The founder of a Milwaukee prenatal care nonprofit that was supposed to help prevent babies from dying before their first birthdays is expected admit to stealing more than $4.3 million from Medicaid, federal court records show.
Demaryl Howard, who owned and operated Fortunate Futures, has signed a plea deal that will include pleading guilty to one count of felony healthcare fraud and agreeing to forfeit $4.3 million “traceable to the offense.”
Howard, 54, is expected to enter a guilty plea during a June 26 hearing at the federal courthouse in downtown Milwaukee, records show. He and his attorney, Brian Fahl, did not immediately respond to requests for interviews.
Court documents show that Howard was responsible for Fortunate Futures billing Medicaid as his company had provided 10 hours of services to a client in September 2021 – even though the client had died the previous month.
A woman who worked for Fortunate Futures, Pongella Welch, is also expected to plead guilty on June 8 to one count of making false statements relating to healthcare matters, which is also a felony. That charge is linked to her involvement in Fortunate Futures billing Medicaid for services that weren’t provided, records show.
Welch, 51, could not be reached immediately for an interview.
These cases and others against former prenatal care coordination company owners and associates come after a 2022 Journal Sentinel investigation into the companies, known as PNCCs. The companies are meant to help connect low-income pregnant women and mothers with badly needed health, counseling and referral services, but the industry has been plagued by fraud.
Three other former prenatal care company owners investigated by the Journal Sentinel – Markita Barnes, Precious Cruse and Lakia Jackson – were convicted and sentenced in recent months.
The newspaper’s investigation uncovered widespread problems with fraudulent billing at a number of Milwaukee-area PNCCs, including charging taxpayers for services that were never provided and product giveaways at “community baby showers” used to obtain mothers’ Medicaid numbers, which allowed some companies to submit fake bills to Medicaid.
The state has long had one of the highest rates of Black infant mortality in the nation. In Wisconsin, Black babies are three times more likely to die than white babies, and Black women are five times more likely to die from complications linked to pregnancy and childbirth.
Other PNCC owners found guilty of Medicaid fraud
Federal prosecutors said in court documents that “beginning by at least January 2019 and continuing through May 2022,” Howard executed a scheme to defraud Medicaid, including in the following ways:
Prosecutors said Howard submitted bills totaling more than $5 million, including false and fraudulent statements that caused Medicaid to pay him more than $4.3 million “to which he was not entitled.”
The cases against Howard and Welch will bring the total to five prenatal care coordination company owners and associates who have been convicted of felonies in recent months.
Precious Cruse, who ran Caring Through Love on Milwaukee’s northwest side, was sentenced in January to more than nine years in prison and ordered to pay about $780,000 in restitution. Cruse was convicted on 17 federal felony charges, including health care fraud and identity theft.
Markita Barnes, who ran Here for You Prenatal Care Coordination Services, was found guilty in November of 20 federal felony charges, including health care fraud, identity theft, paying kickbacks and obstructing a fraud investigation after the jury found that she pocketed $2.3 million in Medicaid money. Barnes was sentenced in March to just over 10 years in prison.
LaKia Jackson, who ran the now-defunct We Care Services, pleaded guilty in December to health care fraud and identity theft, both felonies. Jackson, who stole about $2.6 million in Medicaid money, was sentenced in March to five years in prison.
The cases, which have been prosecuted by Julie Stewart and Kate Biebel, both assistant U.S. attorneys, followed investigations by the FBI and the state Department of Justice’s Medicaid Fraud Control and Elder Abuse Unit.
State cut off funding to Fortunate Futures in 2022
The state cut off funding for Fortunate Futures in May 2022 after the Department of Health Services’ Office of the Inspector General said it found credible allegations of fraud, including billing for services not rendered, according to documents obtained through open records requests.
That same year, Howard objected to the suspension in a letter to the state, arguing they should be given a “good cause exception.”
“We are a small grassroots organization and much of what we learned was only from the PNCC handbook,” Howard wrote to regulators at the time. “I am willing to take any recommended trainings.”
Howard founded Fortunate Futures in 2010. The nonprofit’s Medicaid revenue for its prenatal care coordination program quickly skyrocketed, going from $17,000 in 2016 to more than $1 million in 2021, documents showed.
Howard was paid $235,000 in 2021 for his work as the chief executive officer of Fortunate Futures, online records show.
The Medicaid payments continued even after state auditors in 2017 and 2018 demanded Fortunate Futures pay back nearly $40,000 due to errors they found. The company repaid the money.
Several women also told the Journal Sentinel that in 2019 a then-Fortunate Futures care coordinator scammed them, taking thousands of dollars they gave her after she promised to find them housing.
Howard at the time said he had said he cut ties with her in 2019.
The care coordinator denied wrongdoing.
“Stop HARASSING ME,” the care coordinator wrote in a July 2022 text after hanging up on Journal Sentinel reporters who called to ask about the allegations.
Contact Mary Spicuzza at (414) 224-2324 or mary.spicuzza@jrn.com. Follow her on Twitter at @MSpicuzzaMJS.
This article originally appeared on Milwaukee Journal Sentinel: Milwaukee prenatal nonprofit founder to plead guilty in $4.3M Medicaid fraud case
Reporting by Mary Spicuzza, Milwaukee Journal Sentinel / Milwaukee Journal Sentinel
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