Friday, February 29, 2008

Fort Worth nursing home exec pleads guilty to conspiracy and tax evasion

By Pegasus News wire

Gary R. Trebert, 57, pled guilty before U.S. Magistrate Judge Charles Bleil on Wednesday to two counts of an indictment that charged him with various offenses related to his operation of nursing homes in Texas and elsewhere, announced U.S. Attorney Richard B. Roper of the Northern District of Texas. Co-defendant Larry Gordon May pled guilty to his role in the conspiracy in October 2007 and is scheduled to be sentenced on April 28. Co-defendant Stephen Michael Ewing, a/k/a “Stephen Michaels,” is scheduled to go on trial March 3.

Trebert pled guilty to conspiracy to defraud the government by obstructing and impeding lawful government functions of the IRS and the Department of Health and Human Services and tax evasion and aiding and abetting. He faces a maximum statutory sentence of 10 years in prison, a $500,000 fine, and restitution that will be determined by the Court based on all of his criminal conduct relating to the offenses charged in the indictment, including, but not limited to, unpaid taxes and unlawfully obtained health-care payments. The government will, however, as per the plea agreement, make a non-binding recommendation that the Court sentence Trebert to a term of eight years in the custody of the Bureau of Prisons. Trebert is scheduled to be sentenced by U.S. District Judge Terry R. Means on July 14, 2008.

U.S. Attorney Roper said, “This case is the one of the largest payroll tax fraud cases ever prosecuted in the U.S. Mr. Trebert admitted evading more than four billion dollars in payroll taxes - this is nothing short of egregious. Nursing homes should be safe havens for the elderly and vulnerable, not vehicles for criminals to commit fraud.”

Trebert admitted that beginning in August 1999 and continuing though mid-May 2004, he, Stephen Michael Ewing and Larry May conspired together, and with others, to defraud the U.S. by impeding, impairing, obstructing, and defeating the lawful government functions of the IRS in the ascertainment, computation, assessment, and collection of the revenue, that is, nursing facility employees’ withheld income taxes, social security taxes and medicare taxes, and HHS in the administration of the Social Security Act and the Medicare and Medicaid programs.

As part of the conspiracy, Trebert and his co-conspirators, using the names of sham corporate entities, obtained control of 70 licensed nursing facilities with thousands of patient beds and thousands of employees. In order to acquire control of these facilities, Trebert, Ewing and May used false statements and false and fraudulent documents including Applications for Nursing Facility License and Medicaid Contracts, Medicare Federal Provider Enrollment applications, ownership documents, IRS Employer Identification Number applications, Health Insurance Benefit Agreements, and Electronic Fund Transfer forms. Their falsifications included falsely identifying relatives as owners, operators, and managers of the nursing homes on the applications; failing to disclose staffing/payroll companies on nursing home applications; failing to disclose Ewing and May as the true owner/operators of nursing homes; and forging names of individuals on filed documents to divert responsibility away from the three defendants. Trebert and his co-conspirators used the false statements and documents to hide from HHS, state licensing and Medicaid agencies, and the IRS, the true control and management of the nursing facilities, their responsibility for more than $200 million in money derived from the nursing homes, and their responsibility for the nursing facilities’ residents.

More than 150 sham staffing/payroll entities, many with foreign business addresses at drop boxes in England and Austria, were created to file Form 941 employer withholding tax returns with the IRS, preventing the IRS from assessing and attempting to collect more than $34 million of unpaid payroll tax liabilities from Trebert, Ewing and May, and creating the appearance that these sham staffing/payroll entities employed more than 4500 nursing facility employees, when they did not. From time to time Trebert caused his co-conspirator to fly to London in order to mail to the IRS the sham payroll/staffing companies’ false withholding tax returns.

Trebert admitted that he and his co-conspirators diverted to themselves and their personal activities substantial sums of money derived from their nursing home operations and from the non-payment of employees’ withheld payroll taxes. Trebert also admitted that in April 2004, he attempted to evade and defeat the assessment and payment of more than $4,113,000 in withholding taxes taken out of employees’ pay at 42 nursing homes he and his co-conspirators controlled.

U.S. Attorney Roper praised the investigative efforts by federal and state agencies including, Internal Revenue Service - Criminal Investigation, U.S. Department of Health and Human Services Office of Inspector General, Federal Bureau of Investigation, U.S. Postal Inspection Service, Texas Office of the Attorney General - Medicaid Fraud Control Unit, and state agencies from Kansas, Iowa, Oklahoma and Virginia. The case is being prosecuted by Assistant U.S. Attorneys Ron Eddins and Alan Buie.

Source: Department of Justice

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Comments

Kay Anonymous

I didn't notice the NAMES of the Nursing Homes of which the jerks ...uh..."execs" obtained control ( 70 licensed nursing facilities with thousands of patient beds ).

7 months, 2 weeks ago ( Link to this comment | Suggest removal )