to purport “to provide home health aide services that were not medically necessary and routinely billed for fictitious visits that did not occur”.
For instance, said the charge sheet, “Waruru and Arbor billed MassHealth for Waruru’s skilled nursing visits, many of which she did not perform, were medically unnecessary, or were not approved by a physician.”
According to the civil complaint, Newton targeted low-income, disabled, and/or people with mental health issues. Additionally, Newton is alleged to have laundered the illegally acquired wealth.
The court records indicate that Arbor was registered by a Mr Njoroge Muiruri, a registered nurse, and it ceased to exist in 2017 after he filed a certificate of cancellation with the Massachusetts Secretary of State. It is not clear whether the company folded due to the investigations.
The indictments of health care fraud, conspiracy to commit health care fraud, money laundering conspiracy, and money laundering each offer a jail term of up to 10 years, three years of supervised release, and a fine of up to $250,000 or twice the amount of the money involved in the laundering.
The conspiracy to pay kickbacks, make false statements, and make a false statement in health care matters each provides for a sentence of up to five years in prison, three years of supervised release, and a fine of up to $250,000.