Acting AG Platkin: Owner of NJ Mental Health Clinic chain charged with regulatory scheme to defraud Medicaid and use clinics to hide $1 million in income
tax evasion scheme
Trenton – Acting Attorney General Matthew J. The billing scheme then used clinics with his wife to hide the couple’s income in a million-dollar tax evasion scheme.
Cassell, 56, of Berkasey, Pennsylvania, founder of Kwenyan Professional Health Services, LLC and Kwenyan and Associates (“Kwenyan Entities”) are charged with first-degree money laundering, second-degree theft by deception, multiple counts of conspiracy, insurance fraud, and felony Related in an indictment delivered by a state grand jury on August 25, 2022.
The charges stem from a 2019 OIFP investigation that revealed that from January 2015 through October 2021, when the Kwenyan entities ceased operations, Cassell, with the help of his employees, engaged in schemes to defraud Medicaid and defraud the Progressive Insurance Company, which provided auto insurance coverage for a fleet It houses more than 20 service trucks used by clinics. A subsequent joint investigation by the OIFP and the New Jersey Department of the Treasury revealed that Cassell and his wife, Bindu R. jointly filed NJ 2016, 2017 and 2018 tax returns.
Acting Attorney General Matthew J. “We will not allow criminals to pocket their pockets at the expense of the vast majority of law-abiding New Jerseyans who do not illegally enrich themselves.”
“Insurance fraud and tax evasion are serious crimes with grave consequences,” said insurance fraud attorney general Tracy M. Thompson. “The charges in this indictment send a clear message that the OIFP will vigorously investigate anyone suspected of these crimes and hold violators accountable.”
Cassell is accused of conspiring with and directing Quenyan employees, Carmen C. Ward, 63, of Flemington, NJ, and Knichole Hawke, 47, of Russell, NJ, in a Medicaid fraud scheme in which thousands of false claims were submitted to Medicaid to pay for psychiatric expenses. Health services that were never provided, or where group services were provided but bills for individual or family psychotherapy services were paid. All three are charged in the indictment with second-degree conspiracy to commit health care claims fraud, second-degree health care claims, third-degree conspiracy to commit Medicaid fraud, and third-degree Medicaid fraud.
Cassell is also accused of conspiring with employee Jon Johnson, 31, of Levittown, Pennsylvania, in a scheme to illegally obtain lower premiums for insurance coverage on more than 20 trucks used by Kwenyan entities. According to the charges, in obtaining coverage from Progressive Insurance, Cassell and Johnson falsely claimed that the vehicles, which had been parked and operated from Quinyan clinics located throughout New Jersey, would be placed in a garage in Pennsylvania. As a result, the defendants were able to insure the vehicles in Pennsylvania and thus received a total financial benefit of more than $1,000.
In addition, Cassell and his wife, an officer with the Queenian Entities, are accused of using their mental health clinics to conceal unreported income, including by disguising it as loan repayment checks from the Queenian Entities to Daniel Cassell. The couple are also accused of failing to report more than $11 million in additional income that New Jersey earned on the non-resident NJ income tax returns they filed together in 2016, 2017, and 2018, resulting in more than $1 million in unpaid tax liabilities. They were charged with second-degree misconduct of a corporate official, three counts each with third-degree fraudulent filing and third-degree failure to pay taxes.
The charges are mere accusations, and the accused are considered innocent until proven guilty. Second-degree charges carry a sentence of five to 10 years in state prison and a fine of up to $150,000, and third-degree charges carry a sentence of three to five years in prison and a fine of up to $15,000.
Deputy Attorney General Charisse M. Penalver and Vladimir D’Argenio are suing the case in favor of the Attorney General’s Office for Insurance Fraud, the Medicaid Fraud Prevention Unit. The investigation of the OIFP was conducted by investigators in the Medicaid Anti-fraud Unit. The investigation was conducted for the New Jersey Department of Treasury by the Tax Division, Bureau of Criminal Investigation.
Insurance Fraud Prosecutor, Thompson, thanked the State Comptroller’s Medicaid Fraud Division for referring the case to the OIFP.
In New Jersey, the New Jersey Medicaid Anti-Fraud Unit protects Medicaid and Medicaid beneficiaries from fraud, waste, and abuse. The Medicaid Fraud Prevention Unit is located within the New Jersey Attorney General’s Office for Insurance Fraud Prevention.
The Medicaid Fraud Unit of New Jersey receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant totaling approximately $4.1 million for the Federal Fiscal Year (“FY”) 2022. The remaining 25 percent, which total approximately $1.3 million FY 2022, funded by the state of New Jersey.
To report Medicaid fraud or patient abuse and neglect please email NJMFCU@njdcj.org Complete Report Medicaid Fraud, Abuse and Neglect Form, or call 609-292-1272. The Medicaid Fraud Unit also conducts presentations to educate the public and the healthcare industry regarding Medicaid fraud. For more information on presentations, call 609-292-1272.
To report suspected tax fraud, please call the New Jersey Treasury, the 24-hour Tax Division with its registered advice line at 609-322-6057.
For D. Cassell: Lee Vartan, Esq., West Orange, NJ
For B. Cassell: Zach Intrater, Esq., New York, NY
For Ward: Michael R. Shulman, Esq., Jersey City, NJ
For Hawk: Unknown