Owner of NJ mental health clinic chain charged with tax evasion scheme

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Trenton

The owner of a chain of mental health clinics in New Jersey has been accused of enlisting the help of his employees to defraud Medicaid in a bogus billing scheme, then, along with his wife, of using the clinics to hide the couple’s income in a $1 million tax. escape plan, was announced today according to Acting Attorney General Matthew J. Platkin and the Office of the Insurance Fraud Attorney (OIFP).

Daniel E. Cassell, 56, of Perkasie, Pennsylvania, founder of Kwenyan Professional Health Services, LLC and Kwenyan and Associates (the “Kwenyan Entities”), has been charged with First Degree Money Laundering, Second Degree Theft by deception and multiple counts of conspiracy, insurance fraud and related offenses in an indictment delivered by a state grand jury Aug. 25.

According to preliminary reports. the charges stem from a 2019 OIFP investigation which allegedly found that from January 2015 to October 2021, when the Kwenyan entities went out of business, Cassell, with the help of his employees, engaged in schemes to defraud Medicaid and defraud Progressive Insurance Company, which provided auto insurance coverage for a fleet of more than 20 service vans used by clinics. A subsequent joint investigation by OIFP and the New Jersey Department of Treasury allegedly revealed that Cassell and his wife, Bindu R. Cassell, 37, of Perkasie, PA, used the Kwenyan entities to hide income and also failed to disclose additional income on their jointly filed 2016, 2017 and 2018 NJ tax returns.

“Individuals who circumvent and circumvent the law to defraud state-funded insurance programs and avoid paying their fair share of taxes to undermine systems that are vital to the public’s well-being,” said the Acting Attorney General Matthew J. Platkin. “We will not allow criminals to line their pockets at the expense of the vast majority of law-abiding New Jerseyans who do not enrich themselves illegally.”

“Insurance fraud and tax evasion are serious crimes with serious consequences,” said Tracy M. Thompson, insurance fraud attorney. “The charges contained in this indictment send a clear message that the OIFP will rigorously investigate anyone suspected of these crimes and hold offenders accountable.”

Cassell is accused of conspiring with and directing Kwenyan employees Carmen C. Ward, 63, of Flemington, NJ, and Knyckholle Hooke, 47, of Roselle, NJ, in a Medicaid fraud scheme in which thousands of false reports have been submitted to Medicaid for reimbursement of mental health services that were never rendered or when group services were rendered but individual or family psychotherapy services were billed. The three were charged in the indictment with second degree conspiracy to commit health care claims fraud, second degree health care claims fraud, third degree conspiracy degree to commit Medicaid fraud and third-degree Medicaid fraud.

Cassell is also accused of conspiring with employee John Johnson, 31, of Levittown, Pennsylvania, in a scheme to illegally obtain lower premiums for insurance coverage on the more than 20 pickup trucks used by Kwenyan entities. According to the charges, in obtaining coverage from Progressive Insurance Company (Progressive), Cassell and Johnson falsely claimed that the vehicles, which were parked and operated at Kwenyan clinics throughout New Jersey, would be parked in Pennsylvania. As a result, the defendants could insure the vehicles in Pennsylvania, obtaining an overall monetary benefit of more than $1,000.

Additionally, Cassell and his wife, a Kwenyan Entities officer, are accused of using their mental health clinics to hide unreported earnings, including disguising them as Kwenyan Entities loan repayment checks to Daniel Cassell. The couple are also accused of failing to report more than $11 million in additional income earned in New Jersey on NJ non-resident tax returns they filed jointly in 2016, 2017 and 2018, which resulting in unpaid tax debts of more than one million dollars. They are charged with second degree misconduct of a corporate officer and three counts each of third degree of filing a fraudulent return and failure to pay third degree tax.

Charges are just charges and the accused are presumed innocent until proven guilty. Second degree charges carry a five to 10 year sentence in state prison and a fine of up to $150,000, and third degree charges carry a three to five years in state prison and a fine of up to $15,000.

Assistant Attorneys General Charisse M. Penalver and Vladimir D’Argenio are pursuing the case for the Insurance Fraud Attorney’s Office, Medicaid Fraud Control Unit. Detectives conducted the investigation for the OIFP in the Medicaid Fraud Control Unit. The investigation for the New Jersey Department of the Treasury was conducted by the Division of Taxation, Bureau of Criminal Investigations.

Insurance fraud attorney Thompson thanked the State Comptroller’s Office Medicaid Fraud Division for referring the case to the OIFP.

In New Jersey, the New Jersey Medicaid Fraud Control Unit protects Medicaid beneficiaries and the Medicaid program against fraud, waste, and abuse. The Medicaid Fraud Control Unit is part of the New Jersey Office of the Insurance Fraud Attorney.

New Jersey’s Medicaid Fraud Control Unit receives 75% of its funding from the U.S. Department of Health and Human Services in a grant totaling approximately $4.1 million for the federal fiscal year ( “FY”) 2022. The remaining 25%, totaling approximately $1.3 million for fiscal year 2022, is funded by New Jersey.

To report Medicaid Fraud or Patient Abuse and Neglect, please email NJMFCU@njdcj.org, complete the Medicaid Fraud and Patient Abuse and Neglect Reporting Form, or call 609-292-1272. The Medicaid Fraud Enforcement Unit also hosts presentations to educate the public and the health care industry about Medicaid fraud. For more information on presentations, call 609-292-1272.

To report suspected tax evasion, please call the NJ Treasury, Division of Taxation’s 24-hour registered hotline at 609-322-6057.

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