by James C. Sherlock

Louise Lucas, the president pro tempore for the Virginia state senate and a former editor of the Virginian Pilot, said in an interview published Sunday that she doesn’t yet know why federal agents raided her business. We will explore the possibilities.

Senator Lucas is entitled to due process, and there’s a presumption that he is innocent. There are some clear indications of the violations that federal and state prosecutors may be investigating. The author will (see the endnote) outline possible sources of evidence as well as the roles played by federal and state investigators when examining these.

Evidence
Five sources provide information on the potential evidence against Louise Lucas and Lisa Lucas-Burke. Lucas Lodge. The Cannabis outlet.

1. What evidence convinced a federal court to approve search warrants for Lucas Lodge, and The Cannabis Outlet?
2. The FBI hasn’t publicly revealed the target of its investigation of the Cannabis Outlet. However, the New York Times published a report on a Justice Department probe into possible corruption in marijuana dispensaries.
3. Lisa Lucas Burke reported to the Virginian Pilot, that the FBI had seized medical records at Lucas Lodge. (Louise Lucas is the CEO and Lisa Lucas Burke, the Executive Director.) This appears to be a separate probe into concerns regarding the treatment of Medicaid clients at Lucas Lodge or the services rendered to Medicaid or not rendered.
4. Records of Department of Behavioral Health and Disability Services inspections of Lucas Lodge could provide evidence of Medicaid fraud, neglect and abuse of Medicaid patients, or serial citations of noncompliance to regulations.
5. Bacons Rebellion provides an in-depth analysis of DBHDS inspections as well as Sen. Lucas’s activities at the Senate of Virginia.

Federal investigations
Federal investigations may investigate:

1. Lisa Lucas-Burke, Lisa Lucas (CEO) and Louise Lucas (CEO) are suspected of potential Medicaid Fraud. Medicaid pays for all government payments made to Lucas Lodge to provide services to individuals with intellectual and development disabilities. This is the entire business of Lucas Lodge. Federal Medicaid Fraud is investigated by several core statutes. The False Claims Act (3 U.S.C. Health Care Fraud Statute (under 18 U.S.C. SS 1347) and the Anti-Kickback Statute(42 U.S.C. SS 1320a-7b). These laws impose severe civil and criminal sanctions for the submission of false claims, payment for patient referrals and execution schemes to defraud health care programs. Medicaid fraud is investigated on a federal level by HHS OIG, the Office of Inspector General for Health Care. HHS OIG investigators are responsible for assessing DBHDS inspections reports, medical records from Lucas Lodge and other evidence which may have convinced a federal court to issue search warrants. The Virginia Attorney General site provides a good summary of Medicaid fraud, abuse and related investigations, prosecutions and Virginia’s Medicaid Fraud Control Unit. It is important to note that the federal government often includes states in settlements for Medicaid fraud. HHS OIG investigators will lead any federal investigation into Medicaid fraud, and the state MFCU is usually invited to join.
2. Lucas Lodge, Louise Lucas, Lisa Lucas-Burke, and Lisa Lucas (CEO) were found guilty of abuse and neglect against persons with intellectual disabilities and, based on evidence from DBHDS inspection report. Code of Federal Regulations contains federally defined definitions of neglect and abuse. The Developmental Disabilities Assistance and Bill of Rights Act, Section 504 of Rehabilitation Act and the Americans with Disabilities Act are all federal laws that prohibit abuse and neglect of these individuals. HHS OIG investigators would once again lead a federal investigation. State police or Portsmouth Police could join the federal investigation.
3. Louise Lucas or her employees are being investigated for various law violations at The Cannabis Outlet. The sale of cannabis is governed by a number of laws. If true, the report that the raid sought evidence of “bribery” suggests they were looking for evidence involving a public officer. The FBI will lead the investigation. No public information is available on the specifics of the raid or the evidence which led the federal judge to issue the search warrants. State police, Portsmouth Police or both could join the investigation.
4. Louise Lucas, for possible public corruption. Federal statutes include the 18 U.S.C. SS 201 (It differentiates between bribery and illegal gratuities, which are rewards given for already completed acts; 18 U.S.C. SS 666, (Bribery); 18 U.S.C. SSSS 1341, 1343, 1346 (Honest Services fraud). These investigations are conducted by the FBI. Federal laws on public corruption are less lenient than Virginia’s.

