Another healthcare CEO busted for fraud

Fraud and other illegal activities by healthcare executives continued on Friday when the CEO of a North Carolina behavioral health provider was slapped with an 8-year prison sentence. 

Shephard Lee Spruill of Greenville, North Carolina was also handed an almost $7 million in restitution and forfeitures after pleading guilty to healthcare fraud conspiracy and perjury charges, the Department of Justice announced. The DOJ charged Spruill with healthcare fraud conspiracy and 5 years in prison for perjury.

[Also: Florida hospital CEO charged with fraud after allegedly embezzling funds]

The two sentences will be served concurrently. He was also ordered to pay $5,998,874 in restitution to the North Carolina Medicaid Program, the South Carolina Medicaid Program and "another victim of the scheme" and must forfeit another $939,989.50 in criminal proceeds. Spruill is also banned from participation in Federal healthcare benefit programs for life, the DOJ said.

Spruill's case stemmed from an investigation of Pitt County behavioral health provider Terry Lamont Speller, his biller Donnie Lee Phillips, II and Medicaid provider Reginald Saunders.

[Also: Two new healthcare fraud cases top $2 million in alleged illegal activity]

According to the DOJ, which cited criminal information and evidence discussed in open court, during Spruill's tenure as CEO of Carolina Support Services, he supplied hundreds of patient names and identifiers to Speller, who had Phillips bill the North Carolina Medicaid Program for millions of dollars in fraudulent mental health services that were never provided.  

The investigation also found that Spruill billed the South Carolina Medicaid program for millions in fake services through another provider he owned.

Spruill's fraud proceeds were delivered as "fictitious, no-document loan repayments." When Spruill appeared before a federal grand jury, he initially lied about his involvement with Speller, claiming the two did not have a business relationship, the DOJ said.

Spruill is the latest in a string of healthcare execs to get nabbed for fraud and other illegal activities in recent months. In early April, CEO John Michael Gowder was indicted as part of Operation SCOPE on federal charges for illegally prescribing and obtaining thousands of prescription pain medications "outside the usual course of professional medical practice and for no legitimate medical purpose," according to the Department of Justice. 

Gowder was the CEO of Union General Hospital in Blairsville, Georgia. Gowder allegedly conspired with others in the system to illegally obtain oxycodone, hydrocodone, and alprazolam, which is commonly prescribed to treat anxiety and is sold generically and under the name Xanax. Mike Gowder is said to have abused his position as CEO, firing hospital employees who tried to expose the alleged illegal prescribing practices, or intimidating them into not exposing them, according to the DOJ.

Just this week a Florida hospital CEO was also charged with wire fraud and identity theft for his role in a scheme in which he allegedly embezzled hospital funds to pay personal expenses. According to the DOJ who cited the indictment against him, Phillip Hill Jr. of Blountstown, Florida served as both the CEO and department head of Emergency Management Services for Calhoun-Liberty Hospital.  He allegedly billed the hospital for goods it never received using invoices in the name of "Southeastern Medical Supply," a fake business connected to a bank account he himself controlled. 

He faces 24 counts of wire fraud and 4 counts of filing false tax returns.

Twitter: @BethJSanborn
Email the writer: beth.sanborn@himssmedia.com