Texas man faked Cerner ties in bizarre $1 million healthcare fraud, court says

Albert Davis and co-conspirators allegedly impersonated Cerner employees, physicians, investors and others--both in e-mails and in-person visits.

A Texas man impersonating an MRI salesman working with Cerner Corp. convinced employees of a Dallas hospital to wire him more than $1 million using an elaborate network of fake correspondence and several co-conspirators, according to the U.S. Attorney’s Office in Western Missouri.

Albert Davis, 54, of Richardson, Texas, was charged with wire fraud after employees of Dallas Medical Center and Prime Health Care -- which acquired the hospital during the course of the scheme -- transmitted two wire payments totaling $1.1 million to the conspirators’ bank account to purchase the MRI, according to U.S. Attorney Tammy Dickinson.

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Davis and at least six, unnamed co-conspirators allegedly told the hospital they were working with Kansas City-based Cerner, one of the largest healthcare IT providers in the country. Davis and another co-conspirator claimed their company, iHeart, had breakthrough cardiac technology that would change the way patients were diagnosed, according to the affidavit.

Cerner had originally generated a real quote to sell the MRI equipment, in partnership with Davis, to Dallas Medical Center, according to the affidavit. However, in Oct. 2012, Cerner told Davis it would not pursue the MRI deal with him, the affidavit states.

Dallas Medical Center was never informed that Cerner was out of the deal, according to CEO Raji Kumar.

Instead, Davis and co-conspirators allegedly impersonated Cerner employees, physicians, investors and others -- both in e-mails and in-person visits. They created a fake Cerner business entity, opened a fake Cerner bank account, registered a fake Cerner website, created fake Cerner employee e-mail accounts and leased virtual office space for a fake Cerner address in Kansas City, according to the U.S Attorney’s Office.

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Davis and co-conspirators also allegedly paid for cellphones with local phone numbers.

Kumar and representatives of Dallas Medical Center and Prime Health Care Services were invited to a site visit in Plano, Texas, to see the new MRI, according to the affidavit. There they were given a demonstration of the new technology by an individual identified as Senior Physicist Suresh Mitta of Cerner, who was actually a co-conspirator, according to the affidavit.

After the visit, on Nov. 4, 2012, Prime Health Care Services made the decision to purchase the new MRI system for $1.3 million. Conspirators allegedly provided instructions to wire the funds to a fake Cerner bank account. They sent an alleged fraudulent invoice that divided the payment into three separate wire transfers of $508,250, $553,300 and $268,550, according to the affidavit.

The first two payments were made in November and December 2012; the third payment was never made because the fraud was detected, it stated.

Kumar told federal officials the installation was never completed. After numerous calls with no results, hospital employees decided to contact Cerner directly. That’s when they learned the deal was a fake, according to the affidavit.

A Cerner employee who they thought they had been dealing with said the company had not sold them an MRI, it stated.

On June 26, 2013, Kumar exchanged calls and e-mails with Cerner employees who reviewed invoices supposedly sent from the company. They quickly identified the invoices as not authentic. The e-mails had an “@cernerinc” domain not used by Cerner, they said.

Davis had provided three names for references and Kumar said she contacted two of them, physicians from Oklahoma who told her they were happy with the MRI from Cerner and had no issues. However, when interviewed later by federal agents, both doctors said they had not talked with Kumar or anyone from Dallas Medical Center about an MRI.

Davis and at least one co-conspirator had created several businesses and entities in the scheme, according to the U.S. Attorney’s Office.

Co-conspirators are linked to at least 70 individual business entities registered in Texas, Colorado, Nevada, and Florida, according to Dickinson.

These entities often used similar names and addresses, but usually maintained separate business registration and bank accounts.

The affidavit also refers to another instance involving Dallas Medical Center in which Davis allegedly impersonated another company to sell a Cath Lab to the hospital, using the same techniques of registering a fake domain, fake e-mails, and a fake business entity, according to the U.S. Attorney’s Office.

Prior to the MRI negotiations, the hospital made four payments totaling $491,000 to CIS Cardiovascular, according to Dickinson. These payments actually were made to a bank account that Davis maintained.

In another separate case, Davis was charged with perjury in a federal criminal complaint filed in the Eastern District of Texas, related to his testimony in a civil trial in that district.

Davis, through his company LBDS Holding Company, LLC, sued a company called ISOL Technology, Inc., and two other firms for breach of contract, trade secrets misappropriation, civil conspiracy, unfair competition and theft of trade secrets. According to court records, the case went to trial in the spring of 2014 and the jury awarded LBDS a verdict of approximately $25 million. ISOL subsequently filed an emergency motion for sanctions against Davis’s company. In its motion, ISOL argued that LBDS manufactured and falsified evidence in the trial and committed a fraud upon the court. They asked the court to set aside the verdict.

During the trial, Davis and one of the unnamed co-conspirators both testified at trial about e-mails from the domain cernerinc.com. According to the affidavit, e-mails using the cernerinc.com domain were introduced as exhibits, along with a fake “Cerner Distribution Agreement” that committed Cerner to purchase 345 MRI systems from Davis.

Davis was arrested and charged with conspiracy to commit wire fraud on Feb. 20 and remains in federal custody awaiting a federal trial jury.

Twitter: @SusanMorseHFN