Xerox Pays $236 Million to Settle State of Texas Dental Fraud Case Legal Team: Whistleblowers Dr. Christine Ellis, Madelayne Castillo, Yarubi Morales and others Are Vindicated

Xerox Pays $236 Million to Settle State of Texas Dental Fraud Case
Legal Team: Whistleblowers Dr. Christine Ellis, Madelayne Castillo, Yarubi Morales
and others Are Vindicated

AUSTIN, Feb. 20, 2019 – The $236 million settlement of the State of Texas’ Medicaid fraud
claims against Xerox Corp. business units vindicated whistleblowers Dr. Christine Ellis,
Madelayne Castillo, Yarubi Morales and other whistleblowers, their legal teams said today. The
settlement is the largest recovery ever in a healthcare fraud recovery suit in Texas for Medicaid
related claims.

The State’s lawsuit alleged that Xerox violated the Texas Medicaid Fraud Prevention Act and
“rubber-stamped” prior authorization requests by unqualified clerical employees, allowing “vast
numbers” of orthodontic procedures for children whose condition did not meet Medicaid criteria
for treatment. The company, formerly known as Affiliated Computer Services, Inc., before Xerox
acquired it, also was accused of making false statements or representations in Medicaid filings
with the state.

Dr. Ellis, an orthodontist in Dallas, testified before a congressional committee in Washington in April 2012 about alleged Medicaid fraud in orthodontic billings by Texas dentists.

Ms. Castillo was an employee of the now-defunct All Smiles dental chain and West Texas Dental. Ms. Morales was a former employee of the now defunct All Smiles dental chain and Rodeo Dental.

Dr. Ellis, Ms. Castillo, Ms. Morales and several other whistleblowers all filed suits approximately
two years before the State filed its suit. The State has acknowledged that the facts underlying its
suit are the same as those underlying the whistleblowers’ previous filings.

Xerox became the state’s Medicaid administrator in 2003. Between 2004 and 2012, Texas
expended approximately $1.1 billion on orthodontics under the Texas Medicaid program.
According to the State’s lawsuit, Xerox, and ACS, Inc. before it, repeatedly represented to Texas
Medicaid officials that their prior authorization system ensured proper predeterminations of
qualifications.

Ms. Castillo, Ms. Morales and several other whistleblowers who filed cases against ACS/Xerox
are represented by Rusty Tucker of the Law Offices of James R. Tucker, P.C. of Dallas and MikeTibbals of Dallas. Ketan U. Kharod, of Guerrero & Whittle, PLLC, of Austin, Charles S. Siegel
and Caitlyn Silhan, of Waters and Kraus, of Dallas, Daniel L. Hargrove, of the Hargrove Law Firm
of San Antonio, and James R. Moriarty, of the Law Office of James R. Moriarty of Houston
represent Dr. Ellis.

Charles Siegel of Waters and Kraus said, “Because of Dr. Ellis and other whistleblowers who
brought lawsuits against ACS/ Xerox, the State of Texas ultimately showed how Xerox and ACS,
Inc. deeply compromised the integrity of the Texas Medicaid program. They faced vicious legal
attacks in their courageous efforts to set the record straight.”

Rusty Tucker of the Law Offices of James R. Tucker, P.C. said, “Our legal team hopes this
settlement sends a strong message that companies that prey upon Texas families and defraud the
state will face the judgment of the courts. Companies who commit unlawful acts in violation of
the Texas Medicaid Fraud Prevention Act will be held accountable. Dr. Ellis, Ms. Castillo, Ms.
Morales and other whistleblowers who came forward should be recognized for helping expose this
massive fraud.”

The case is “The State of Texas v. Xerox Corporation, et al.,” Cause No. D-1-GV-14-000581 in
the 53rd Judicial District of Travis County, Texas.

CONTACTS:
Rusty Tucker, Law Offices of James R. Tucker, P.C. (214) 505-0097
Charles Siegel, Waters and Kraus (214) 357-6244
James Moriarty, Law Offices of James R Moriarty (713) 857-1212

What happened to Richardmalouf.com?

In February 2013, Dr. Richard Malouf of All Smiles and home waterpark fame started his own website, richardmalouf.com. Below is his press release about all the issues he was addressing.

• New Website Released for Dr. Richard Malouf of Dallas

Successful Dallas dentist and entrepreneur sets up own news portal at http://www.richardmalouf.com.

Amazingly, it’s gone poof!

His facebook page is barebones, so is his youtube channel.

• Richard Malouf Facebook - https://www.facebook.com/DrRichardMalouf
• Richard Malouf Youtube Channel - http://www.youtube.com/user/DrRichardMalouf

But no Richardmalouf.com.

Uh-Oh! Dr. Richard Malouf abandoned his computer servers! YIKES!

Dr. Richard Malouf, founder of All Smiles Dental Centers in Texas, has made the news a lot over the last two years. Much of which has involved charges of Medicaid Fraud, indications of bribery, and his infamous home water park in an affluent neighborhood of Dallas and 2 private jets.

 

 

 

 

Last week, (January 31, 2014) Dr. Malouf was back in court, this time in front of the bankruptcy judge. Under an earlier Agreed Order (Doc 637) Malouf agreed to abandon the property to the state, with the “provision that a neutral third party” would serve as Special Master of the bankruptcy estate.

