Medicaid fraud indictment links suspect to Charlotte consultant

A North Carolina man has been indicted on charges he used phony invoices to bilk millions of dollars out of Medicaid – in some case three times the amounts his co-conspirators thought he was getting.

Jason Adam Townsend, 39, faces 10 separate counts of health care fraud conspiracy and aggravated identity theft. Each conspiracy charge carries a maximum penalty of 10 years in prison and a $250,000 fine; each identity theft count has a two-year mandatory sentence that is served after any other imprisonment.

Townsend, of Raeford (about 120 miles east of Charlotte), made his initial appearance in court Tuesday before U.S. Magistrate Judge David Cayer.

According to the U.S. attorney’s office, Townsend helped start a company that provided billing and related services to mental health care offices and other health providers.

For two years, his company worked with Cynthia Harlan of Charlotte, who advertised herself as a consultant specializing in the operation of mental health company and Medicaid reimbursement, prosecutors say. She was indicted on health care fraud conspiracy and other charges in September. Four other alleged conspirators, including the heads of two participating health care agencies, have pleaded guilty in connection with the scheme.

Here’s how investigators say it worked:

Under Harlan’s direction and tutelage, Townsend and his medical-billing company, Townhall Enterprises, were taught how to file fraudulent reimbursement claims with Medicaid. Townsend, according to prosecutors, received billing spreadsheets from the participating groups. That gave him access to the names of Medicaid beneficiaries, their ID numbers, and the treatment they received. The participating groups paid Townsend a kickback for filing their phony claims, prosecutors say.

But Townsend took it a step further. In some cases, he sought reimbursement amounts that were twice to three times the size of the original fraudulent claims, investigators say.

Over a two-year period, his markup amounted to millions of dollars in Medicaid money, investigators say.

Michael Gordon: 704-358-5095, @MikeGordonOBS