Former employees sue health care fraud suspects

December 18, 2018

Two home health care companies that closed after a federal grand jury indicted executives at the businesses on multiple charges of defrauding Medicare out of $150 million are now being sued by nine employees alleging that they were fired without notice and not paid.

The Waco-based employees filed the lawsuit on Dec. 14 in Brownsville alleging BRM Home Health and Merida Health Care violated the Wages and Fair Labor Standards Act and the Worker Adjustment and Retraining Notification Act, which are laws protecting employees facing mass layoffs and establishing minimum wage and overtime pay.

The litigation also names Henry McInnis, 47, and Jose Garza, 40, both of Harlingen, both of whom helped control and manage Merida Health Care Group, a collection of health care entities owned by Rodney Mesquias, 47, of San Antonio, who is also named in the lawsuit. The last defendent is Francisco Pena, 82, of Laredo, a licensed physician, who is also the outgoing mayor of Rio Bravo, Texas, who was medical director for for the Merida Group’s affiliates, according to the U.S. Attorney’s Office for the Southern District of Texas.

All of those men, in addition to Jesus Virlar-Cadena, are charged in a 12-count indictment accusing them of conspiracy to commit healthcare fraud, conspiracy to commit money laundering, aiding and abetting, obstruction of justice and conspiracy to pay and receive kickbaks in a scheme that spanned a wide area in South Texas, including Brownsville, Harlingen, Corpus Christi, Laredo and San Antonio.

According to the litigation, Merida Health Group and BRM Home Health abruptly announced on April 25 that it would immediately close its offices and fire its employees.

The nine employees allege that Merida Health Group, BRM Home Health, McInnis, Garza, Mesquias and Pena did not pay them at least minimum wage for time encompassing their last two paychecks and failed to provide adequate notice under the Worker Adjustment and Retraining Act, or WARN Act, of the terminations and has failed to remedy that lack of notice.

The civil suit hinges on the indictment against McInnis, Garza, Mesquias and Pena.

Federal prosecutors allege the conspiracy revolved around kickbacks and bribes to medical doctors in exchange for certifying that patients qualified for services, when they did not, and referring patients. The men are also accused of fraudulently keeping patients in hospice care for multiple years to increase revenue from Medicare.

The indictment accused the men of using the fraudulently gained monies to fund lavish lifestyles that included the purchase of a Porsche, expensive jewelry, Louis Vuitton luxury clothing, exclusive real estate and even season tickets for premium seating at San Antonio Spurs games.

"It was because of this fraud that the Defendants were forced to close their business without notice of final payment to plaintiffs," the lawsuit states.

Authorities charged the men on Jan. 9 and they closed their business three months later.

The litigation accuses McInnis, Garza, Mesquias and Pena of enriching themsleves through a fraudulent scheme at the expense of their employees. They have not yet responded to the lawsuit.

The case against the men has been ruled complex, which has pushed a trial date later into 2019, court records show.

Federal prosecutors said in court documents that there are a large number of witnesses, including chaplains, social workers, marketers, billers, administrators, employees, nurses and patients. The evidence is extensive and voluminous and includes Medicare claims data, patients records and banking records, according to prosecutors.

There are also recorded meetings between various confidential sources and cooperating witnesses with Pena, who allegedly told a cooperating witness that hospice patients were an avenue to profit "by keeping them alive as long as possible."


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