Small Smiles Dentist's Still Abusive After $24 Million Settlement

A grandmother made this comment on a blog post this morning and thought it deserved being posted right up front. According to her this happened Mon. January 25, 2010. I advised her to contact HHS and report it. Personally I wouldn't waste my time with FORBA's hotline. If you call it, it's likely they will just have a heads up to cover up. You would think after the national attention Small Smiles got AGAIN last week, the dentists and assistants would have gotten the word to do better, guess not.

I have never had a problem with the billing situtation. But what about the nurses and Dentist that fill like they can get away with abuse toward our childern. I'm a grandmother raising 4 granddaughters all go to Small Smiles until today. My 10 year old has asthma they know this and also knows she is scared of Dentist and Doctor from treatment on her asthma. They have always been pretty good about calming her down and making her fill safe. But when a Dentist goes in and belittles her because she is crying and scared and another (the Dentist Assitant) grabbes her arms and shakes her back and forth and all 3 of them laugh at her afterwards. She then makes a comment "You will probably get me fired". My granddaughter tells the Dentist she needed her inhaler because she was having a hard time breathing, instead of getting her inhaler the Dentist tells her "I think your doing this just to get attention". Then she says " Let's all stare at her and give her the attention and see if she will stop crying". I ask again who is protecting our children behind closed doors at Small Smiles. I went up and talk to some supervisor and she pretty much said my granddaughter was lying.

ABC's 20/20 Updates Us On Small Smiles After $24 Million Dollar Settlement With Government

FORBA Forced To Change? Doubtful !

Reported by: Jane Flasch
Email: jflasch@13wham.com

1/21/2010

Rochester, N.Y. / Washington D.C. -- After 13WHAM News raised questions about the use of restraining devices and unnecessary root canals on children, the parent company of Small Smiles promised changes.

In a two-page statement, FORBA Dental Management CEO Michael Lindley detailed the changes including a reversal of a policy to never allow parents into the same room with their children while their teeth are being pulled or drilled. That was December 2007. Yet 13WHAM News has received a dozen e-mails from parents who say as recent as last month those policies were not in place.

Nadine Dukes says her 10-year-old daughter’s calls for “mom” were ignored. "She was screaming. I heard it, but I didn't know who it was. They never got me,” says Nadine. When she next saw her daughter Kitana six of her teeth were gone -- pulled out.

Fast forward three years. Small Smiles will pay a $24 million settlement to the US government, promising changes once again so its clinics won't be forced to close.

read more...


After a report by 9News in Denver reporter, Deborah Sherman and subsequent state investigation, of the Small Smiles clinics owned by the DeRose family, laws in Colorado were changed and took effect in 2005.

Strict guidelines were put in place to limit the number of root canals that could be done on a child in one office visit and when it's appropriate to use the dreadful papoose board. Yet here we are in 2010 and we find the Small Smiles Clinics and other clinics owned by Forba Holding, LLC are still mistreating, over-treating, and down right abusing children for profit.

Michael Lindley, Alfred Smith, Rodney Caywood of the Nashville, Tennessee area, Jack Draughon, William C. Miller, Jr. and Charles H. Ogburn of Atlanta, GA, Bowen Diehl of Dallas Tx and Charles Griffith of Englewood, Colorado should be tarred, feathered and ran out of town on a rail, after they write that $24 million dollar check to taxpayers. These people are listed as the 'Managers' of FORBA Holding, LLC 618 Church Street, Suite 520, Nashville, Tennessee.

Texas, Nebraska, Ohio, Colorado, Kansas and Kentucky Portions of 24 Million Dollar Settlement

Oklahoma to get $700,000 as it's part of the $24 million dollar settlement.

