Three Defendants Charged With Stealing More Than $485,000 By Filing Claims for Mental Health Treatments Never Received

Manhattan District Attorney Cyrus R. Vance, Jr., and New York State Department of Financial Services Superintendent Benjamin M. Lawsky announced the arrests of three individuals for defrauding insurance companies and employment health plans of more than $485,000. The defendants are accused of submitting hundreds of false claims for mental health care treatments that they never received. SUDHA KAILAS, 33, HERLINA LUIS, 37, and JANICE SICH, 52, have been charged with Grand Larceny and Insurance Fraud, among other charges.[1]

“Health care fraud, such as the scams perpetrated by the defendants in these cases, harms honest policyholders by contributing to higher insurance rates,” said District Attorney Vance. “My Office’s Special Prosecutions Bureau is committed to prosecuting insurance fraud in whatever form it takes. I thank Superintendent Lawsky and the Department of Financial Services for their assistance in this investigation.”

Financial Services Superintendent Benjamin Lawsky said: “Whether as Attorney General or as Governor, Governor Cuomo has made clear that in New York, if you prey on consumers with scams and frauds, you are going to be prosecuted aggressively and to the fullest extent of the law. False and fraudulent insurance claims drive up everyone's rates and we must fight and deter this fraud with every tool we have. It adds insult to injury that in this case a psychiatrist was part of the alleged scheme to file false mental health claims. The Cuomo Administration will not tolerate dirty doctors and other health care providers who abuse the trust that patients and society put in them. I thank and congratulate District Attorney Vance and his team for bringing this important prosecution.”

OptumHealth Behavioral Solutions (“OHBS”), a mental health insurance carrier, requires policy holders who receive treatment from out-of-network providers to pay for the treatment themselves and then submit claims to OHBS for reimbursement.

KAILAS, a practicing psychiatrist, is accused of falsely claiming that she paid more than $50,000 for mental health treatments for herself from four out-of-network doctors. From June 2009 to September 2011, KAILAS filed 206 claims for reimbursement from OHBS for treatments that she did not receive, and she was paid by OHBS for each of those claims. She also filed 19 other claims for legitimate treatments, but fraudulently inflated the amount that she paid her doctors. KAILAS is accused of stealing a total of $32,428 from OHBS.

According to documents filed in court, LUIS was an employee of Exent Technologies and was also insured through OHBS. From July 2010 to November 2011, LUIS is accused of submitting more than 1,000 false claims to OHBS seeking reimbursement for approximately $257,000 worth of mental health services that were supposedly provided to her and her family by a doctor in Brooklyn. In fact, both the services and the doctor were fictitious.

According to documents filed in court, from 2006 to 2011, SICH, a former employee at Pfizer, submitted more than 1,700 claims to her company for reimbursement for mental health care that she did not receive. In addition to submitting the false claims, SICH filed 38 claims for legitimate treatment, but fraudulently inflated the amount that she had paid. She was paid a total of $353,958.96 by Pfizer on the false and inflated claims and tried to steal another $33,000 by submitting several claims multiple times. Pfizer fully funds its own employee health plan and suffered the financial loss.

Assistant District Attorneys Lucrece Francois, Heather Manley, and Douglas Kaufman are prosecuting these cases under the supervision of Thomas Wornom, Chief of the Special Prosecutions Bureau, and Deputy Bureau Chiefs Archana Rao and Judy Salwen. District Attorney Vance thanked the District Attorney’s Investigation Bureau, supervised by Chief Investigator Walter Alexander, for its assistance in the case. District Attorney Vance also thanked Douglas Libertucci, Investigator with the NYS Department of Financial Services (DFS) Criminal Investigations Unit, who investigated the cases under the supervision of Frank Orlando, Director of Criminal Investigations for DFS, and under the overall supervision of Joy Feigenbaum, Executive Deputy Superintendent of DFS, and Benjamin M. Lawsky, Superintendent of Financial Services.

Defendant Information:

SUDHA KAILAS, D.O.B. 01/08/1979
New York, NY

Charges:
• Insurance Fraud in the Second Degree, a class C felony, 1 count
• Grand Larceny in the Third Degree, a class D felony, 1 count
• Falsifying Business Records in the First Degree, a class E felony, 206 counts

HERLINA LUIS, D.O.B. 01/19/1975
Brooklyn, NY

Charges:
• Grand Larceny in the Second Degree, a class C felony, 1 count
• Attempted Grand Larceny in the Second Degree, a class D felony, 1 count
• Insurance Fraud in the Second Degree, a class C felony, 1 count
• Insurance Fraud in the Third Degree, a class D felony, 13 counts
• Insurance Fraud in the Fifth Degree, a class A misdemeanor, 2 counts
• Falsifying Business Records in the First Degree, a class E felony, 15 counts

JANICE SICH, 12/09/1959
Vernon Hills, IL

Charges:
• Grand Larceny in the Second Degree, a class C felony, 1 count
• Attempted Grand Larceny in the Third Degree, a class E felony, 1 count
• Falsifying Business Records in the First Degree, a class E felony, 18 counts

[1] The charges contained in the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

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