Apparently Malouf was more concerned about the proper functioning of his waterpark than what incriminating evidence might be on the computer servers he happily “abandon” to the state of Texas. He recently tried to block the State of Texas access, but in an Order issued January 31, 2014 (Doc 762) a judge “clarified” the previous Agreed Order telling Malouf, tough titty.

Ok, so the judge didn’t say exactly that but did say:

“To avoid further doubt, the Court further clarified that the property was abandoned with this Court’s approval to The State Of Texas and simply appointed the Special Master to provide fair access and control, but not as owner of the property.”

“It was the Debtor’s prerogative to decide what to do with the property. The Debtor decided and this Court approved abandonment. The Malouf entities agreed to the abandonment.”

I bet you don’t see this over on the TDMR website!

Dr. Richard Malouf’s All Smiles Dental has been purchased by another “chain” in Texas–South Texas Dental

Bill Hethcock

Staff Writer- Dallas Business Journal

Email  | Twitter  | Twitter  | Google+

South Texas Dental, which operates family dental centers in Houston, Dallas, Fort Worth and San Antonio, has acquired the 12 offices of the All Smiles general dentistry practice in North Texas.

Financial terms of the transaction were not released.

Three of the offices are in Dallas, two are in Fort Worth, two are in Arlington and single offices are in Garland, Grand Prairie, Haltom City, Irving and McKinney.

Each of the acquired offices has been re-branded as South Texas Dental, and staffing levels and hours of operations will remain unchanged. Each office will accept Medicaid, CHIP and most insurance providers.

South Texas Dental representatives could not immediately be reached for comment.

South Texas Dental now operates 38 family dental centers. The centers are owned entirely by their dentist partners, who make all decisions involving patient care.

“This transaction allows us to acquire dental centers with an established base of satisfied patients,” Dr. Chad Park of South Texas Dental said in a press release. “We spent a great deal of time evaluating each center and patient charts before proceeding with the acquisition.”

I don’t know how much real time was spent “evaluating” each of Malouf’s clinics, but I bet they didn’t doing much digging or the bones would have surfaced.

Another WFAA – Byron Harris report on All Smiles Dental Centers and Dr. Richard Malouf

July 23, 2013

by BYRON HARRIS

Bio | Email

WFAA

Posted on July 23, 2013 at 10:10 PM

Updated today at 2:46 AM

DALLAS –– An unprecedented release of documents by the Dallas County District Attorney’s office tracks the investigation of All Smiles Dental Centers (ASDC) for eight years and illustrates how local, state and federal officials responded to information and complaints about the clinics.

Dr. Richard Malouf and his wife Leann displayed the trappings of wealth as owners of ASDC,  as their clinics treated children under the Texas Medicaid dental program. D Magazine named their mansion as one of the city’s 40 largest. A private water park and pair of corporate jets were theirs to enjoy as well. 

News 8 obtained hundreds of pages of documents in the investigation of Malouf and his former company, All Smiles Dental Centers, under the Texas Public Information Act.

Read the entire story at WFAA Website Here

All Smiles Dental Center’s Motion for Bonus Payments Revealed

Transparent as it was, on May 25, 2012, All Smiles Dental petitioned the court to allow for a Management Incentive Bonuses to be paid during bankruptcy procedures. [shaking head]

First they tried to establish the separation of the Professional Corporation and the plain ole Corporation, and the Debtors. Kind of like “church and state” but better. Keep the chart below handy as you follow along.

Debtors – All Smiles Dental Center, Inc. and AS Property Holdings, LLC
Inc. – All Smiles Dental Center, Inc.
PC – All Smiles Dental Professionals, P.C.

 

“Inc, and PC believe that PC must exit the orthodontic practice in an expedited manner”. Inc will help PC do this in a manner consistent with the State Board of Dental Examiners rules. [Doc. 90, paragraph 6]

Debtors are asking that 8 “Key Employees” who are “vital” to the ongoing operations in assisting the PC’s exit the orthodontic business be given a bonus for their outstanding work, just in case they provide some. They argue, since other employees have quit or been fired, these “Great 8” have “asked” to take up the slack.

Debtors claim these 8 have been “efficient in the administration of the Debtor’s estate” and present that any reorganization of the company could not happen without them.

To reward these 8 outstanding people, Neil Minihane, (acting president) devised a “Management Incentive Bonus Plan, at Inc. to reward them for their efforts based on “specifically identifiable milestones”, up to $180,250.00, with installments up to $90,125.00. – [Doc. 90, paragraph 10]

Mr. Minihane believes PC cannot exit the fraudulent [they didn’t say they were fraudulent, of course, I did] orthodontics services without this bonus plan and paying the “Great 8” the proposed bonus is “necessary, reasonable and in the best interest of the Debtor’s estate.”

The plan is to make two payments to the “Great 8”. The first one is when Inc. converts PC over to strictly “general dentistry”. [Stainless Steel Crown manufacturers, gear up!] The payments will be at the discretion of Inc. 

Yes, I think we are understanding this correctly – Inc (debtor) wants to reward Inc (itself) with a bonus, since Inc (itself) has to follow Dental Board rules closing its “fraud” department (orthodontics).

