Co-Winners of May’s Low-Return Fraud Award

We have a tie! Danielle Burroughs and Tim Arthur are co-winners of the Low-Return Fraud Award for the month of May.

On May 30 a federal court ordered Danielle to pay a whopping $2.8 million in restitution for her role in a health care con that according to prosecutors paid her only $191,000. That means she owes about $15 for every dollar she received through her fraud. Tim was ordered to pay $685,000. He gained only $24,000 from the fraud, so he owes over $28 for each dollar received.

Based solely on the restitution amounts, Tim had a strong argument that he should be the sole winner for May. But our panel of experts ruled that Danielle’s 14-month prison term, as against Tim’s mere probation, entitle her to co-winner status.

In 2010 Gary Joiner, director of orthopedics at a SC hospital, formed a company he called Creative Casting Concepts, ostensibly an orthopedic equipment supplier. Creative was an appropriate name because the company existed solely for the purpose of submitting fake bills for nonexistent equipment.

Gary recruited Danielle to identify herself as head of Creative and to manage the bank account and post office box used in the scheme. Gary created false packaging slips and invoices for the nonexistent equipment. When the invoices were paid, he deposited them in the bank account managed by Danielle.

When Gary retired in January 2015, Tim replaced him as director of orthopedics and head of the fraud scheme. The fraud was discovered only five months later. By that time, Creative had submitted fraudulent invoices totaling $2.8 million.

Danielle, Gary, and Tim pleaded guilty to federal mail fraud conspiracy. Gary was ordered to pay $2.8 million and serve two years in prison.

 

The case is US v. Burroughs, Criminal No. 3:16-CR-247-MGL-2 (D. S.C.).

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