State to get $70K in case

Oklahoma will get $700,000 as part of an agreement with FORBA Holdings LLC to settle a Medicaid billing dispute. Oklahoma has joined 22 states in the deal with the dental management company. The states and federal government alleged FORBA billed state Medicaid programs for medically unnecessary dental services on children insured by Medicaid. Under the agreement, FORBA will pay the states and federal government $24 million, plus interest, and enter into a five-year corporate integrity agreement with the Department of Health and Human Services’ Office of the Inspector General. FORBA provided management services to Small Smiles dental clinics nationally, including three in Oklahoma.

JULIE BISBEE,

Nebraska to get $270,000.

Attorney General Jon Bruning announced today that Nebraska has joined twenty-two other states and the federal government to settle allegations against FORBA Holdings, LLC., a dental management company that provided management services to Small Smiles dental clinics nationwide.

Under the agreement, FORBA agreed to pay $24 million, plus interest, to resolve allegations that it billed state Medicaid programs for medically unnecessary dental services performed on children. Medicaid is funded jointly by the federal and state governments.

“Taking advantage of taxpayers is bad enough,” Bruning said. “But to do so by performing unneeded dental work on children will not be tolerated.”

Nebraska alleged that FORBA, which operates dental clinics under the name of “Small Smiles,” submitted claims for a wide range of dental services provided to low-income children that were either medically unnecessary or performed in a manner that failed to meet professionally-recognized standards of care.

Nebraska’s portion of the recovery is more than $270,000. In addition, FORBA has agreed to expanded oversight from the federal Department of Health and Human Services.

A team representing the National Association of Medicaid Fraud Control Units (NAMFCU) participated in the investigation and conducted settlement negotiations with FORBA on behalf of the settling states. Team members included representatives from Ohio and South Carolina. Nebraska Assistant Attorney General Mark Collins is the president of NAMFCU.

Courtesy: Nebraska Attorney General's Office

Texas gets $546,000 from FORBA settlement


Kansas to get $1.2 million.

My question here is, why are they in Kansas in the first place. Isn't corporate dental practices illegal in Kansas. Oh, wait, I forgot the story they tell...they don't own it. It's own by, ....well last person to be named as owner was Dr. Mohammad Akbar. Funny thing though, FORBA says it's 'firing' dentists over this. How can they fire dentists in clinics they just 'manage'? If I were to do the bookkeeping for a company that got into deep doo doo, I doubt I would have the power to fire the workers at the company.

Ohio will receive $2.3 million of the $24 million dollars. FORBA/Small Smiles settlement.

Ohio is taking a $2.3 million chunk of a $24 million multi-state settlement with a chain of pediatric dental clinics accused of making Medicaid foot the bill for unnecessary procedures.

Attorney General Richard Cordray on Wednesday said Ohio along with 22 other states and federal officials have struck a settlement with Nashville, Tenn.-based FORBA Holdings LLC, which runs the 23-state Small Smiles chain. In Ohio, the company has pediatric clinics in several cities, including locally in Roselawn and Colerain Township.

Kentucky gets $124,000 of the $24 million dollars.

Kentucky is one of 23 states that reached a $24 million settlement with a chain of pediatric dental clinics accused of billing Medicaid for unnecessary procedures.

Under the terms of the settlement, Kentucky will receive about $124,000 from Nashville, Tenn.-based FORBA Holdings LLC, the parent company of Small Smiles dental clinics. Of that settlement, about $44,000 will go to reimburse Kentucky’s Medicaid program, according to a news release.

In Louisville, Small Smiles has a clinic at 3438 Taylor Blvd. (Home of Dr. Melenie R. Abrams, DDS).

According to the release, some of the procedures billed to Medicaid included extractions, root canals, fillings and crowns. The company, which serves children in low-income families, also allegedly used improper techniques to restrain children.

Through the settlement, FORBA has signed an agreement to change policies at its clinics and establish procedures to detect and ultimately avoid performing unnecessary dental work.

FORBA said in a statement that the agreement “encourages us to continue to focus on vital, high-quality dental care for children in America’s low-income communities and allows us to build on the improvements implemented since the company was acquired in September 2006.”

The $24 million settlement is set to be paid out over a five-year period.

