Hollidaysburg residents John H. Johnson and Paula Z. Johnson have pleaded guilty to conspiring to defraud the United States. The couple, both 62, faced this legal reckoning on Monday, March 25, 2024, as per the announcement from the U.S. Attorney's Office for the Middle District of Pennsylvania. Moreover, John H. Johnson acknowledged his involvement in plotting healthcare fraud.
How Did the Fraud Unfold?
The foundation of the fraud was laid in 2016 when John Johnson, trained in anesthesiology, crafted a plan with Rodney L. Yentzer and others. This strategy was aimed at illicit billing for costly urine drug tests (UDT) through their pain management practices, Lighthouse Medical and Pain Medicine of York. Without medical expertise, Yentzer acquired PMY at John Johnson's urging in 2014. The blending of Lighthouse Medical into PMY occurred in 2017. This amalgamation stopped in November 2019 following law enforcement's execution of search warrants across various sites.
A pivotal moment in their arrangement occurred in March 2016. John Johnson and Yentzer struck a deal with the new proprietors of a rural Critical Access Hospital near the Florida and Alabama border. The agreement facilitated the sale of Lighthouse Medical's UDT services to the hospital, granting it exclusive billing rights. The hospital compensated Lighthouse Medical with a $900 kickback for each test performed.
Despite the agreement costing the hospital due to the kickbacks, the Critical Access Hospital's unique status allowed it to secure substantial payments from Medicare and private insurers, rendering the arrangement highly profitable. As a result, the hospital disbursed substantial amounts to Lighthouse Medical, including payments of $816,300 and $628,200 within a week in July 2016 for hundreds of urine drug tests.
This elaborate setup led to the Critical Access Hospital billing approximately $1.4 billion for unnecessary laboratory tests, largely UDT. Lighthouse Medical, in turn, netted $2,341,775 in kickbacks over four months, with the lion's share going to Johnson.
Evading Financial Obligations
The Johnsons' guilty admissions also illuminate their attempts to avoid paying over $3 million in taxes to the U.S. Government. This debt stemmed from John H. Johnson's earlier convictions, including various tax offenses and a separate healthcare fraud scheme.
Following his 2017 sentencing to an 84-month prison term, John H. Johnson, in collaboration with Yentzer, manipulated financial transactions to ensure that Paula Z. Johnson received payments through the PMY payroll, among other dealings. This was part of a broader effort to channel profits from PMY's operations directly to the Johnsons, evading restitution payments.
The Outcome of These Deceptions
Between mid-2017 and late 2019, PMY billed Medicare around $10 million for UDT, with payments exceeding $4 million. The Johnsons' and Yentzer's scheming ensured a continuous flow of money to the Johnsons, bypassing John H. Johnson's restitution obligations.
What Are the Penalties?
The implications of their guilty pleas are severe. Conspiracy to defraud the United States has a maximum penalty of five years in prison, followed by supervised release and fines. Additionally, for John H. Johnson, confessing to health care fraud introduces a further potential penalty of up to ten years in prison, supervised release, and fines. The final determination of their sentences falls to a federal judge, guided by the federal statutes and sentencing guidelines.
A Case Closes on a Scheme of Deception
The case against the Johnsons and their co-conspirator highlights a glaring abuse of the healthcare system, underpinned by greed and sophisticated fraud. As this chapter ends, the legal process unravels the breadth of their deceit, awaiting the final sentencing decisions in this complex case of conspiracy and fraud against the United States government.
