Following a 10-day trial before U.S. Chief District Judge Barbara M.G. Lynn, a jury convicted Terry Lynn Anderson, 67, and Rocky Freeland Anderson, 37, of Dallas, on multiple felony counts related to a health care fraud scheme they operated, announced Erin Nealy Cox, U.S. Attorney for the Northern District of Texas.
The jury convicted the father and son duo on one count of conspiracy to commit health care fraud, eight counts of health care fraud, and four counts of aggravated identity theft. The jury convicted Terry Anderson on two additional health care fraud counts.
The evidence at trial showed that the defendants defrauded Blue Cross and Blue Shield of Texas (Blue Cross) by submitting claims on behalf of employees of American Airlines, Inc. for hearing aids that were not needed and, in many cases, never dispensed to the patient. The fraudulent claims were submitted through Anderson Optical & Hearing Aids Center, the defendants’ family-owned business that had locations in Arlington and Bedford.
To increase the number of claims they could submit to Blue Cross, the defendants engaged in fraudulent marketing practices. For example, the defendants promised patients a free pair of high-end sunglasses or a free pair of prescription eyeglasses in exchange for taking a free hearing test. At the conclusion of these hearing tests, the defendants told patients that they had slight to mild hearing loss and required them to sign an order for hearing aids in order to receive the free glasses. The defendants promised patients that the hearing aids would be provided to them at no cost and that Anderson Optical & Hearing would waive any applicable copayments, coinsurance, or deductibles. The defendants also offered patients $100 gift cards in exchange for referring family members and coworkers for free hearing tests.
In 2012, the pair brought their fraud scheme into American Airlines’ airport facilities and started offering free hearing tests to aircraft mechanics and fleet services clerks in maintenance hangars and employee breakrooms. Attracted by the offer of free sunglasses, the pair often had long lines of employees waiting to be tested. However, an expert witness who testified for the government explained that the cursory screening tests the defendants performed, which witnesses described as lasting 3-5 minutes, were incapable of producing results upon which a one could make a legitimate decision to dispense hearing aids. Witnesses from Blue Cross testified that these cursory screening tests also failed to comply with Blue Cross’s medical policies related to the evaluation of hearing impairment.
The evidence also showed that, in November 2013, Blue Cross conducted an audit of Anderson Optical & Hearing and requested copies of patient records for certain American Airlines employees and their dependents. On January 6, 2014, the Texas Department of State Health Services-Professional Licensing Unit (Professional Licensing Unit) began an investigation regarding a complaint it had received concerning the Andersons. In February 2014, when given the opportunity to respond to the complaint, the defendants submitted several patient records to the Professional Licensing Unit, including some of the same patient records that had been collected by Blue Cross. The patient records submitted to the Professional Licensing Unit had altered test scores and additional notations that were not present when the same records were submitted to Blue Cross in November 2013.
During the period of the conspiracy, Anderson Optical & Hearing submitted claims to Blue Cross for hearing aids on behalf of American Airlines employees totaling more than $27 million. As a result of these claims, Blue Cross paid Anderson Optical & Hearing more than $16.7 million.
At trial, Terry Anderson took the stand in his own defense. In an attempt to shift the blame on to patients who were more interested in his offer of free sunglasses that they were in hearing aids, he testified, “Well, unfortunately among us are people that will take advantage of perhaps any program, if they have an opportunity to.”
The defendants face a maximum statutory penalty of 10 years in federal prison and a $250,000 fine for the conspiracy count and for each of the substantive health care fraud counts. The aggravated identity theft counts carry a mandatory statutory penalty of two years in federal prison and a fine of up to $250,000.
The superseding indictment includes a forfeiture notice that requires the defendants to forfeit a 300-acre ranch in Bosque County, three vehicles, and more than $3.1 million that was seized from nine financial accounts in December 2015.
The Federal Bureau of Investigation investigated the case. Assistant U.S. Attorneys Douglas Brasher and Rachael Jones prosecuted.