Here is exactly what it says in Doc.90, paragraph 8 :

The Management Incentive Bonus Plan consists of two bonus payments. At the discretion of the Debtors' management, the first bonus payment will be payable upon the Debtors' successful management of PC's exit from orthodontic services. This is a key element to PC being able to shift its practice area to solely general dentistry, and hence, to the Debtors' reorganization into a company only supporting a general dentistry practice. The Debtors, with the critical assistance of the Key Employees, are currently working toward this goal. This includes labor-intensive tasks such as providing staff, record access, and logistics related to the orthodontists' preparation of letters to patients advising of termination of treatment or managing the SBDE professional dismissal process while managing the customer services issues with orthodontic patients and their families. Without the assistance of the Key Employees, PC would not be able to timely and professionally exit the orthodontic practice, resulting in significant additional costs to PC and the Debtors' estates arising from lack of organization and profitability in the orthodontic business at PC.

The second payout Inc wants to pay itself for work it already does, would take place when they Inc. exits the bankruptcy. They say, when PC stops its fraud (orthodontics) practices, the “Great 8” will still be “required in order to complete the myriad of tasks associated with the successful restructuring of PC as a general dentistry practice”. They further stated the Debtors believe they have demonstrated sound business judgment in this process and should be granted their motion for bonuses. [Doc 90, paragraph 20]

The motion stated, Inc will continue to do as it did before they filed bankruptcy – manage PC. By management of PC, Inc listed “properly restructuring the general dentistry practice, along with negotiating and managing the implementation of the Corporate Integrity Agreement contemplated in the State Settlement Agreement.”

Here is exactly what is said in Doc 90, paragraph 9:

At the discretion of the Debtors' management, the second bonus payment will be payable upon the Debtors' successful exit from bankruptcy, as evidenced by this Court's confirmation of a plan of reorganization. After the Debtors facilitate PC's exit from the orthodontic practice, the services of the Key Employees will continue to be required in order to complete the myriad of tasks associated with the successful restructuring of PC as a general dentistry practice managed by Inc. These services include, but are not limited to, removing Inc. personal property, turning over the facilities to the respective landlords, reorganizing the management operations to support the different PC needs, record relocation and organization, identifying and installing processes and procedures associated with the State Settlement Agreement Requirements,4 identifying the executory contracts and leases to be assumed or rejected by the Debtors, developing financial projections, identifying the amount of exit financing necessary, working through the myriad of patient and employee uncertainty issues associated with the bankruptcy process and answering general questions associated with the plan and with the Debtors' business.

The “Great 8” employees of Inc. are:
John Bevill – Operations Director – West (Former District Manger at Kool Smiles)
Esther Castaneda – HR Manager
John Garry – Controller – (Previous with Lending.com – online mortgage broker)
Spring Helser – Doctor Recruiter – (used to work at CVS)
Diana Loft – Facilities Director – (PlainsCapital Bank, now at Chem-Aqua, left AS 7-2012 after 5 years of employment.
Michael Lozich – Chief Compliance Officer – LinkedIn page says he’s at Broadlane, Inc. since 2009, must need updating, here is press release he issued for All Smiles July 27, 2012)
John Morgan – VP of Information Technology – (Formerly Cano Petroleum, started AS in Aug. 2010)
Lisa Mullinix – Operations Director – East – (Former Regional Manager at Small Smiles)

Specifically the Motion told the court that the “…specific amount of the…payment each…will be eligible to receive will be based upon percentage of the …salary ranging from 15% to 25%.” They motioned for the details of the “Great 8” salaries and detail of the Management Incentive Bonus Plan be placed under seal by the court.

They further stated that, “seven of the Key Employees received offer letters upon the commencement of their employment proposing bonus payments consistent with this percentage of their salary. The remaining Key Employee did not receive such an offer letter. This Key Employee will be eligible to be paid a bonus at the low end of the percentage range.”

In other words, these employee were told they would receive bonuses when we hired them, and we still want to hand out bonuses, capeesh, Mr. Judge?

It was a great attempt to extort more money from the bank accounts of All Smiles Dental. However, 11 days later, On June 5, 2012, Inc. withdrew the Motion on June 5, 2012.

Imagine the danger All Smiles currently poses. Regional directors who were given lots of power and leeway from the top two Medicaid dental mills all under the Malouf roof! Shakes me to the core.

Lisa Mullinix was a Regional Director of Operations for Small Smiles Dental Centers. She is the person who came up with the “scripts” distributed to employees to stop parent from accompanying children back into the operatory.

Much more to come on Ms. Mullininx. Stay tuned.

Related:

All Smiles Dental - Motion to Implement Bonus Program for Staff During Bankruptcy Doc 90

Lisa Mullinix's script for office employees

Dallas Mayor, Mike Rawlings, Allows Dental Clinic Under Federal Investigation Patient Shop at Back-to-School Event

I’m not sure what concerns me the most, that All Smiles is allowed to patient shop, or that the Mayor or his staff didn’t have a clue!

Posted on July 19, 2012 at 10:39 PM
Updated July 20, 2012 at 5:24 AM

Back-to-school event includes clinic involved in News 8 investigations

WFAA-TV
by BYRON HARRIS
Bio | Email

Posted on July 19, 2012 at 10:39 PM
Updated today at 5:24 AM

DALLAS - Tens of thousands of Dallas schoolkids and their parents turn out for the Mayor's Back to School Fair at the end of every summer, for a chance to get everything from immunizations, to haircuts, to school supplies -- all for free.

It's all donated by dozens of companies for the public good. But one of the sponsors this year, All Smiles Dental clinics, is charged with doing the public immense harm.

