Wisconsin Adult Family Home Operator Sentenced to 28 Months for Healthcare Fraud: Billed for Care Never Provided, Stole More Than $1.25 Million From Medicaid
The U.S. Attorney's Office for the Eastern District of Wisconsin announced on October 28 that Lori Butts, 49, the former operator of adult family homes, was sentenced to 28 months in prison for a healthcare fraud scheme through which she stole $1,253,920.47 from a Medicaid-funded program designed to provide residential care services for disabled Wisconsin residents.
Butts previously operated Lordan Care Adult Family Homes, a company that provided residential services to Medicaid beneficiaries. The government authorizes these services on a beneficiary-by-beneficiary basis. All residents in the program are placed in a multi-bedroom apartment that has 24-hour supervision by a caregiver, and some residents also receive one-on-one care from a worker in addition to this caregiver.
Butts admitted that from July 2019 to December 2020, she billed for hours of care work never provided.
In particular, she billed for two workers to provide dedicated service, 24 hours per day, to a single resident, but those caregivers were not present. Prosecutors said her adult family homes were severely understaffed and experienced frequent police contact, often when staffing levels were insufficient to address volatile or inappropriate resident conduct.
In announcing the sentence, United States District Judge J.P. Stadtmueller emphasized the "reprehensible" nature of the conduct. He noted that "the taxpayers were bilked" because they paid for tens of thousands of hours of caregiver time that Butts's company simply did not provide, and that billing for unworked hours while accepting the agency's money was the "functional equivalent of grand larceny." The judge also explained that the significant sentence was necessary to send a message of deterrence to others considering fraud against government healthcare programs.
In addition to the 28-month prison sentence, Judge Stadtmueller ordered Butts to pay restitution to Medicaid of $1,253,920.47.
"When the defendant stole this money, she took it from every American taxpayer and diverted it from individuals who needed help," said First Assistant U.S. Attorney Brad D. Schimel. Alan Karr, Special Agent in Charge of the FBI's Milwaukee office, said Butts billed for services never provided to disabled Wisconsin adults and that the FBI remains committed to holding accountable individuals who defraud the government. Robert J. Kuszynski, Acting Special Agent in Charge of IRS Criminal Investigation's Chicago Field Office, said Butts turned a promise to care for someone into a payday, and that her prison sentence is the price of that choice.
The case was investigated by the Federal Bureau of Investigation and IRS Criminal Investigation, and prosecuted by Assistant United States Attorneys Carter B. Stewart and Zachary J. Corey.
Source: GSM · USA (original Chinese edition)
Photo: 图：美国联邦调查局（FBI）总部胡佛大楼。本案由FBI参与调查。ajay_suresh摄，CC BY 2.0，经Wikimedia Commons。 / The J. Edgar Hoover Building, headquarters of the FBI, which investigated this case. Photo by ajay_suresh, CC BY 2.0, via Wikimedia Commons.
