Illinois OK’d contract despite fraud

SPRINGFIELD — Illinois Department of Human Services officials approved $1.7 million in payments to a transportation business despite the company’s conviction for fraudulently billing the state’s Medicaid program for $400,000, an investigation released Tuesday found.

Executive Inspector General Ricardo Meza reported that administrators in the agency’s Division of Mental Health, including Director Lorrie Rickman-Jones, knew the state had blacklisted Downstate Transportation Services Inc. two years before its 2008 conviction but still did business with it for two more years.

Downstate transported patients to DHS psychiatric facilities but the state’s provider of Medicaid health services for the poor found it billed for miles it drove without patients.

As a result, the Department of Healthcare and Family Services took away Downstate’s Medicaid certification — a requirement for the work — in March 2006. Downstate and its owner, Richard Wallace, were indicted on federal health care and mail fraud charges in July that year and both were convicted in February 2007. Wallace was sentenced to three years in prison.

But DHS awarded Downstate $825,450 for the 2007 fiscal year and $935,000 in 2008.

Another employee implicated, mental health division chief of staff Robert Vyverberg, responded to the investigative report that DHS sought another company after learning of the Downstate’s Medicaid decertification but could not find any.

He said Downstate “provided those services with a consistently high level of quality and without incident or injury,” but didn’t mention the fraudulent activity.

In addition to Vyverberg and Rickman-Jones, who’s married to former state Senate President Emil Jones, D-Chicago, legislative and legal liaison Patrick Knepler and regional executive director Jordan Litvak were named in the report.

Requests for comment from the four employees made through Human Services spokeswoman Januari Smith were not immediately answered. Smith did not have an immediate statement on the findings.

Human Services Secretary Michelle Saddler told the inspector general that Vyverberg and Litvak were counseled and reprimanded in writing. Rickman-Jones and Knepler were counseled. The inspector general had recommended just counseling for Rickman-Jones and Vyverberg and unspecified “discipline” for the other two.

Saddler also reported that DHS now requires employees to check whether contract bidders are on a list of prohibited vendors and has taken other steps to prevent a repeat of the situation. A spokeswoman did not immediately have additional comment.

A phone number for Downstate Transportation in Carterville is disconnected.