The company's been charged by the attorney general with Medicaid fraud, for allegedly billing taxpayers tens of millions of dollars for unneeded dental care under Medicaid.

All Smiles declared bankruptcy earlier this year, and settled a fraudulent billing case with the federal government for $1.2 million.

Dallas Mayor Mike Rawlings' office was unaware of the actions until notified by News 8. Rawlings' spokeswoman, Paula Blackmon, said All Smiles has participated in the fair for years.

"Those booth operators and vendors are offered a chance to come back year after year," Blackmon said. "A letter goes out and we allow those individual to participate if they wish."

Vendors pay $2,500 to participate, but the city does not make money on the fair. The city does not do background checks on the vendors, Blackmon said.

So where does the $2,500 per vender end up?

She said All Smiles will be a participant at the fair on August 4, if it chooses.

"They've not been indicted or tried or found guilty," Blackmon said. "We've allowed them to either participate or not."

The Back to School Fair is a substantial generator of new patients for health clinics. State records show that in the case of All Smiles, for years, most of its patients have been on Medicaid.
E-mail bharris@wfaa.com

Related:

• LINK: Dallas Mayor's Back to School Fair
• Dentist in Medicaid suit adding a water park to his mansion
• Texas Medicaid dental program pays millions for crowns, fillings
• Medicaid recruiters scramble for Texas dental patients

 

Several states have passed legislation requiring children to get a dental checkup before they enter school – wonder who had that idea. Anyway, it is that time of year, so parents BE AWARE!

I’m not to sure how legal these new regulations are, since it doesn’t make much sense to me to stop a child from an education because they didn’t get a dental check up.

I know folks think I’m some idiot mad woman, and they may be right. But honestly I don’t think I missed anything in school that a dental checkup would have prevented.

And if they – whoever “they” are – have done some study on this, I ask why they study this and not the number of children who have died from anesthesia mistakes and carelessness.

I’m not saying children should see the dentist or get regular checkups, just so we are clear.

In all fairness Malouf did take his business model from the DeRose family in Pueblo, Colorado… and they have their own footballs stadium and city for that matter…

Who said you can’t make any money seeing to the oral health of our nations poor.

WFAA-TV Byron Harris reports:

WFAA

Posted on July 12, 2012 at 10:30 PM

Updated today at 9:37 AM

DALLAS - The Texas Medicaid dental scandal is moving into a new phase. A construction phase.

One of the dentists charged with fraud in billing Texas taxpayers tens of millions of dollars for unneeded braces on children is in a new spurt of expanding his mansion.

He's building a water park on the property.

It's happening out of public sight, among the high-dollar homes on Dallas' glitzy Strait Lane. All the homes are big here, but the home of dentist Richard Malouf, former majority owner of All Smiles Dental Centers, is even bigger.

Plans for the expansion are on file with the Dallas Planning Commission.
"There's going be a gymnasium, a rock climbing wall," said real estate columnist Candy Evans. "There's plans for a bowling alley upstairs. There's going to be exercise rooms."

The complex, which began taking shape six years ago, began with one chateau. Malouf's Medicaid dental empire was expanding, and he sold a major share to a private equity fund.

Now he's sinking his earnings into a new mansion next door, along with a private Schlitternbahn in the back acreage, along with a second swimming pool to match the one at the original mansion.

All this is happening as two suits charge Malouf with massive fraud, brought by the Texas Attorney General and private attorneys under the False Claims Act.
Attorney Jim Moriarty is one of a consortium of attorneys in the action, led by Waters & Craus in Dallas. They say samples of Malouf's records show that 100 percent of his Medicaid claims were false.

"Frankly, it borders on being obscene," Moriarty said of the mansion expansion. "The taxpayers of the State of Texas paid to build that house, and are paying to expand that house for a guy who claims to have made his money treating the people of Texas."

"I think the only other park I know of is in Jupiter, Florida," Candy Evans said.
That one belongs to singer Celine Dion. A comparison of photos of Dion's estate with those of Malouf's, obtained by News 8, show that Malouf's water park may be bigger.

In Texas, a family's home is immune from seizure. But the lawyers in the false claims action against Malouf say his home may be fair game.

"If that home is purchased with stolen money, or that home is based on money that has been earned by falsehood or deceit, then that home is not protected at all," Moriarty said.

Malouf has several groups of attorneys, since his former company, All Smiles, is in bankruptcy in addition to his pending false claims suit. His most recent criminal attorney did not get back to us.

Related:

• Candy's dirt real estate blog
• Texas AG lawsuits spurred by WFAA dental investigation
• All Smiles Dental Center files for bankruptcy following investigation
• Texas Medicaid dental program pays millions for crowns, fillings
• Texas doctor accused of Medicare, Medicaid fraud gives up license
• Medicaid recruiters scramble for Texas dental patients
• Outrage on Capitol Hill follows News 8 Medicaid probe

Richard J. Malouf, DDS adjoining two homes! One $14-mil home isn’t big enough, I bet something else he has isn’t big enough either… Just saying…

Dr. Richard J. Malouf’s over inflated ego is reflected in his newest home addition. He’s adjoining two homes into one, and it will have a “lazy river” ride. I think it may be for practice for his “up the river” ride. But again I’m just guessing. 