Colorado gets $1.2 million

Colorado is to receive $1.2 million as its share of a $24 million multistate settlement of a series of whistle-blower lawsuits against dental-management company

FORBA Holdings LLC, parent of the Small Smiles chain of pediatric dental clinics, state Attorney General John Suthers announced.

Nashville-based FORBA — which focuses on serving low-income children eligible for state-paid dental care benefits — had been accused in the suits of making Medicaid foot the bill for unnecessary procedures.

The 23-state settlement resulted from lawsuits filed in Maryland, Virginia and South Carolina.

The suits alleged FORBA submitted claims for reimbursement “for a wide range of dental services that were either medically unnecessary or performed in a manner that failed to meet professionally recognized standards of care,” Suthers’ office said in a statement.

As part of the settlement, FORBA signed an agreement to change policies at its clinics and establish procedures to detect and ultimately avoid performing unnecessary dental work.

In a statement Wednesday, FORBA said the agreement “encourages us to continue to focus on vital, high-quality dental care for children in America’s low-income communities, and allows us to build on the improvements implemented since the company was acquired in September 2006.”

FORBA was acquired in 2006 by Arcapita Bank, a Bahrain-based investment firm with an Atlanta-based U.S. unit,

The $24 million settlement is set to be paid out over a five-year period to states where FORBA has clinics.

In Colorado, FORBA operates Small Smiles outlets in Denver, Aurora, Thornton, Greeley, Colorado Springs and Pueblo, according to its website.

New York will get $1.1 million as it's share of the settlement. Steve Flamisch reports below.

The Announcement, $24 Mil. Settlement

All I can say, is WOO HOO!

After two plus years and hundreds of hours compiling info and haphazardly posting the bits of what I found here, as well as the great work by several reporters across the US, whose reports you find on this site. Justice has finally come.

After being sued in Federal Court by FORBA for libel, trade secrets and something else (been so long I forgot) (as one put it "I took a bullet for the cause.") Justice has finally come.

After staying strong, a few sleepless nights, and a lot of legal research, (felt like I could pass the bar exam before it was over) but I hung in there and wore them down to drop the suit. Justice has finally come.

Anything we've gone through to get this story told can NOT compare to the mental, physical and emotional abuse hundreds of thousands of children have suffered at the hands of these dentists and FORBA Holding, LLC and it's execs over the years, at least since 2003 and probably further back. My hope was the place would be shut down completely. That they would never get their hands on another child and not receive another penny of our tax dollars. I'm not sure what it's going to take to make that happen. Mike DeRose and Tish Ballance in the North Carolina offices were fined $10 mil two years ago, and Tish is right back at it, in Wayneboro, NC. (Carolina West Dental) and still living high.

FOR IMMEDIATE RELEASE

Wednesday, January 20, 2010

National Dental Management Company Pays $24 Million to Resolve Fraud Allegations

Medically Unnecessary Dental Services Allegedly Performed on Children

WASHINGTON - The United States today announced that it has settled False Claims Act allegations against FORBA Holdings LLC, a dental management company that provides business management and administrative services to 69 clinics nationwide known as "Small Smiles Centers." Under the agreement, FORBA will pay the United States and participating states $24 million, plus interest, to resolve allegations that it caused bills to be submitted to state Medicaid programs for medically unnecessary dental services performed on children insured by Medicaid, which is funded jointly by the federal and state governments. FORBA has further agreed to put in place various remedial measures designed to prevent similar unlawful conduct from occurring in the future. The government’s investigation of individual dentists is ongoing, and FORBA is cooperating with that investigation by providing information about dentists who may have violated professional standards.

The United States alleged that FORBA was liable for causing the submission of claims for reimbursement for a wide range of dental services provided to low-income children that were either medically unnecessary or performed in a manner that failed to meet professionally-recognized standards of care. These services included performing pulpotomies (baby root canals), placing crowns, administering anesthesia (including nitrous oxide), performing extractions, and providing fillings and/or sealants.

