Acting AG Platkin: owner of NJ mental health clinic chain accused of orchestrating scheme to defraud Medicaid and use clinics to hide million-dollar earnings
Tax evasion scheme
TRENTON — Acting Attorney General Matthew J. Platkin and the Office of the Insurance Fraud Attorney (OIFP) announced today that the owner of a chain of mental health clinics in New Jersey is charged with enlisting the help of his employees to defraud Medicaid in a bogus billing scheme and then, along with his wife, using the clinics to conceal the couple’s income in a million-dollar tax evasion scheme.
Daniel E. Cassell, 56, of Perkasie, Pennsylvania, founder of Kwenyan Professional Health Services, LLC and Kwenyan and Associates (the “Kwenyan Entities”) has been charged with First Degree Money Laundering, Second Degree Theft by deception and multiple counts of conspiracy, insurance fraud and related offenses in an indictment delivered by a state grand jury on August 25, 2022.
The charges stem from a 2019 OIFP investigation which allegedly found that from January 2015 to October 2021, when the Kwenyan entities went out of business, Cassell, with the help of his employees, engaged in schemes to defraud Medicaid and defraud Progressive Insurance Company, which provided auto insurance. coverage of a fleet of more than 20 service vans used by the clinics. A subsequent joint investigation by OIFP and the New Jersey Department of Treasury allegedly revealed that Cassell and his wife, Bindu R. Cassell, 37, of Perkasie, PA, used the Kwenyan entities to hide income and also failed to disclose additional income on their jointly filed 2016, 2017 and 2018 NJ tax returns.
“Individuals who circumvent and skirt the law to defraud state-funded insurance programs and avoid paying their fair share of taxes undermine systems that are vital to the public’s well-being,” the prosecutor said. Acting General Matthew J. Platkin. “We will not allow criminals to line their pockets at the expense of the vast majority of law-abiding New Jerseyans who do not enrich themselves illegally.”
“Insurance fraud and tax evasion are serious crimes with serious consequences,” said Tracy M. Thompson, insurance fraud attorney. “The charges contained in this indictment send a clear message that the OIFP will rigorously investigate anyone suspected of these crimes and hold offenders accountable.”
Cassell is accused of conspiring with and directing Kwenyan employees Carmen C. Ward, 63, of Flemington NJ, and Knyckholle Hooke, 47, of Roselle, NJ, in a fraudulent Medicaid scheme in which thousands of misrepresentations have been submitted to Medicaid for mental illness reimbursement. health services that were never rendered or group services performed but individual or family psychotherapy services billed. The three were charged in the indictment with second degree conspiracy to commit health care claims fraud, second degree health care claims fraud, third degree conspiracy degree to commit Medicaid fraud and third-degree Medicaid fraud.
Cassell is also accused of conspiring with employee John Johnson, 31, of Levittown, Pennsylvania, in a scheme to illegally obtain lower premiums for insurance coverage on the more than 20 pickup trucks used by Kwenyan entities. According to the charges, in obtaining coverage from Progressive Insurance Company (Progressive), Cassell and Johnson falsely claimed that the vehicles, which were parked and operated at Kwenyan clinics located throughout New Jersey, would be parked in Pennsylvania. As a result, the defendants were able to insure the vehicles in Pennsylvania, thereby obtaining an aggregate monetary benefit of over $1,000.
Additionally, Cassell and his wife, who is an officer of the Kwenyan entities, are accused of using their mental health clinics to hide unreported income, including disguising it as loan repayment checks from the Kwenyan entities to Daniel Cassell. The couple are also accused of failing to report more than $11 million in additional income earned in New Jersey on NJ non-resident tax returns they filed jointly in 2016, 2017 and 2018, which resulting in unpaid tax debts of more than a million dollars. They are charged with second degree misconduct of a corporate officer and three counts each of third degree of filing a fraudulent return and failure to pay third degree tax.
Charges are just charges and the accused are presumed innocent until proven guilty. Second degree charges carry a five to 10 year sentence in state prison and a fine of up to $150,000, and third degree charges carry a three to five years in state prison and a fine of up to $15,000.
Assistant Attorneys General Charisse M. Penalver and Vladimir D’Argenio are pursuing the case for the Insurance Fraud Attorney’s Office, Medicaid Fraud Control Unit. The OIFP investigation was conducted by detectives from Medicaid’s Fraud Control Unit. The investigation for the New Jersey Department of the Treasury was conducted by the Division of Taxation, Bureau of Criminal Investigations.
Insurance fraud attorney Thompson thanked the State Comptroller’s Office Medicaid Fraud Division for referring the case to the OIFP.
In New Jersey, the New Jersey Medicaid Fraud Control Unit protects Medicaid beneficiaries and the Medicaid program against fraud, waste, and abuse. The Medicaid Fraud Control Unit is part of the New Jersey Office of the Insurance Fraud Attorney.
New Jersey’s Medicaid Fraud Control Unit receives 75% of its funding from the U.S. Department of Health and Human Services in a grant totaling approximately $4.1 million for the federal fiscal year ( “FY”) 2022. The remaining 25%, totaling approximately $1.3 million for FY 2022, is funded by New Jersey.
To report Medicaid Fraud or Patient Abuse and Neglect, please email [email protected], complete the Medicaid Fraud and Patient Abuse and Neglect Reporting Form, or call 609-292-1272. The Medicaid Fraud Enforcement Unit also hosts presentations to educate the public and the health care industry about Medicaid fraud. For more information on presentations, call 609-292-1272.
To report suspected tax evasion, please call the NJ Treasury, Division of Taxation’s 24-hour registered hotline at 609-322-6057.
For D. Cassell: Lee Vartan, Esq., West Orange, NJ
For B. Cassell: Zach Intrater, Esq., New York, NY
For Ward: Michael R. Shulman, Esq., Jersey City, NJ
For Hooke: Unknown
For Johnson: Unknown