Yes, this is the same Dr. Richard J. Malouf whose company stole millions of tax dollars and who has filed bankruptcy. Also the same one who the Texas Attorney General has filed lawsuits against to recover stolen funds.

Looks like Texas taxpayers may have a new “Six Flags Over Malouf” amusement park soon.

Richard J. Malouf, DDS - Adjoining two homes, to include lazy river ride. Practice for "up the river" ride?

Texas Attorney General, Greg Abbott, seeks to recover millions from Dr. Richard Malouf and All Smiles Dental Centers

In March Dr. Richard J. Malouf agreed to pay $1.2-million to settle fraud charges in Texas. That was just the beginning for Dr. Richard Malouf’s woes.

Dr. Richard J. Malouf and Valor Investment thought they could create enough shell companies to hide their flagrant fraud of the Medicaid system in Texas. They thought wrong.

Initial reviews of records seem to indicate 90% of the services for which Dr. Malouf and Valor billed Medicaid, did NOT meet standards and were unnecessary. In other words, 90% of Dr. Malouf’s income was stolen from taxpayers, not just Texas taxpayers but all taxpayers. (Medicaid is funded with both state and federal funds)

Laws in Texas, as in most states,  say that each defendant is liable for the amount of payment they obtained either directly or indirectly from unlawful acts-fraud. They are liable for:

• Two times the amount of the payment,
• Interest,
• Fees,
• Expenses,
• Cost incurred by the AG and the Whistleblower to investigation and recover the stolen funds.

In two Whistleblower suits recently unsealed the following corporations, professional corporations or limited liabilities are named:

All Smiles Dental Centers – ASDC Holdings, LLC owned by Valor Private Equity in Chicago, IL.
All Smiles Dental Center, Inc owned by ASDC Holdings, LLC
All Smiles Dental Professionals, PC – Dr. Adrian Codel
Dr. Richard J. Malouf, DDS
Lewisville Smiles, PLLC
St. Francis Smiles, PLLC
Garland Road Smiles, PLLC
Jacksboro Smiles, PLLC
Jacksoboro Smiles by Wire, PLLC
Valleyview Smiles, PLLC
Plano Minyards Smiles, PLLC
Haltom City Smiles, PLLC
Haltom City Smiles, PLLC
Haltom City Smiles, PLLC dba All Smiles Dental & Orthodontics
Northwest Highway Smiles, PLLC
Fort Worth Smiles by Wire, PLLC
Garland Road Smiles by Wire, PLLC
Garland Road Smiles, PLLC dba All Smiles Dental and Orthodontics
S. Hampton Smiles, PLLC
Park Plaza Smiles, PLLC
Park Plaza Smiles, PLLC dab All Smiles Dental and Orthodontics
Richard J. Malouf DDS P.A
Richard J. Malouf, DDS P.C.
2009 Strait Land Family, L.P.
Camelia Family Limited Partnership
RGS Dental Management Services, LLC
RMAL Holdings, LLC
Discount Dental Supply, LLC
As Property Holdings, LLC
M5 Holdings, LLC
Hypermart Lot 6, LLC
Dr. Raffy Kouyoumdjian

(the guys highlighted should go on a no fly list, they may try to skip the country)

The number of people and companies Greg Abbott has named blows the number entities the Connecticut AG filed suit against in May off the charts – Conn AG files suit against dental practice over billing – 28 named. This would make for a great reality TV series – “Battle of the Attorney General’s” or '”Operation Bring Back the Bacon”

Anyway, hats off to Texas AG Gregg Abbott for trying to bring the bacon back home. With any luck at all his office will be covered up with these suits.

 

April 2012 Ellis Whistleblower Lawsuit

---

June 25, 2012 Whistleblower suit

Castillo Whistleblower Lawsuit

Yes, Malouf is trying to escape these claims by filing bankruptcy. Let’s see how far that gets him in this case. Just remember, Salmon swim up stream.

The state of Texas is not done with Dr. Richard Malouf–Orthodontics Fraud King of Texas - and his All Smiles Dental Centers

 

 

FOR IMMEDIATE RELEASE
Contact: Brandy Dietz
bdietz@waterskraus.com
800.226.9880

Waters & Kraus Client Takes on Dental Medicaid Fraud in Texas

Texas AG Joins Whistleblower Lawsuit Against Dallas Dentist and Dental Clinics
DALLAS — July 9, 2012 — Dallas-based law firm Waters & Kraus, LLP announces that Dr. Christine Ellis has sued Dr. Richard Malouf and several All Smiles clinics, alleging violations of the Texas Medicaid Fraud Prevention Act.
Dr. Ellis is represented by Waters & Kraus and Jim Moriarty of Moriarty Leyendecker in Houston. Her lawsuit was recently joined by Texas Attorney General Greg Abbott.

"We at Waters & Kraus are proud to represent Dr. Ellis and to be a part of the fight against dental Medicaid fraud," said Waters & Kraus attorney Dan Hargrove. "Whistleblowers like Dr. Ellis represent our best chance to fight serious fraud that drains the public funds and puts important services at risk."

After serving as an auditor for the Office of Inspector General of the Texas Medicaid Program, Dr. Ellis became concerned about dental fraud she had uncovered. When she spoke before the U.S. House Oversight and Government Reform Subcommittee in April, Dr. Ellis testified to a “flagrancy of fraud that is truly unbelievable." Shortly thereafter, Dr. Ellis filed her whistleblower lawsuit.