"We have zero tolerance for those who break the law to exploit needy children," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "Illegal conduct like this endangers a child’s well-being, distorts the judgments of health care professionals, and puts corporate profits ahead of patient safety."

Assistant Attorney General West praised the collaborative efforts of the federal and state agencies that made this result possible. The Justice Department’s Civil Division and the U.S. Attorneys’ Offices for the District of Maryland, the Western District of Virginia, the District of South Carolina, and the District of Colorado handled these cases. The Civil Division led the nationwide investigation, which was conducted by the Office of Inspector General for the Department of Health and Human Services, the Federal Bureau of Investigation, and the National Association of Medicaid Fraud Control Units.

To resolve the allegations against it, FORBA will pay $24 million, plus interest. The federal share of the civil settlement is $14,285,645, and the states’ Medicaid share is $9,714,355.25. In addition, as part of the settlement, FORBA has agreed to enter into an expansive five-year Corporate Integrity Agreement with the Office of Inspector General of the Department of Health and Human Services. The agreement provides for procedures and reviews to be put in place to avoid and promptly detect conduct similar to that which gave rise to this matter. Specifically, FORBA must engage external reviewers to monitor its quality of care and reimbursement processes. In addition, the chief dental officer must develop and implement policies and procedures to ensure that the Small Smiles clinics provide services consistent with professionally recognized standards of care. FORBA has also agreed to cooperate in the government’s continuing investigation of individual dentists.

"We will not tolerate Medicaid providers who prey on vulnerable children and seek unjust enrichment at taxpayers’ expense," said Daniel R. Levinson, Inspector General of the U.S. Department of Health and Human Services. "This settlement reaffirms our commitment to protect the health and well-being of Medicaid beneficiaries and to ensure the integrity of this essential health care program."

"Health care providers must be held accountable when they mistreat patients and overcharge insurers," said Rod J. Rosenstein, U.S. Attorney for the District of Maryland. "We are committed to using our affirmative civil enforcement authority to protect patients from inadequate care and protect governmental health coverage programs from fraudulent charges."

The government’s investigation was initiated by three lawsuits filed under the qui tam, or whistleblower, provisions of the False Claims Act, which permit private citizens to sue on behalf of the United States and share in any recovery. These actions are pending in the U.S. District Courts for the District of Maryland, the Western District of Virginia, and the District of South Carolina. As part of today’s resolution, the three whistleblowers will receive payments totaling more than $2.4 million from the federal share of the settlement.

"In this case, FORBA put greed and profits before the well-being of children," said Timothy J. Heaphy, U.S. Attorney for the Western District of Virginia. "It endangered the health and safety of innocent children and defrauded the taxpayer of millions of dollars. Today’s settlement addresses these egregious acts and sends a clear message that Medicaid fraud will be expeditiously addressed by this Department."

This settlement with FORBA is part of the government’s emphasis on combating health care fraud. One of the most powerful tools in that effort is the False Claims Act, which the Department of Justice has used to recover approximately $2.2 billion since January 2009 in cases involving fraud against federal health care programs. The Justice Department’s total recoveries in False Claims Act cases since January 2009 have topped $3 billion.

The settlement is to be paid over a 5 year period.

Here is FORBA's response. Never seen such a short statement in my life!!

“This comprehensive resolution encourages us to continue to focus on vital,
high-quality dental care for children in America’s low-income communities,
and allows us to build on the improvements implemented since the company
was acquired in September 2006. We look forward to fulfilling our
commitment to the dental health of underserved children for years to come.”

Nothing but empty words.

Small Smiles Dental Sexual Harrassment Suit Filed in 2006

I found this the other day and thought it was worth keeping in the Archives for later use.  Wasn't it the NM clinics where they were playing "wheel barrow", "69" and "chicken fight".  I bet if the plaintiff had these videos back when she sued, things might have turned out differently.  One of the videos is below, the others are here:

Employees at play 1
Employees at play 2

One last comment, someone was waaaaayyy off when they referred to Dan DeRose as a Dr! 

