Faith Newton Kimaru, 52, and Winnie Waruru, 42, made the headlines after they were caught up in a scheme where they allegedly defrauded the US government of $100 million (approximately Ksh12 billion) in healthcare fraud.
According to a report by the Nation, Faith Newton continued with the healthcare fraud scheme six years after her husband Francis Kimaru was apprehended for the same.
Appearing before a court in Boston, Massachusetts last week, Waruru pleaded guilty to charges of conspiracy to commit healthcare fraud, conspiracy to pay and receive kickbacks, two counts of falsifying statements and one count of making a false statement in a healthcare matter.
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“The charges of healthcare fraud, conspiracy to commit healthcare fraud, money laundering conspiracy and money laundering each provide for a sentence of up to 10 years in prison, three years of supervised release and a fine of up to $250,000 or twice the amount of money involved in the laundering,” said the US Department of Justice.
“The conspiracy to pay kickbacks, make false statements and make a false statement in a healthcare matter each provides for a sentence of up to five years in prison, three years of supervised release and a fine of up to $250,000.”
“More than 80 per cent of the spending growth since 2013 has been driven by 62 companies that started doing business with the state during that time,” the state of Massachusetts said during the probe.
Things took a turn for the worst when one of the doctors licensed by the State of Massachusetts complained that Compassionate Homecare was seeking authorisation to provide services, through “phony” referral forms, for patients who did not need home health services.
The investigation took three years after which the prosecution was convinced that they had a case against Kimaru’s company along with 11 others. They were found guilty of admitting patients who did not require Medicaid services and then billing the state, making millions of dollars in the process.
“The company routinely and knowingly billed the state for services that had not been authorised by a doctor and, in several instances, altered records to make it look like patients denied care by doctors had been approved,” said investigators.
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“Additionally, the company billed the state for care it never provided to people who were already at inpatient facilities while, in some cases, forged doctors’ signatures after the physicians refused to authorise services,” they said.
“Compassionate Homecare either knew that it was submitting false claims for payment to Mass Health or recklessly disregarded its obligation to familiarise itself with the legal requirements, standards and procedures of the Medicaid programme,” the prosecution told the court.
“Based on its unlawful billing, Compassionate Homecare received overpayments from Mass Health of at least $34 million (Ksh4.1billion),” said prosecutors.
After they were cornered, they entered into a plea agreement deal which took another three years to finalise, and in 2020, Compassionate Homecare filed for bankruptcy.
In the plea agreement, Kimaru and his company agreed to pay back to the US government $6.53 million (Ksh787 million) in exchange for a two-year suspended sentence. He also agreed to pay $85,000 (Ksh10.2 million) to his former 79 employees, who had been rendered jobless after the discovery of the fraud.
“As recommended by Assistant Attorney General Kaushal V. Rana and Mr Kimaru’s lawyer, S. James Boumil Jr, the judge suspended the jail sentence for two years, during which time Mr Kimaru will be on administrative probation,” the US Department of Justice said, following the agreement between the prosecution and Kimaru.
“Home health aides provide critical services to vulnerable populations, and they, like all workers, must be paid their earned wages in full and in accordance with our laws.”
Though it looked like a win for the state at the time, they did not know that Kimaru’s wife, Faith Newton, who could not be directly linked to Compassionate Homecare, was running her own fraud scheme, and had made three times the money Kimaru made.
Faith Newton, Winnie Waruru
The two Kenyan nurses were unheard of dollar millionaires until their fraud scheme was exposed. They drove expensive cars, one of them a Maseratti and the other a Range Rover. Between them, they had five properties and operated 40 bank accounts.
The two allegedly paid kickbacks to acquire referrals and retain patients over a five year period. According to detectives, the two used Arbor Homecare Services LLC as a conduit to siphon $100 million (Ksh12 billion) from MassHealth and Medicare between January 2013 and January 2017.
Court papers indicate that Newton was part-owner and operator of Arbor Homecare Services LLC, while Waruru was a licensed practical nurse. On paper, Waruru was an employee of the company, but according to court records, she appears to have been more than that.
To make more money, Newton’s company is said to have entered into fradulent agreements with relatives of MassHealth patients and purported to provide unecessary medical services billed to the state as “visits”. Arbor would reimburse a relative staying with a sick kin for fictitious nurse visits. It would then make claims to MassHealth.
The two are also said to have been paying kickbacks to patients under their care to retain them as part of Arbor Homecare Services LLC.
According to the detectives, Waruru allegedly “caused Arbor to bill MassHealth over $1.2 million (Ksh120 million) in fraudulent nursing visits” and “passed money from Newton to two Arbor patients in order to retain them.” By locking in the patients, Newton and Wururu billed for services that were neither rendered nor needed.
The two are also said to have been paying kickbacks for patient referrals, regardless of medical necessity requirements.
According to the prosecution, by entering into the fraudulent relationships with patients and their relatives, the company found it easy to purport “to provide home health aide services that were not medically necessary and routinely billed for fictitious visits that did not occur”.
“Waruru and Arbor billed MassHealth for Waruru’s skilled nursing visits, many of which she did not perform, were medically unnecessary, or were not approved by a physician,” the charge sheet said.
The prosecution noted that Newton targeted low-income, disabled, and/or people with mental health issues.
The civil compalint further indicated that Faith Newton allegedly laundered the illegally acquired wealth. According to court records, Arbor was registered by a Mr Njoroge Muiruri, a registered nurse, and it ceased to exist in 2017 after he filed a certificate of cancellation with the Massachusetts Secretary of State. It is not clear whether the company folded due to the investigations.
On March 10, 2016, Faith Newton bought a luxurious manison through a $2,012,177 (Sh242,688,667) wire transfer from her Bank of America account to lawyer Robert Wyman, who then forwarded the money to property manager Anthony Dinapoli.
The 10,777-square-foot, red brick mansion rests on six acres of a lush green lawn in North Andover, Massachusetts. It has 9 bedrooms, a four-car garage, a gourmet kitchen, a helicopter landing pad and a backyard overlooking Lake Cochichewick.
In 2013, American cable TV company HBO used the palatial mansion as the central location of their comedy film Clear History, starring Hollywood star Larry David.
Faith also spent $150,000 (Ksh18 million) on a brand-new, white Italian-made Maserati Granturismo.