The lawsuit alleges that the defendants misrepresented to Medicaid the dental and orthodontic treatment they provided, causing Medicaid to overpay them by many millions of dollars. They allegedly submitted claims for services that were not actually provided or were poorly performed, billed for services that were not medically necessary or were more expensive than those actually provided, and unlawfully recruited patients or paid kickbacks to those who did.

Jim Moriarty, of Moriarty Leyendecker, said, “The courage of Dr. Ellis has shown in reporting these allegations deserves the attention and respect of anyone who cares about public health and the responsible stewardship of taxpayers’ funds. We’re honored to work with Waters & Kraus and Dr. Ellis on this important case.”
If the lawsuit is successful, Dr. Ellis will be entitled to 15 to 25 percent of the recovery, in addition to her costs and attorneys' fees. Whistleblower awards encourage people who know about fraud to come forward. The government relies on citizens like Dr. Ellis to identify and fight fraud.

About Waters & Kraus
Waters & Kraus is a national firm with highly skilled lawyers practicing qui tam whistleblower litigation as well as complex civil litigation in four offices, including Dallas, Los Angeles, San Francisco, and Baltimore. Our attorneys have decades of experience successfully representing whistleblowers in a variety of fraud cases. Contact us or call our attorneys at 800.226.9880 to learn more about our practice and how we can assist.

About Moriarty Leyendecker
Houston-based Moriarty Leyendecker has represented thousands of consumers in cases involving allegations of healthcare fraud, consumer defects, and securities fraud during the past 20 years.

Brandy C. Dietz | Public Relations Coordinator
3219 McKinney Avenue | Dallas, TX 75204
Toll Free 800-226-9880 | Phone 214-357-6244 | Fax 214-357-7252
www.waterskraus.com

Texas Attorney General Lawsuit–Dr. Richard Malouf–All Smiles Dental Centers

Texas AG lawsuits spurred by WFAA dental investigation

 

Posted on June 26, 2012 at 12:38 PM

Updated today at 9:40 AM

Related:

• Dental Investigations

DALLAS - A year-long WFAA investigation into questionable Medicaid dental payments has resulted in the Texas Attorney General filing lawsuits this week.

Greg Abbott charges that a Dallas dentist and his corporate entities bilked taxpayers out of millions for fraudulent orthodontic work on poor families.

Dallas dentist Richard Malouf amassed a multi-million dollar mansion, corporate jets and luxury vehicles through his dentistry, News 8 has found.

He and his former firm, All Smiles, declared bankruptcy following a series of reports detailing how he and other dentists around Texas gamed the welfare system by billing for unnecessary dental work.
WFAA found that over the past few years, Texas has paid out more in Medicaid orthodontic claims than all other 49 states combined.
All Smiles billed Medicaid for at least $15 million over two years, which is twice as much as the entire state of Illinois. The Attorney General’s lawsuits, filed in Austin Monday, seek to recoup “two times the amount of the overpayments.”

WFAA’s findings have spurred outrage among lawmakers and hearings in Austin and Washington D.C.

Madelayne Castillo, a former All Smiles employee, and Dallas orthodontist Dr. Christine Ellis filed separate whistleblower lawsuits in April and May alleging fraud by Malouf and his corporations.
Both lawsuits remained sealed while the Attorney General’s office investigated the claims. On Monday, Abbott’s office joined those lawsuits by refiling them in the state's name.

In April, Dr. Ellis testified before the U.S. House Oversight and Government Reform subcommittee that Malouf and other dentists were responsible for “flagrancy of fraud that is truly unbelievable."
In May, WFAA reported that All Smiles bankruptcy documents showed that Malouf owns 28 percent of the company, and Valor Equity of Chicago had the remaining 72 percent.
A subsidiary of Valor is a named defendant in one of the Attorney General’s suits.

Abbott alleges Malouf and others violated of the Texas Medicaid Fraud Prevention Act.

“The defendants knowingly or intentionally submitted false information, and misrepresented material facts, when seeking prior approval for orthodontic services,” the lawsuit states.
“Defendants submitted claims for services which they did not provide, and misrepresented or concealed the true nature of the services which they provided,” it states.

“Defendants also knowingly paid or received consideration as a condition of the provision of dental/orthodontic services by unlawful recruiting and paying kickbacks for the recruiting of Medicaid clients,” it continues.

The suits allege that Malouf and the other defendants billed for work that was not medically necessary, and in some cases, performed it with unqualified dental workers. They also “upcoded,” or billed for orthodontics which were more expensive than what was actually provided, the suit states.

by BYRON HARRIS and JASON TRAHAN

Bio | Email

WFAA

All Smiles Dental Bankruptcy Update 6-4-2012

Wondering what’s happening at All Smiles Dental?  Here is their Schedules A thru H. A inside look at the company that Medicaid built.

Doc 71 All Smiles Dental Schedule A-G

Disgraced Texas “All Smiles Dental Centers” & Dr. Adrian Martin Codel

Has anyone wondered who Valor Investment’s front man dentist happens to be, since Malouf no longer owned more than 50% of the centers, Valor needed a pretend owner to be on the various PLLC documents.

The “pretend” owner is Dr. Adrian Martin Codel, of Chicago, Illinois, Valor’s headquarters.