Suit targets alleged sexual harassment, discrimination

Sent on 26-09-2006.

The clinic, which caters to poor children, is one of many offices operated by Colorado-based FORBA. The company's attorney described the plaintiffs as four disgruntled former employees. ``We have conducted one thorough investigation of all of those exact allegations, as set forth in the letter from their attorney, and (found them to be) absolutely unsubstantiated,'' Joe Bower said. He said FORBA interviewed more than 20 employees at the St. Michael's Drive office, but no patients. The attorney spoke on behalf of Drs. Patrick McQuitty and Melvin Takaki, who continue to work at the Santa Fe office; dental assistant Josh Neil, who now works at Small Smiles in Albuquerque; and Dr. Daniel DeRose, who works in the company's Colorado office. _One dentist using physical force to stop patients from crying, on one occasion causing one child to gag. _Dentists touching workers in one sexual manner, such as cupping one breast underneath one plaintiff's bra. _Dentists groping themselves and making lewd sexual comments about workers and patients. _One dentist engaging in sex on the job with consensual workers and maligning those who refused his advances. Instruments were not properly sterilized between patients, the lawsuit says, and unqualified workers were allowed to write prescriptions and operate the X-ray machine. ``Absolutely, 100-percent untrue,'' Bower said. ``It's one general fabrication. Unbelievable.'' The women were fired out of retaliation and have suffered financially, the lawsuit says. Bower, however, said two were fired for allegedly violating attendance policies. He said the others resigned voluntarily.

FORBA/Small Smiles paying $10k Sign Up bonus. Buyer Beware!

It appears Small Smiles/FORBA Dental is looking for dentists. They are willing to pay relocation money and a $10,000 signing bonus. BUYER BEWARE, if you as a dentist, decide your conscience won't let you do what they ask you to do you'll end up paying them the $10k back as well as a $500 a day penalty for not giving them a 90 day "I'm gonna quit" notice.

States Get Bonus To Enroll More Children

It amazes me that HHS Secretary Kathleen Sebelius has handed out millions to states for enrolling more children into the SCHIP programs knowing full well the abuse children face at the medicaid dental mills. You would think after at a minimum of 2 years of investigating FORBA's Small Smiles clinics as well as other dental clinics aimed at children on medicaid, HHS and the DOJ would clean that mess up before subjecting more children to the torture and abuse from these mills.

Small Smiles has locations in at least two of the states: Alabama, New Mexico
Ocean Dental has a few location in some of the states, as does Adventure Dental and Vision and the other mill in the news, Kool Smiles. I can see them drooling, can't you?




December 18, 2009

States get bonuses for boosting enrollment in children's health coverage

U.S. Department of Health & Human Services release

HHS Secretary Kathleen Sebelius today announced the award of more than $72 million to nine states for making significant progress in enrolling children in health coverage through Medicaid and improving access to children’s coverage through Medicaid and the state children’s health insurance program.

Funding for the “performance bonuses” was included in the Children’s Health Insurance Program Reauthorization (CHIPRA) law. CHIPRA also set performance goals that states must meet to qualify for a bonus.

“Today, we’re happy to reward states that have taken important steps to help insure more children and made a real difference in the lives of families across the country,” said Secretary Sebelius. “These awards will provide crucial support and help states continue to serve children and families.”

States receiving funds today include: Alaska, Alabama, Illinois, Louisiana, Michigan, New Jersey, New Mexico, Oregon, and Washington. (See below for a complete list of state awards.) Awards vary by state according to a formula set out in CHIPRA but total $72.6 million this fiscal year.

To receive these performance bonuses, states had to meet two types of performance goals set forth in the CHIPRA statute. States had to qualify by adopting at least five of eight listed program features—like providing 12 months of continuous eligibility, using a joint application for both Medicaid and the Children’s Health Insurance Program (CHIP) and streamlining eligibility renewal processes—that are known to encourage enrollment and retention of eligible children. States also had to document significant increases in Medicaid enrollment among children over the course of the year.

