Thursday, August 23, 2012

Elder Health Care Fraud Case In Court

Article originally published by on 8/22/2012 by Margaret Gibbons. Link to original story may be found here.

A co-defendant Tuesday pointed the finger at an Upper Southampton man as the one who allegedly spearheaded a home health services insurance scam bilking thousands of dollars from seniors for services that were never provided.
Bruce H. Cherry, 52, of Philadelphia, testified on the witness stand that he sold many of the American Home Care service contracts to the seniors, who primarily were school teachers. However, when he would receive calls from clients and/or their representatives that they were not receiving the services they requested, he would turn that information over to Ross M. Rabelow, 53, of the 500 block of Jason Drive, Upper Southampton.
In one particular case, Cherry said, he received repeated calls from a client’s roommate requesting services for the woman. He said he told the roommate that someone from the office would get back to her.
Cherry, who said he was concerned he would lose his commission on the sale of the contract if the services were not provided and the contract was voided, testified he also told Rabelow about the calls.
“Ross told me it was none of my business,” said Cherry, who was wearing a navy blue inmate uniform from the Montgomery County prison where he has been held in lieu of $1 million bail since his arrest May 21. “(Rabelow) said it was his business to provide the services. My job was just to sell the contracts.”
Cherry said that, “to the best of my knowledge,” the woman never received the services for which she had paid and which had been requested.
Cherry’s testimony came during the first day of Rabelow’s preliminary hearing before District Judge Paul N. Leo, who will have decide whether there is sufficient evidence to hold Rabelow for trial.
Like Cherry, Rabelow is charged with participating in a corrupt organization, theft, unfair business practices, insurance fraud, conspiracy and dealings in proceeds of unlawful practices.
Rabelow posted $1 million in cash bail on June 21 and has been out of jail since then.
Thomas J. Muldoon, 58, a Delaware County resident and the third suspect in the case, is behind bars in lieu of $1 million bail. Robert P. Lerner, 56, of Philadelphia, is the fourth co-defendant. Charged with most of the same charges except for corrupt organizations, Lerner has been in jail in lieu of $250,000 cash bail.
Cherry, Muldoon and Lerner all have waived their rights to a preliminary hearing and now will be scheduled for trial in county court on the charges brought against them by the state Attorney General’s Office.
Senior Deputy Attorney General M. Eric Schoenberg, who is prosecuting the case, said no immunity was offered to Cherry for his testimony and no deal has been cut as a result of his cooperation.
Defense attorney Gregory Noonan told Leo that there was no specific deal.
Schoenberg declined comment on whether Cherry’s cooperation will be considered at the time of sentencing if he is convicted of the charges against him.
“Generally speaking, when a defendant cooperates, there is some expectation on his part that that cooperation will be reflected in any sentence,” said Schoenberg.
In announcing the arrests of the four at a press conference on May 22, state Attorney General Linda Kelly alleged the four had sold seniors thousands of dollars of contracts for bogus home care, home security and counseling services.
At that time, Kelly reported that there were at least 218 alleged victims who were bilked a combined $700,000-plus. Since that time, additional alleged victims have come forward and additional charges have been filed against the four. However, to date, the new number of alleged victims and the dollar amounts have not been tallied.
The bulk of the victims, including a handful that lived in three other states, are primarily from Southeast Pennsylvania including 10 to 15 victims each from Montgomery, Bucks, Delaware, Northampton, Lancaster and Berks counties. The largest number of victims, 24, live in Lehigh County.
The average age of the victims was 83, according to Kelly. Most were women, widowed and living alone without nearby family, said Kelly.
Testifying earlier at Rabelow’s preliminary hearing, Special Agent Karen M. Tempinski said the Attorney General’s Office began looking into the scam after fielding a complaint from a Hatboro senior who said she had purchased insurance counseling services but that the service had failed to pay the premium for a legitimate health care policy that she had even though she had written the service a check to cover that premium.
Looking at contracts that the woman had with other companies related to that counseling service, she learned that the woman had a prepaid contract with American Comfort for a specific number of hours of home care services at a cost of between $1.59 and $2.52 an hour. Knowing that was well below the industry rate of between $15 and $20 for such services, Tempinski said that, with the help of an investigating grand jury, she continued the investigation.
Tempinski testified that, in reviewing bank records, she learned that only 3 percent of the money collected from clients went to pay for services. The rest of the funds went into the pockets of those connected with the business while it also was used to pay Rabelow’s mortgage, cars and even student loans.
Tempinski and other investigators began contacting those who purchased the contracts and discovered that often, after requests were made, services were never provided or were only minimally involved.
Testimony will continue Wednesday in Rabelow’s preliminary hearing, which could last into Friday.

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