Adrian Martin Codel
All Smiles Dental – Texas
AC Dental – Chicago

---

Dr. Adrian Codel

After graduating from Northwestern University Dental School's last graduating class in 2001, I went on to complete a General Practice Residency at the Illinois Masonic Medical Center.

This hospital based dental experience included training in IV sedation and Special Needs patient care in a clinical and O.R. setting. The public health component involved providing dental care on a mobile dental unit.

I enjoyed this aspect of dentistry so much, I stayed on as an attending dentist primarily on the mobile unit. Specifically, providing free urgent care to the homeless Chicago population Friday nights. In addition, I was an associate dentist for a pediatric dentist my first 3 years after receiving my GPR certificate.

In 2005, I purchased an existing dental practice and have been a solo practitioner in this urban community based practice since then.

In October 2010, I was approached by a colleague interested in making an equity investment in the largest provider of dentistry in the state of Texas. I agreed to consult him in this purchase and am currently the president/owner of All Smiles Dental Centers which oversees 38 clinics and 5 mobile units providing dental care to the undeserved population in Dallas and surrounding areas.
http://www.sharecare.com/user/dr-adrian-codel/bio

---

Now, unless Dr. Adrian Martin Codel is a complete imbecile, he knew he was breaking all kinds of Dental Practice Acts by doing this. I’ll give him kudos though; he at least admits he was approached to help with an “Equity Investment”.

I think he might have been approached before October 2010, his Texas dental license was issued in September 2010.

Now he’s linked up with the most outrageous, flamboyant criminal dental enterprise since Michael A., Eddie and Dan DeRose and their FORBA a/k/a Small Smiles. 

Hmm…All Smiles, Small Smiles, …. I’m thinking a nice jingle is in order!

Dr. Adrian M. Codel
Illinois Lic info:
Number-019025709
Status-Active
Date Issued-10/29/2001

Texas Lic info:
Number – 0025986
All Smiles Dental Ctr –Abrams
6780 Abrams Rd. #207
Dallas, Texas 75231
312-217-9630Status - Active
Date Issued –09-14-2010
Disciplinary Actions- No
Permits – Nitrous-issued 10-12-2010

Richard J. Malouf–A call for every item this man has had his name attached to or inscribed on to be seized! Not tomorrow, but by 5 this afternoon. And don’t forget his passport!

 

E-mail bharris@wfaa.com

Related:

• Congress examines Texas Medicaid orthodontics
• Texas, feds take action on orthodontic fraud
• Recruiters solicit young patients for North Texas dentists
• Babies for braces? News 8's Medicaid investigations continue
• McCaa Uncut: Babies for braces
• Crooked Teeth: Medicaid Millions
• More stories about WFAA's Texas Medicaid orthodontics investigation

---

This should make every man, woman and child world wide, mad as hell. There should be crowds of people in front of the “gansta's house along side the news trucks.

Richard J. Malouf, just gave the, Department of Justice, the US Attorney’s Office, the citizens of Texas as well as every prosecutor in Texas the finger. But not the one he is using in the picture to the left.

On March 21, 2012 the US Attorney’s office in Texas allowed Richard Malouf to say he would pay them $1.2 million dollars to walk away from fraud charges he committed between 2004 and 2007.

 

Dr. Richard Malouf and Dr. Adrian Codel partner in many of the All Smiles–Valor Investment Entities

All Smiles Dental Centers various Names, members, executives and agents.

All Smiles Dental Centers, Inc All Smiles Dental Centers All Smiles Dental and Orthodontics All Smiles Dental, PA All Smiles Dental Professionals* Arlington Smiles by Wire, PLLC AS Property Holdings, LLC* Dallas Smiles, PLLC** Discount Dental Services Fort Worth Smiles by Wire, PLLC* Fulton Road Smiles, PLLC** Garland Road Smiles, PLLC8*,** Garland Road Smiles by Wire, PLLC** *Officer, Member, Director or Agent: Richard Malouf,DDS 9090 Skillman St. Ste, 200C Dallas, TX 75243

Haltom City Smiles, PLLC*,** Jacksboro Smiles, PLLC*,** Jacksboro Smiles by Wire, PLLC*,**, *** Lewisville Smiles, PLLC*,** Northwest Highway Smiles, PLLC*,** NW Hwy Smiles by Wire, PLLC Oak Cliff Smiles, PLLC Park Plaza Smiles, PLLC*,** Plano Minyards Smiles, PLLC*,** S. Hampton Smiles, PLLC*,** St. Francis Smiles, PLLC*,** Valley View Smiles, PLLC **Agent: Adrian Codel,DDS 4901 LBJ Fwy, Ste 400 Dallas, TX 75244 *** Not listed on Bankruptcy Filings

Petition for Financing – who owns what and how much and how it happened.
Terms and Conditions of Financing
The Budget

As a side note here:

I bet Church Street is happy All Smiles filed and got my focus off of their big month of May. Sorry to disappoint. I’m still focused, as I have been for 4 plus years. CSHM simply should not have tied down and abused children to steal tax dollars.