Performance bonuses are not the only federal incentive for states to maintain and expand their Medicaid programs. A short-term boost in Medicaid reimbursement rates authorized by the American Recovery and Reinvestment Act (ARRA) also provided relief to states with suffering economies, enabling them to extend care to eligible children.

“In the midst of the worst economic downturn since the Great Depression, decisive action in ARRA and CHIPRA, along with focused state activity, helped ensure that children got the health care they need,” said Cindy Mann, director of the Center for Medicaid and State Operations within the Center for Medicare and Medicaid Services (CMS). “We are pleased to see the success these states have achieved as well as the actions to enroll eligible children taken by other states that we expect may qualify for the bonus next year.”

Today’s announcement closely follows the release of a study by the Kaiser Family Foundation’s Commission on Medicaid and the Uninsured which also credited ARRA and CHIPRA with enabling States to expand access to care for low-income, uninsured children. In a 50-state survey, the Commission concluded that 26 states expanded and/or simplified their Medicaid and CHIP programs in 2009. A copy of the complete report can be found at http://www.kff.org.

State award amounts today are:

Alabama $39.1 million

Alaska $789,000

Illinois $9.1 million

Louisiana $1.5 million

Michigan $3.7 million

New Jersey $4.2 million

New Mexico $5.1 million

Oregon $1.6 million

Washington $7.5 million

Total: $72.6 million

CMS today also released a letter to state health officials providing more detailed guidance on the criteria for qualifying for a bonus payment for 2009 and in future years. That letter will be available on the CMS web site at www.cms.hhs.gov/CHIPRA and also on the Insure Kids Now website at www.insurekidsnow.gov

Dr. Tish Ballance Still Getting Horrible Reviews in 2009

After getting wrapped up with Michael DeRose and being fined $10 Million Dollars as well as named in various lawsuits Dr. Tish Ballance hasn't learned one lesson but did anyone really expect it?

Stay away from Smile Starters, Access West Dental and any other dental clinic Dr. Tish Ballance is associated with!!

CORRECTION: Tish Ballance's clinic is named Carolina West, sorry 'bout that. It's original intended name was Access West when it was planned for Asheville.

Reviews are here:

• terrible experience
  
• My 5 year old daughter went to smile starters for an appointment to get some dental work done. I was told that bc she was nervous if they could not calm her down then they would stop and refer her to a sedation dentist. This did not happen, when she came out of her appointment after well over an hour later, she was very upset, crying, the back of her clothes were wet from sweat her hair was messy and wet from sweat and i was told that she had been combative and struggling but they still pulled 2 teeth from her like that. They should have stopped and just refered her. I have learned my lesson mothers and fathers never take your children to a dentist where you are not allowed to go in the room with them and be with them. They were terrible. (blessedme123, 12/03/2009)