Virginia Medicaid fraud investigations

Federal regulations, state Medicaid fraud investigations. State Medicaid agencies, such as the DMAS in Virginia, with assistance from the Attorney General’s MFCU are required to investigate Medicaid fraud.

The findings of an initial investigation may give (State Medicaid agency) reason to believe there has been fraud or abuse in the Medicaid program. In this case, the agency is required to take the appropriate action:

If an agency suspects a provider of fraud or abuse it must —

(1) If the state has a State Medicaid Fraud Control Unit certified under part 1002, subpart C (Virginia is one of these states), the case should be referred to the unit in accordance with its agreement entered into with the unit pursuant to SS 1002.309; or

If there are reasonable grounds to suspect that a Medicaid beneficiary has committed fraud, the agency is required to refer the case to the appropriate law enforcement agency.

If there are grounds to suspect that a Medicaid beneficiary has abused this program, then the agency is required to conduct an investigation into the abuse.

Virginia law: Medicaid fraud investigation. SS 32.1-302. The duties of the Attorney General – the Medical Services Providers Audit and Investigation Unit (MFCU). Gives the Attorney general sweeping powers and a unit that investigates Medicaid fraud, neglect and abuse. Federal law directs this special unit to investigate Medicaid fraud and the neglect and abuse of Medicaid patients.

A. A unit shall be created within the Office of the attorney general to audit and investigate service providers of the State Medical Assistance Plan. The Department of Medical Assistance Services will cooperate with the Office of the Attorney General to conduct such audits and investigate and provide any information requested by the Attorney General, or his authorized representatives.

The Attorney General shall be:

Conduct audits and investigate providers of medical services and other services provided under medical assistance. These investigations will include complaints of abuse or neglect against persons who are in the care of another person who receives payments for providing medical services under the State Plan for Medical Assistance, whether or not the patient is a beneficiary of medical assistance.

The 42 CFR part 1002, subpart C and SS1002.210 govern state investigations. These regulations direct states to implement procedures to exclude Medicaid providers. This Subpart also mandates:

Before imposing an exemption under SS1002.210, State agencies must allow the individual or entity to submit written arguments and documents in opposition. Individuals or entities must be granted any other appeal rights they would have under the procedures set up by the state.

1. Virginia Senate Ethics Committee may investigate possible violations of Virginia’s General Assembly Conflicts of Interest Act and refer findings to Attorney General. The Attorney General is responsible for Enforcement. He may designate a Commonwealth attorney who will have the sole discretion to prosecute any legislator found guilty of violating this chapter. The author assumes, but is not sure, that the state police would conduct any further investigation to support an indictment.
2. The raid at The Cannabis Outlet was linked to bribery. Local and state law enforcement agencies investigate allegations of bribery involving public servants, including the Portsmouth Police Department, and the Virginia State Police, if they are made.
3. State investigations of felonies of neglect or abuse against vulnerable adults. This is a crime involving morals and decency in Virginia. All such allegations and evidence are investigated by local and federal law enforcement agencies including the Portsmouth Police Department, and the Virginia State Police.
4. Portsmouth police would be responsible for state and local investigations, prosecutions, and criminal activity related to The Cannabis Outlet,not bribery.
5. The state would investigate any potential charges that could be brought against Louise Lucas, for operating her business without registering with the State Corporation Commission. This is a Class 1 misdemeanor.

Bottom Line
This article summarizes potential investigations, and evidence that may be pursued. Like Sen. Lucas we are unsure which investigations will be conducted or where the evidence could lead. All parties are innocent unless proven guilty.

Virginians are just like Sen. Lucas and watch and wait.

James Sherlock has been a journalist for more than 10 years, and he is an expert in Medicare fraud, neglect and abuse, as well as the abuse and neglect of people with intellectual and development disabilities. On the basis of these qualifications, he was chosen as a Member of the Governor’s Nursing Home Oversight and Accountability Advisory Board. The author does not practice law and only presents information from public sources.