CRAWFORD HEALTHCARE MANAGMENT OF NORFOLK AND BALTIMORE, INC. PLEADS GUILTY TO MAIL FRAUD SCHEME

WASHINGTON, D.C. - Assistant Attorney General Christopher A. Wray of the Criminal Division and U.S. Attorney Paul J. McNulty of the Eastern District of Virginia, announced today that Crawford Healthcare Management of Norfolk & Baltimore (“Crawford of Norfolk and Baltimore”) has pleaded guilty to engaging in a mail fraud scheme.

At a hearing at U.S. District Court for the Eastern District of Virginia in Norfolk, Crawford of Norfolk and Baltimore pleaded guilty to a one-count information charging that the company engaged in a scheme to defraud its clients by overcharging them for the services performed by its employees. The company will pay a criminal fine of $8 million as part of the plea agreement reached with the government.

Crawford of Norfolk and Baltimore is a wholly-owned subsidiary of Crawford & Company, Inc., a publicly-traded company headquartered in Atlanta, Georgia that provides vocational rehabilitation and healthcare management services to insurance companies and self-insured entities.

“When companies in the healthcare industry cheat their clients, they’re also victimizing the government, taxpayers, private companies and patients,” said Assistant Attorney General Christopher A. Wray. “The Department of Justice remains firmly committed to investigating and prosecuting cases of fraud and abuse in the healthcare industry.”

Today’s plea is the culmination of a multi-year investigation into the billing practices of Crawford & Company, Inc. Crawford of Norfolk and Baltimore is comprised of two former Crawford & Company, Inc. branch offices located in Norfolk, Virginia and Baltimore, Maryland.

The fraud scheme outlined in the criminal information charges that Crawford of Norfolk and Baltimore, from 1992 through September 1999: (1) agreed to charge clients on a time and expense basis, but instead billed many clients for amounts in excess of actual time and expense; (2) agreed to charge clients for reimbursement of actual expenses and actual costs incurred by the company, but actually inflated the amount of those expenses and costs when billing many clients; (3) agreed to pro-rate time and expense charges of some clients, but instead billed some of those clients for the full cost of those charges; and (4) agreed to provide a certain service at no charge and then charged for that service by fraudulently allocating the time expended in the provision of that service to unrelated claimant files.

U.S. Attorney Paul J. McNulty said, “The success of this case is the result of outstanding teamwork by several law enforcement agencies. It demonstrates the federal commitment to detect and punish health care-related fraud.”

The case was prosecuted by Fraud Section Trial Attorney William B. Jacobson and Senior Trial Attorney William H. Stapleton. Assistant U.S. Attorney Michael Smythers of the Eastern District of Virginia and Assistant U.S. Attorney Charles Peters of the District of Maryland assisted the prosecution. Special Agent John Schlotterer of the Defense Criminal Investigative Service, (“DCIS”) Norfolk Resident Agency, was the lead investigator of the case. Other investigators included: Special Agent Robin Grier, Department of Labor Office of Inspector General; Elizabeth Jonns, Defense Contract Audit Agency; Special Agent Stephanie Ledden, DCIS, Special Agent Lisa Schmadtke, Federal Bureau of Investigation; Supervisory Special Agent David R. Glendinning, Department of Justice Office of Inspector General; Inspector Stephen G. Durst, United States Postal Inspection Service; Program Analyst Steve Shandy, Department of Justice; and Paralegal Laura Rousseau, Department of Justice.

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