• IRATE MOM
• by: Mark Boone CHARLOTTE, N.C. -- The owners of a chain of dental clinics, with offices in Charlotte, will pay more than $10 million in response to a federal investigation into alleged Medicaid fraud, the U.S. Attorney’s office said Wednesday. The owners of the company formerly known as Medicaid Dental Center did not admit to any wrongdoing as part of the settlement, said attorney James Wyatt. As first reported in a WCNC investigation, some parents complained they took their children to the Medicaid Dental Centers on Freedom Drive and N. Tryon Street for what they believed to be routine visits. The Charlotte offices are now operating under the name ‘Smile Starters.’ Wyatt said the clinics are under new management. Christy Dillbeck, a west Charlotte mother, said she was asked to wait in the lobby of a Medicaid Dental Center as a dentist placed her then-four-year-old son on a papoose board, a device used to restrain children. The dentist then drilled into 16 of her son’s baby teeth and installed steel caps, without her knowledge, she said. “That’s a lot, a lot of work,” Dillbeck said. “And to imagine all of the children that had to go through what my son went through, it breaks my heart to even think of it.” At least six other families contacted WCNC with similar allegations. In a statement issued Wednesday morning, U.S. Attorney Gretchen Shappert said Medicaid Dental Center performed “baby root canals,” which were not medically necessary. The procedures were performed between 2001 and 2003, Shappert said. “The dentists subjected their child patients to invasive and sometimes painful procedures, often for the sake of obtaining money from the North Carolina Medicaid program,” said Jeffrey Bucholtz, an N.C. Assistant Attorney General. Dentists Letitia Ballance and Michael DeRose are named in the government settlement as co-owners of the Medicaid Dental Center. Wyatt, who has represented Ballance and DeRose in both federal and state inquiries, said they are no longer working as dentists in Charlotte and are in the process of selling their North Carolina dental practice. Federal authorities said Medicaid Dental Center and its owners will reimburse the government at least $5 million for the allegedly false claims and another $5 million in fines. A portion of the settlement amount will be distributed to the N.C. Education Fund. None of the settlement money will go to the parents of the children who underwent the treatment, said attorney Darren Dawson, who represents five families which are considering a lawsuit against the company formerly known as Medicaid Dental Center. (momofthree, 03/13/2009)

Mike DeRose and Louis Carleo provded funding for Tony Ianne, indicted on 72 counts of mortage fraud

Here's another story where ole Michael DeRose's name comes up in providing funding for another Pueblo criminal. 

No real surprise here is there, other than he's not indicted!!

Yet anyway.

But as we all know, Michael DeRose only want to do good for the community, help the little children with his Small Smiles Clinics, save the Children at his Smile Starter clinics in North Carolina...right.

Yeah, whatever!  The DeRose/Roump/Carleo bunch only care about $$$$$!

By JAMES AMOS
THE PUEBLO CHIEFTAIN

The Pueblo County grand jury has indicted Rosario's restaurant owner Anthony "Tony" Ianne on 72 counts accusing him of mortgage fraud involving fake loan applications, fake pay stubs and, in some cases, having managers at his restaurant lie about the employment of prospective homebuyers.

The indictment was filed Monday in Pueblo District Court. The grand jury also indicted John Valle of Denver, the owner of Colorado Mortgage Firm, as well as Colorado Mortgage employees Brianna Valle and Sheldon Carlisle, naming them as co-conspirators with Ianne.

Pueblo District Attorney Bill Thiebaut said Monday that Ianne was the "principal actor" in the mortgage fraud incidents, which the indictment alleges took place between 2005 and 2007.

Ianne was indicted by the grand jury in October in connection with witness tampering allegedly for telling one of the homebuyers described in Monday's indictment not to talk to investigators.

Monday's indictment included a warrant for Ianne's arrest and a summons for the other three people to appear in court. Ianne surrendered at Pueblo County jail on Monday, and was released later in the afternoon on $100,000 bail. The indictment alleges that Ianne had bought a large number of "distressed properties" and needed to sell them to clear up his lines of credit.

According to the indictment, Ianne - unable to sell enough of the properties quickly enough - turned to "a universe of friends, family and employees" between 2005 and 2007 and asked them to be buyers.

The indictment stated that several of those people each bought multiple properties, even though some couldn't afford them. The indictment alleges those individuals were able to buy the properties because Ianne and Colorado Mortgage faked the financial credentials of the buyers.

The four buyers named as victims in the indictment were Mark Secorna, William Dotson, Penny Dominguez and Jeremy Garnett. They bought as many as 19 rental houses in total, but lost many of them to foreclosure later when renters moved out and could not be replaced.

The buyers, according to the indictment, "began to understand what had happened once their homes went into foreclosure," then turned to the district attorney's office and complained about discrepancies in their loans.

The indictment alleges that Ianne and Colorado Mortgage did the following:

Illegally provided the buyers with money for their down payments without disclosing it on loan and HUD (Housing and Urban Development) forms.

