Bay City Surgeon Charged in Health Care Fraud, Money Laundering Scheme

The United States Attorney’s Office, Eastern District of Michigan released the following statement:

An indictment unsealed Wednesday, July 10 charges Dr. Vasso Godiali, age 56, vascular surgeon, with orchestrating a $60 million health care fraud scheme. Dr. Godiali is also charged with money laundering, for financial transactions involving approximately $49 million in proceeds he derived from the scheme. The indictment was announced by United States Attorney Matthew Schneider.

Schneider was joined in the announcement by Michigan Attorney General Dana Nessel, Special Agent in Charge Timothy R. Slater of the FBI’s Detroit Division and Special Agent in Charge Lamont Pugh III of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Chicago Regional Office.

According to the indictment, Godiali submitted false and fraudulent claims for the placement of stents in dialysis patients and for the treatment of arterial blood clots. The indictment further alleges that Godiali exploited medical billing software to improperly maximize payments from Medicare, Medicaid, and Blue Cross Blue Shield of Michigan. The indictment further alleges Godiali submitted false and fraudulent claims to Medicaid, Medicare, and Blue Cross for services not rendered and that he “unbundled”
claims by exploiting modifier-59 to falsely claim he was performing many separate and distinct procedures, when in fact he was entitled to a single reimbursement for a single procedure.

The indictment further alleges that Godiali utilized six corporations through which he laundered approximately $49 million, which he ultimately used to fund investment accounts at multiple financial institutions. In addition, the indictment alleges that he engaged in money laundering by using proceeds from his scheme to pay property taxes on a Houghton Lake, Michigan, residence.

“This is a large, significant and important prosecution. Health care fraud schemes, such as the one alleged to have been committed by Dr. Godiali, divert millions of dollars from public programs intended to help those in need for the sole purpose of lining the pockets of greedy doctors,” stated United States Attorney Matthew Schneider. “I salute Attorney General Dana Nessel and her staff, along with the entire
law enforcement team that labored so tirelessly on this case. The work that culminated in to today’s indictment demonstrates cooperation and teamwork at its best.”

“Flagrant efforts to scam Medicare, Medicaid and Blue Cross Blue Shield of Michigan are despicable in any degree—but particularly so when tens of millions of dollars are involved. Thanks to United States Attorney Matthew Schneider and his team along with the efforts of our own Health Care Fraud Unit and the Michigan Department of Health and Human Services Office of Inspector General staff, which initiated the early investigation into this alleged health care fraud scheme, it has come to a halt,” said
Michigan Attorney General Dana Nessel. “Once it became clear that the potential Medicare fraud exposure in this case was ten times what our own Medicaid fraud exposure was, we reached out to the U.S. Attorney’s Office to increase the depth and breadth of the investigation. I am proud of the efforts of everyone involved and look forward to making sure this doctor never sees another dime of taxpayer money.”

“Today’s indictment proves the collective resources of law enforcement and the private sector can successfully combat fraud in our health care system,” said Special Agent in Charge Slater. “Fraud schemes of this type cost tax payers billions of dollars each year and remain a top investigative priority of the FBI, HHS, and insurance companies across the country.”

“Healthcare fraud impacts everyone. The submission of false and fraudulent claims drives up the cost of healthcare and wastes vital taxpayer dollars”, said Lamont Pugh III, Special Agent in Charge, U.S. Department of Health & Human Services, Office of Inspector General. “The OIG will continue to work with our federal, state, and private sector partners to identify fraud schemes and hold parties that execute these schemes accountable.”

The United States Attorney’s Office also filed a related civil lawsuit seeking the forfeiture of approximately $39.9 million seized from accounts controlled by the defendant or related to four separate real estate transactions.

An indictment is only a charge and is not evidence of guilt. Each defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.

If convicted of a health care fraud charge, the defendant faces a maximum sentence of imprisonment of ten years, and a maximum fine of $250,000 on each count. If convicted of money laundering, the defendant faces a maximum sentence of twenty years of imprisonment, and a maximum fine of twice the amount laundered.

The case was investigated by Special Agents of the HHS and FBI, with cooperation and assistance from the Michigan Attorney General’s Office, Michigan Department of Health and Human Services – Office of Inspector General. The case is being prosecuted by Assistant U.S. Attorneys Craig F. Wininger and Philip
A. Ross.