Criminal Investigative Updates

The US and the State of Washington filed a complaint in a federal court against MultiCare Health System, which owns and operates MultiCare Deaconess Hospital and MultiCare Rockwood Clinic in Spokane. The complaint alleges that MultiCare knowingly endangered patient safety and falsely and fraudulently billed federal healthcare programs for spinal surgery procedures performed at Deaconess between 2019 and 2021 by Jason Dreyer, a former neurosurgeon. Between 2013 and 2019, Dr. Dreyer practiced at Providence St. Mary’s Medical Center in Walla Walla, Washington, a hospital owned and operated by Providence Health & Services. In 2019, amidst allegations that he was performing medically unnecessary surgeries, harming patients, and falsifying diagnoses, Providence permitted Dr. Dreyer to resign. The complaint alleges that during MultiCare’s hiring process, it became aware of concerns about Dr. Dreyer and his surgical judgment from his time at Providence, but, recognizing that he was a “workhorse” made the decision to hire him and allow him to begin seeing patients and performing surgery at Deaconess Hospital in July 2019. The VA OIG, Department of Health and Human Services OIG, Office of Personnel Management OIG, the Defense Criminal Investigative Service, and the State of Washington Attorney General’s Medicaid Fraud Control Division investigated this case.

Edward Cannatelli, Robbyn Cannatelli (both of Parkland), Thomas Farese (of Fort Lauderdale), and Virginia Lockett (of Margate) were indicted for their roles in a conspiracy to defraud the Medicare program, make false statements relating to health care matters, and offering and paying illegal kickbacks and bribes. They are also charged in a second conspiracy to commit wire and health care fraud, and with related substantive counts concerning the falsification of records in the federal investigation leading to the indictment. Allegedly, beginning in June 2019 and continuing into at least June 2020, they and other conspirators generated medically unnecessary physicians’ orders via a telemarketing operation for certain orthotic devices—knee braces, back braces, wrist braces, and other braces—referred to as durable medical equipment (DME). The orders were then transmitted to purported “telemedicine” vendors that, in exchange for a fee, paid illegal kickbacks and bribes to physicians who signed the orders, often without ever contacting the beneficiaries to conduct the required telehealth consultations. The fraudulent, illegal brace orders were then returned to the conspirators, who used the orders as support for bogus DME claims submitted to Medicare. To avoid Medicare scrutiny, the conspirators spread the fraudulent claims submitted to Medicare across three DME storefronts operated under the conspirators’ ownership and control. The VA OIG and Health and Human Services OIG investigated this case.

Donald Estes, of Bath, New Hampshire, was charged with four counts of bank fraud and four counts of mail fraud for allegedly stealing approximately $225,000 from an elderly disabled veteran who lived at a nursing home and received monthly disability payments from the VA. The veteran was unable to manage his money or make decisions independently. In 2020, the nursing home contacted Estes asking whether he would serve as the veteran’s legal guardian. Estes never applied to become the guardian; however, he had the veteran sign an agreement granting him access to the veteran’s bank account. Over the next several years, Estes took funds from the veteran’s account to make personal purchases. The VA OIG and the US Postal Inspection Service investigated this case.

Ishwanzya Rivers, of Cincinnati, Ohio, was arrested on charges she misappropriated money that she was managing on behalf of four veterans. Allegedly, Rivers made false statements to the federal government to cover up her theft and stole more than $133,000 from one elderly veteran who lived in the VA hospital in Cincinnati. She misappropriated the victim’s money at least 45 times and stole smaller amounts of money from three other elderly or infirm veterans, totaling more than $15,000. Rivers used the money for shopping, at restaurants, and to travel to New Orleans, Montego Bay, Cancun, London, Panama, Zurich, Vienna, and the Maldives. The VA OIG is investigating this case.

The Justice Department announced the results of its 2025 National Health Care Fraud Takedown, which resulted in criminal charges against 324 defendants, including 96 doctors, nurse practitioners, pharmacists, and other licensed medical professionals, in 50 federal districts and 12 State Attorneys General’s Offices across the United States, for their alleged participation in various healthcare fraud schemes involving over $14.6 billion in intended loss. The Takedown involved federal and state law enforcement agencies across the country and represents an unprecedented effort to combat health care fraud schemes that exploit patients and taxpayers. It was led and coordinated by the Health Care Fraud Unit of the Department of Justice Criminal Division’s Fraud Section and its core partners from the U.S. Attorneys’ Offices, Health and Human Services OIG, Federal Bureau of Investigation, and Drug Enforcement Administration. The VA OIG, Centers for Medicare and Medicaid Services, Homeland Security Investigations, Internal Revenue Service Investigation, Defense Criminal Investigative Service, Department of Labor, United States Postal Service OIG, Office of Personnel Management OIG, and other federal, state, and local law enforcement agencies participated in the operation.

“VA’s Integrated Veteran Care Programs provide critical community-based health care to our nation’s disabled veterans and their dependents,” said Acting Inspector General David Case of the VA OIG. “Robust oversight of VA’s health care system is one of VA OIG’s highest priorities. The VA OIG is committed to holding accountable those who defraud government benefits programs intended to care for our nation’s heroes.”

As part of the Justice Department’s 2025 National Health Care Fraud Takedown, Randal Fenton Wood, of Flagler Beach, Florida, was charged by information with conspiracy to commit healthcare fraud in connection with a scheme to bill Medicare, the VA’s Civilian Health and Medical Program, and other insurance programs for medically unnecessary durable medical equipment (DME). It is alleged that Wood and others partnered with purported marketing entities which solicited beneficiaries to accept DME by illegally waiving copays and pressuring beneficiaries to accept the equipment without verifying that the equipment was medically necessary. The marketing entities sold the beneficiary information and the prefilled orders to Wood and other DME supply companies, who pressured physicians into signing or altering orders so that they could be billed in full. The DME supply companies owned by or affiliated with Wood received over $39 million in reimbursement from Medicare for DME ordered through this scheme. This case was investigated by the VA OIG, HHS OIG, Defense Criminal Investigative Service, and FBI.