Paid the buyers illegal kickbacks, "secret payments to the buyers after closing," calling them "landscaping fees" and writing the checks from another Ianne company. The indictment also alleges that Ianne himself and also through his manager, Paul Andrada, did not always pay the buyers the amounts they were promised.

Falsified loan applications, sometimes with a special computer program called "Calyx," to make the buyers appear more attractive to lenders. None of the buyers should have qualified for multiple mortgages, according to the indictment. The closing dates for the homes were arranged to happen quickly to avoid disclosing that the buyers had multiple mortgages or loan applications.

When lenders began to ask questions in 2006, the group created even more false documents to try to prove that the buyers were good credit risks. According to the indictment, that included creating fake W-2 forms, pay stubs, bank statements and rental verifications.

The co-conspirators "on many occasions" forged the signatures of the four victims on legal documents.

"Furthermore," according to the indictment, "managers at Rosario's Inc. were told to verify the employment status of prospective (property) buyers who were not in fact employed by Rosario's Inc."

The indictment said all four buyers "had either performed contract labor for Ianne or had worked for him at his restaurant, Rosario's Inc."

Ianne's manager, Andrada, was not indicted, nor were were two Ianne employees named as being involved in the operation: Tami Cornelison, who was named in the indictment as someone who helped create false documents to help back up the bogus mortgage applications; and Dannete Gutierrez, who allegedly assisted in processing information for various buyers to present to mortgage brokers to arrange for loans.

The indictment also named some of Ianne's financial partners but did not accuse them of anything, saying: "During this period (2005-07), Ianne was also associated with other individuals who supplied funding for his business, Mike DeRose and Gino and Louie Carleo."

Contacted by The Chieftain on Monday, DeRose, a local dentist and civic leader, said: "I invested with (Ianne). I have no (other) comment.”

Louie Carleo, a local developer and civic leader, said: "I’ve never heard anything about it (the indictments and the business). It’s all news to me. I was never aware we did anything with him (Ianne).”

Ianne and the three Colorado Mortgage officials each were indicted on 29 counts of conspiracy to commit forgery, 20 counts of conspiracy to commit theft of more than $15,000, eight counts of conspiracy to commit computer crime in excess of $15,000, 14 counts of conspiracy to commit forgery, and one count of violating the state's organized crime law against "conducting an enterprise through a pattern of racketeering activity."

Thiebaut, the county's chief prosecutor, declined to say Monday if anyone else would be indicted or accused in the scheme.

"All I can say is that the 2009 grand jury continues to meet and investigate crimes in our community," he said.

Thiebaut said the court was asked for a warrant to arrest Ianne because of his status as the principal individual in the case. He noted that Ianne still faces the five counts in the October grand jury indictment of tampering with a witness/victim, retaliation against a witness/victim, first-degree criminal trespass and second-degree burglary.

Thiebaut also said that there were more than four victims.

"There were numerous people that came forward," he said. But "the grand jury decided to concentrate on these people at this time."

The case will be complicated, Thiebaut said, but added: "I'm confident we can prove our case beyond a reasonable doubt."

Ianne's attorney, Randy Jorgensen, said he hadn't seen the indictment Monday. But he repeated his earlier complaint - made in October when Ianne was previously indicted - that it's too easy to indict someone with a grand jury, and that the indictment doesn't prove Ianne is guilty of anything.

"They've been working on it for two years," he said of the grand jury's work on this case. "If you throw enough crap up against the wall . . ."

He said he thinks the grand jury was influenced by witnesses who were promised immunity, making them "bought and paid for."

"You buy your testimony with immunity," he said, adding: "I don't think Tony ever met Mr. Valle and (Ianne) definitely didn't ever meet the other Valle or Carlisle."

Jorgensen also said of the four home buyer victims: "Everybody who went into this went into it with their eyes wide open."

jamos@chieftain.com