Other LanguagesMarysville company defrauded taxpayers for years
SEATTLE — Attorney General Bob Ferguson today announced a judgment of more than $2.79 million in his lawsuit against a Marysville company that defrauded taxpayers nearly $1 million over a period of years. This is the first trial in a Medicaid False Claims Act case in Washington state history. Ferguson’s agency-request legislation renewed the act in 2016.
“Medicaid dollars are a precious resource meant to care for the most vulnerable among us,” Ferguson said. “This result will help future efforts to fight fraud and ensure Medicaid funds go toward Washingtonians’ health care needs.”
King County Superior Court Judge John Ruhl ruled that the company, Relationship Toward Self-Discovery (RTS), its owner and president Laird Richmond, and manager and treasurer Jason Lowery were all liable for fraud and the presentation of false Medicaid claims for payment under the Washington Medicaid False Claims Act.
RTS operated a residential care facility in Marysville for developmentally disabled adults. The facility closed in 2016.
While it was in operation, RTS required employees to stay overnight at the facility in order to provide care to the residents as needed. Washington law requires employers to pay this type of employee a “sleep rate,” and their regular rate if they are actually called upon to perform their job.
In its Medicaid claims from 2012 through 2015, RTS reported paying 60,328 sleep hours to its employees, and received $928,221 in reimbursement from Medicaid.
In fact, RTS did not pay its employees this rate at all.
RTS paid these employees a small amount of overtime instead. In 2012 alone, the difference between the actual amount paid to employees and the amount reported to Medicaid totaled more than $200,000.
The conduct came to light because of a whistleblower. A former bookkeeper reported the company’s conduct in a complaint to the court.
Ferguson filed his lawsuit April 16, 2016. Since then, the company folded and Richmond died. The company and Richmond’s estate are still subject to the court’s judgment.
Judge Ruhl found that RTS, Richmond and Lowery defrauded Medicaid of $928,221. Because the case went to trial, the law requires the actual damages be tripled, resulting in $2,784,663 in damages. The court also assessed a $5,500 civil penalty, and ordered the defendants to pay the state’s costs and fees related to bringing the case. The amount of those fees will be determined at a later date.
The whistleblower is entitled to 25 percent of the state’s recovery. The remaining 75 percent of the funds go toward future Medicaid fraud enforcement efforts.
Assistant Attorneys General Katrina King, Matthew Kuehn and Senior Investigators Kim Triplett, Ses Maiava, Chief Forensic Analyst Sonja Winkelman and paralegal Saphron Weatherly handled the case for Washington.
The Attorney General’s use of the Medicaid False Claims Act has been highly effective. In a 2015 report, a legislative committee noted that since the act’s original passage up to that time, civil fraud recoveries increased 28 percent, and the state has recovered $3 for every $1 invested in enforcement under the act.
Report Medicaid fraud in Washington
The Attorney General's Medicaid Fraud Control Division is responsible for the investigation and prosecution of Medicaid provider fraud. The division also has oversight of all residential facility abuse and neglect matters, bringing criminal and civil prosecutions regarding abuse and neglect in cases involving vulnerable adults residing in residential facilities.
Report suspected Medicaid fraud at 360-586-8888 or MFCUreferrals@atg.wa.gov.
You can also report provider fraud via the AGO website ww.atg.wa.gov/medicaid-fraud.
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The Office of the Attorney General is the chief legal office for the state of Washington with attorneys and staff in 27 divisions across the state providing legal services to roughly 200 state agencies, boards and commissions. Visit www.atg.wa.gov to learn more.
Contacts:
Brionna Aho, Communications Director, (360) 753-2727; brionna.aho@atg.wa.gov