Date: April 20, 2023 Contact: newsroom@ci.irs.gov Five individuals, including two certified nurse midwives, one licensed practical nurse and two health care business owners, have been charged for their participation in separate schemes that fraudulently distributed more than 2,600 fake COVID-19 vaccination records cards and defrauded the Paycheck Protection Program and Economic Injury Disaster Loan Program of more than $1.7 million. The charges filed in federal court in Brooklyn, New York, are part of a nationwide COVID-19 enforcement action led by the Criminal Division's Fraud Section, which resulted in criminal charges against 18 individuals for their alleged participation in health care fraud schemes involving approximately $490 million in fraudulent claims. The charges were announced by Breon Peace, United States Attorney for the Eastern District of New York; Kenneth A. Polite, Jr., Assistant Attorney General of the Justice Department's Criminal Division; Thomas M. Fattorusso, Acting Special Agent-in-Charge, Internal Revenue Service-Criminal Investigation, New York (IRS-CI); Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI). "The defendants in these cases used the COVID-19 pandemic as an opportunity to engage in fraud, including faking vaccine cards and stealing vital funds designed to keep struggling businesses afloat," stated United States Attorney Peace. "My Office remains committed to combating the opportunistic fraud that occurred in connection with the pandemic." Mr. Peace thanked the New York State Department of Health for their assistance with the case. The results of the nationwide enforcement action were announced today by Assistant Attorney General Polite. "Today's announcement marks the largest-ever coordinated law enforcement action in the United States targeting health care fraud schemes that exploit the COVID-19 pandemic," said Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department's Criminal Division. "The Criminal Division's Health Care Fraud Unit and our partners are committed to rooting out pandemic-related fraud and holding accountable anyone seeking to profit from a public health emergency." "Since the start of the pandemic, we have seen the aid for businesses and individuals stolen through fraud and deceit. Fraudsters have lined their pockets and built real estate empires through illicit gains, showing no regard for those who truly need the funds. IRS Criminal Investigation and our investigative partners stay committed to targeting the criminals taking advantage of COVID relief benefits to see that the only pockets they line are those of a prison jumper," said Thomas M. Fattorusso, Special Agent in Charge of IRS-CI New York. Schemes charged in the Eastern District of New York, detailed in two indictments and one criminal information, include the following: United States v. Kathleen Breault and Kelly McDermott The indictment charges certified nurse midwives Kathleen Breault and Kelly McDermott with conspiracy to defraud the United States. The indictment alleges that McDermott, who owns Sage-Femme Midwifery PLLC, a midwife clinic in Albany, New York, and Breault, who worked at Sage-Femme, conspired to enroll Sage-Femme as an authorized COVID-19 vaccine administration site and to provide COVID-19 vaccination record cards to individuals who were not vaccinated, including minors who were not at the time eligible to be vaccinated and non-United States citizens who were not present in the United States when they were purportedly vaccinated. The defendants allegedly destroyed vials of COVID-19 vaccines that were intended to be used to vaccinate patients. Even though Sage-Femme was a small midwife practice, the defendants' fraud turned it into one of the busiest vaccination sites in New York State, outpacing large, state-run vaccination sites. United States v. Sherilyn Pellitteri The information charges Sherilyn Pellitteri, a licensed practical nurse, with conspiracy to defraud the United States. The information alleges that Pellitteri, an employee of Sage-Femme Midwifery PLLC, a midwife clinic in Albany, New York, conspired to enroll Sage-Femme as an authorized COVID-19 vaccine administration site and to provide COVID-19 vaccination record cards to individuals who were not vaccinated, including minors who were not at the time eligible to be vaccinated and non-United States citizens who were not present in the United States when they were purportedly vaccinated. The defendant allegedly destroyed vials of COVID-19 vaccines that were intended to be used to vaccinate patients. Even though Sage-Femme was a small midwife practice, the defendant's fraud turned it into one of the busiest vaccination sites in New York State, outpacing large, state-run vaccination sites. United States v. Kate Spencer and Ziv Biton The indictment charges Kate Spencer and Ziv Biton with conspiracy to commit wire fraud and bank fraud, money laundering conspiracy and money laundering. The indictment alleges that Spencer and Biton caused the submission of numerous fraudulent loan applications to the Paycheck Protection Program and the Economic Injury Disaster Loan Program on behalf of purported health care businesses, among others. The applications contained false statements and included falsified documents regarding the purported businesses and the intended use of the loan funds, resulting in the distribution of over $1.7 million in fraudulent loans. The funds were allegedly used for personal expenses, such as purchases of residential properties. The cases are being prosecuted by Trial Attorneys Patrick J. Campbell and Andrew Estes of the Criminal Division's Fraud Section. The charges are allegations and the defendants are presumed innocent unless and until proven guilty.