All Smiles Dental Centers & AS Property Holdings, LLC Top 20 List

Top 20 Unsecured Creditors for All Smiles Dental and AS Property Holdings, LLC
Company	Creditor
Caymus Partners, LLC	$3,425,354.81
Valor Management Corp	$265,252.02
United Constructors of Texas, Inc	$218,028.17
Greenberg Traurig	$212,718.31
Henry Schein	$182,979.50
Southlake General Contractors	$140,077.39
McKenna Long & Aldridge	$139,281,32
Fish & Richardson, PC	$139,129.21
CB Richard Ellis	$125,471.44
Susman Godfrey, LLP	$116,346.45
Abrams & Baylis, LLP	$96,745.38
Waller, Lansden, Dortch & Davis	$92,279.38
Alorica, Inc	$72,571.75
SYBRon/SDS ORMCO-ORTHO	$71,468.31
Logix Communication	$45,150.69
Univision 23	$25,445.00
Richard Malouf	$20,245.66
Duff & Phelps, LLC	$19,250.00
Process in Focus	$16,665.50
Missing is:
US Department of Justice and the state of Texas?? Do they not owe $1.2 Million or is that on Malouf himself since it was for the early years?

Valor Private Equity-Richard Malouf All Smiles Dental Centers Top 20 Unsecured Creditors List

Amended 20 Largest Unsecured Creditors- Doc 8

Valor Investments –They lost their ass fast.

Other Filings Here

All Smiles Bankruptcy Initial Creditors List

They simply can’t stay afloat if they are under the watchful eye of a Corporate Integrity Agreement. Which translates into, they can have no integrity and must rely on fraud.

Looks like Richard Malouf,DDS is trying to claim he’s a creditor. That’s because he didn’t take the lump sum option when he sold out to private equity. ROTFLMAO!

Some of these suppliers are gonna be next.... i.e. Henry Schein. They seem to make every list. When you lay with dogs, you're gonna get fleas!

All I’m saying, is if I were a company like Henry Schein, I would be demanding accounts to be paid in full by close of business tomorrow! Extend NO more credit. This is the real dental crisis!  Currently I wouldn’t touch this stock with a ten foot pole! 

Oh, and one last piece of advice, I’ve said on here before but I will say it again.
DO NOT TAKE THE PAYMENT METHOD WHEN YOU SELL TO CRIMINALS. Contrary to popular belief, there is NO honor among thieves. A con artist made that up!

• 2001 East Beltline LLP
• 2009 Strait Lane Family LP
• 2009 Strait Lane Family LP
• 2009 Strait Lane Family LP
• 2009 Strait Lane Family LP
• 8880 Bellaire, L.P.
• 8930 RL Thornton LLC
• Abrams & Baylis LLP
• Acrocom
• ADT Security

• ADT Security Services, Inc.
• Air Gas
• All Smiles Dental Center, Inc.
• Alorica, Inc.
• Aqua Chill of Dallas
• Aqua Chill of Gulf Coast
• ASDC Holdings
• ASDC Holdings, LLC
• Atmos Energy -NWH
• Atmos Energy Corporation
• Best Buy Business Advantage Account
• Bhagat Holdings, LTD
• Biomedical
• BKD LLP

Medicaid Fraud Penalties Are Unbalanced (that was the nicest word I could use)

Here is the perfect example of how the 1% stay there, and the %99 stay put as well.  Being the 1% has a whole lot of perks!

Quanah, Texas Dentist Sentenced
KAUZ-TV: NewsChannel 6 Now | Wichita Falls, TX

Posted: Mar 28, 2012 8:58 PM CDT

A Quanah dentist pleaded guilty Wednesday, March 28, to Medicaid Fraud. Dr.

Jay Parmer was sentenced to 10 years probation. He was ordered to pay a fine of $5,000 to Hardeman County, and ordered to make restitution in an amount of $158,000 to the State of Texas Medicaid program.

Law enforcement launched an investigation into Dr. Parmer billing practices in 2009. At the time, Parmer filed a complaint against his former office manager for theft.

During that investigation, she told police Parmer fraudulently billed for work he had not actually completed. On July 20, 2010, Parmer's former office manager pleaded guilty to the thefts.

The Texas Department of Public Safety executed a search warrant in August 2009 on Parmer's office in Quanah. DPS seized patient records and computers used for billing purposes.

Parmer operated offices in Quanah and Vernon, Texas.

Just two days prior, Dr. Richard Malouf who has “allegedly” stole hundreds of millions paid the government $1.2 million dollars to leave him alone.

Dentist settles fraud case, pays $1.2 million, takes CIA

In case you're wondering why OIG just entered a Corporate Integrity Agreement with the All Smiles Dental Center in Texas, here's a recap of the Medicaid fraud case:

All Smiles was a success story, and its founder Richard Malouf was rich; his $10 million French-style chateau put him on D magazine's "100 Most Expensive Homes in Dallas" list. Life was good -- you can watch a video of Malouf backup-dancing for a Michael Jackson impersonator at the All Smiles Christmas party here.

But the feds claimed Malouf got rich in part through Medicaid fraud. The Texas Medicaid Fraud Control Unit (MFCU) and the FBI pursued charges that Malouf "caused 'unbundled' and other improper claims to be submitted to the Texas Medicaid program for orthodontic-related items and services between 2004 and 2007."

Back in 2010, Malouf repaid $46,000 in claims to Texas Medicaid and agreed to an 18-month Medicaid claims moratorium.

Last week, Malouf settled the legal case. He admits no wrongdoing but will pay a whopping $1.2 million settlement fee to Texas and the U.S.

The CIA requires All Smiles to put in a Compliance Officer and do training, special claims reviews, etc.

But Malouf won't have to worry about any of that: He sold the company last year. And we suspect he's still pretty rich.