Feds: Health fraud defendant sought TSA security waiver
Detroit — A lawyer for the federal government told a judge Wednesday that a local health care executive charged with defrauding Medicare out of $132 million through “sham” medical businesses recently applied for a travel program that essentially allows fliers to skip traditional pre-travel security checks.
“There is no dispute there that the defendant has the means to flee,” Jacob Foster, an attorney with the Department of Justice, told chief U.S. District Judge Denise Page Hood during the continuation of a bond hearing for Mashiyat Rashid.
Foster added that Rashid has enough money at his disposal “to allow the defendant to live comfortably abroad.”
Hood is expected to decide whether Rashid, 37, the alleged mastermind behind an alleged $132 million health care fraud scheme, should be released while awaiting trial later this month on a 10-count criminal indictment. The government is fighting his release.
Hood heard arguments Wednesday morning from Foster and defense attorney, Walter Piszczatowski, on whether to grant Rashid bond.
Hood scheduled another hearing for 10 a.m. Friday after Foster told her that Rashid had applied to the Trusted Traveler program for himself and three others. The program helps travelers speed through Transportation Security Administration lines.
The judge said she needed more time to review the case. Rashid’s attorney told Hood that his client applied for the program in June with plans of family trips to Los Angeles and Houston.
The trip to Los Angeles was to attend the “white coat” medical school ceremony of one of Rashid’s relatives, Piszczatowski said. Hood said even if she released Rashid on bond, she would not allow him to travel to California.
Piszczatowski argued that his client needs to be released so he can help with his legal defense.
“There are no facts of this defendant preparing to leave the country. No facts,” Piszczatowski said Wednesday. “He gave them the passport. They have his iPhone. There are no texts (that indicate he plans to leave). There is no transfer of any assets to any foreign bank.”
Prosecutors oppose releasing Rashid on bond, saying he has access to huge sums of cash and could flee the country.
Prosecutors say an informant has told them Rashid has access to a jet to get him out of the country. Foster argued Tuesday before Hood that Rashid has ties to his native Bangladesh, where his wife’s parents still live.
Piszczatowski said Tuesday his client does not have access to cash because the federal government confiscated it following Rashid’s arrest July 12.
Piszczatowski also said Rashid’s ties to the United States, where he emigrated at the age of 3, are very strong, pointing out that Rashid grew up in Detroit and graduated from the University of Michigan in 2003.
The government alleges that Rashid withdrew $500,000 from his bank account and stuffed the cash in a duffel bag. Federal agents who had him under investigation allegedly watched Rashid walk out of the bank with the money.
Piszczatowski said in his earlier arguments before Hood that Rashid was going to use the money for “extras” that were being added to a nearly $7 million home he is constructing in Franklin. He said the medical executive also wanted to have cash on hand for trips with his family and for unexpected expenses.
“You gotta have cash in case Trump decides to push the button,” Piszczatowski said Tuesday in court. The defense attorney added that the $500,000 “is fully legal” and that Rashid pays taxes on it.
“He’s an open book,” said Piszczatowski. “They did an investigation and he has it all on paper.”
But Foster said Tuesday that Rashid’s criminal case is “uniquely troubling,” adding that people who aren’t considering fleeing don’t stuff a duffel bag with $500,000.
Foster said most of the $132 million Rashid allegedly cheated the government out of through Medicare cannot be found.
“It’s so extensive that it can’t be accounted for,” said Foster. “Why did he do it? He spent it on himself.”
Federal authorities call the alleged scheme one of the biggest in Metro Detroit history, involving medical companies such as Tri-County Physicians and National Laboratories, which were raided by the FBI last month in the Fisher Building.
Federal prosecutors allege that Rashid led a medical conspiracy that involved submitting bogus bills to Medicare and giving unnecessary back injections to addicts and prescribing them pain medication that ultimately were sold on the streets of Metro Detroit.
Rashid faces up to life in federal prison if he is convicted of the charges, which include health fraud conspiracy, money laundering and receiving kickbacks.
Robert Snell contributed.