SHELL GAMES: A Reuters Investigation
Articles in this series explore the extent and impact of corporate secrecy in the United States.
GAINESBORO, Tennessee (Reuters) - The tip that came to authorities in Tennessee last year seemed almost too bizarre to be true.
In August 2010, the inspector general’s office of the Health and Human Services Department in Tennessee was told by a watchdog group about a Medicare provider called Gainesboro Ultimate Med Service Corp. According to federal court records, the clinic was located in the town of Gainesboro, a town between Nashville and Knoxville.
In the two months before the inspector general began investigating, Gainesboro Ultimate displayed an unusual billing pattern. It charged Medicare more than $220,000 — and was paid at least $50,000 — for injections of pegademase bovine. The medication is used to treat a rare ailment called Severe Combined Immunodeficiency Disease, also known as “Bubble Boy disease” because its victims must live in a sterile environment.
What made the billings especially odd was this: There were no known cases of Bubble Boy disease among Gainesboro’s 962 residents, say law enforcement and local health officials.
Investigators subsequently discovered what they believe to be a fraud within a fraud, insulated by a shell company. The patients who allegedly received treatments for Bubble Boy disease lived in Miami, even though the bills indicated they lived in Gainesboro — at 140 Lonesome Point Lane, a half-finished house on a winding mountain road. The doctor whose Medicare provider number was used by the clinic said he had never heard of the clinic, according to federal court records.
And public records indicate that Gainesboro Ultimate was nothing more than a shell company. Registered on June 29, 2010, it listed its address at 179 Buck Branch Lane and its representative as Yennier Gonzalez. Its president was named Yennier Capote, according to Medicare provider data. The two were the same person.
Yennier Capote Gonzalez was charged with healthcare fraud and money laundering in September 2010, according to an indictment filed in U.S. District Court in Tennessee. He has not yet entered a plea. A trial is pending. Gonzalez could not be located, and his attorney did not respond to a request for comment.
Derrick Jackson, a federal agent with the inspector general’s office, was in charge of the Gonzalez investigation. He says the scheme was enabled by the theft of a real doctor’s identity that enabled Gonzalez to open “a new business on paper.”
In November, a Reuters reporter visited the Bubble Boy clinic at 179 Buck Branch Lane. It sits just off a narrow road that hugs the bank of the Cumberland River. The address never was a medical clinic. It’s a dilapidated barn that houses a rusted bed frame, discarded computer disks and a dozen animal skulls.
A broken black mailbox rests in the weeds out front, still advertising the clinic that never was. It reads, “Gainesboro Ultimate.” (Editing by Blake Morrison)
Reporting By Brian Grow