Prison inmate ran Medicaid fraud scheme through bogus local office

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WACO, Texas (KWTX) A federal prison inmate who ran a Medicaid fraud scheme from behind bars that involved opening a local bank account and leasing local office space that was never used has pleaded guilty to healthcare fraud.

Alexis C. Norman, 47, pleaded guilty Thursday in U.S. District Court to one count of conspiracy to commit healthcare fraud and four counts of healthcare fraud, three of which were committed before she was sentenced in an earlier fraud case and one while that was committed she was behind bars, said Erin Nealy Cox, the U.S. Attorney for the Northern District of Texas.

Norman and a co-defendant, Karen Jones of Cedar Park, were accused of submitting more than $810,000 in fraudulent claims to Medicaid, using the stolen identities of licensed counselors and Medicaid recipients

The two were paid more than $427,000.

Norman pleaded guilty to healthcare fraud in 2015 in a previous case and while awaiting sentencing “concocted the healthcare fraud scheme,” the U.S. Attorney’s Office said in a press release.

In February 2015, prosecutors say, Norman approached Jones with a plan she hoped would help her pay her legal fees and Jones agreed to help.

Jones listed herself as the administrator of Janus Children’s Services, Inc., opened a bank account in Janus’s name and leased office space in Tyler that was never occupied, prosecutors say.

After Medicaid paid Janus for the bogus claims, Norman had Jones withdraw cash from the company’s bank account about once a month in amounts less than $9,500, prosecutors said.

Afterward the two would meet at a restaurant.

After eating, Jones would leave the cash in a gift bag on a chair for Norman, prosecutors said.

That continued until Norman was imprisoned in April 2016.

While she was behind bars she and Jones created a second bogus company, Therapeutic Outreach, for which a bank account was opened and office space was leased in Waco, prosecutors said.

“Jones and her co-conspirators selected Waco, Texas for an office location to conceal the fraud of law enforcement authorities in the DFW area that investigated a similar prior fraud,” an indictment says.

“Other than using the office’s address for various Medicaid applications and submissions, Jones and her co-conspirators never occupied or used the office space in Waco,” the indictment says.

Jones visited Norman in prison regularly to gather billing instructions as well as identifying information for counselors and clients, prosecutors said.

“Ms. Norman concealed the information on a piece of paper hidden in her shoe, which she retrieved during Ms. Jones’ visits,” the U.S. Attorney’s Office said.

Norman could be sentenced to as much as 80 years in prison land faces mandatory restitution and a $250,000 fine for each of the five counts, authorities said.

She’s scheduled for sentencing on March 9.

Jones, who has also pleaded guilty, could be sentenced to as much as five years in prison and faces mandatory restitution and a $250,000 fine.

She’s scheduled for sentencing on Jan. 14.