The Franklin Chronicle


A LOCALLY OWNED NEWSPAPER


7 January 2000 Page 7


 Indictments from Page 1
were used by tne insurance company to calculate the per-visit reim-
bursement rate paid to Wellsprings for home health care visits.
From January 1993 until the end of 1995, Wellsprings received about
$12 million in reimbursements. This figure accounted for more than
90 per cent ofWellsprings' annual revenue. Consequently, Wellsprings
was then informed that it would no longer receive Medicare funds
due to other matters. Wellsprings filed for voluntary bankruptcy.On
cost reports submitted to Medicare for reimbursement, Wellsprings
was required to declare whether or not it conducted business trans-
actions with companies to whom it was "related.
Under Medicare regulations, a party was "related" when the home
health care agency, or its principals, to a significant extent either
owned or operated the company furnishing the supplies or services.
Generally, according to the indictment, Medicare would reimburse
the home health care agency that did business with a "related" party
ONLY the reasonable costs, not to include profit, of the supplies or
services to the "related" company. Wellsprings submitted to HHS,
through Aetna, cost reports under the Medicare program, filing them
annually, These reports listed costs incurred for direct patient care
and overhead expenses that Wellsprings claimed were reimbursable
through the Medicare program. The indictment accuses the defen-
dants of submitting false, fictitious and fraudulent claims. Moreover,
the U. S. government alleges, the cost reports filed by Wellsprings
failed to disclose all of the "related" parties from which Wellsprings
obtained services and supplies.
Thomas V. Novak assisted in the preparation of the Wellsprings costs
reports, acted in the position of accountant or bookkeeper for Well-
springs, and prepared tax returns for Wellsprings, Island View En-
terprises, Inc. (Island View), MC Magic Maintenance, Inc. (MC Magic),
Brenda M. Molsbee, her husband Richard Molsbee, Maxie G. Carroll,
and her husband, Willie Fred Carroll, among others. Island View was
incorporated in the State of Florida in July 1990 by defendants Molsbee
and Carroll, who listed themselves as the sole members of the board
of directors. In November 1991, defendant Molsbee, using the name
Brenda M. Hicks, filed corporate reinstatement documents for Island
View with the Secretary of State for Florida listing Brenda M. Hicks
as president and the defendant Carroll as vice'president. In July 1992.
defendant Molsbee filed corporate annual report documents with the
Secretary of State for Florida listing Brenda M. Molsbee as president
and defendant Carroll as vice-president.
MC Magic was incorporated in Florida in July 1993 with the same
officers, defendants Molsbee as president and Carroll as vice-president.
During the time embraced by the indictment (January 1993 to De-
cember 1995) Willie Fred Carroll, husband of defendant Carroll, was
allegedly employed by and received payments from Wellsprings, MC
Magic and Island View. The same charge was made involving Richard
Molsbee, husband of defendant Molsbee;

The Conspiracy
The U. S. Government charged that the three defendants, aided and
abetted by each other and others, did knowingly and willfully com-
bine, conspire and agree together and with each other to (1) make
materially false, fictitious and fraudulent statements and represen-
tations, knowing that the false, fictitious and fraudulent statements
and representations were to be used by HHS (Health and Human
Services) in its operation supervision and administration of the Medi-
care program; (2) to make and use false writings and documents know-
ing that these contained false statements and entries to be used by
HHS; (3) to defraud the United States for the purpose of impeding,
impairing, obstructing and defeating the lawful government functions
of the Internal Revenue Service (IRS) in the ascertainment, computa-
tion, assessment and collection of income taxes; (4) to devise a scheme
to defraud and obtain money from the U.S. and HHS by false and
fraudulent pretense and representations, and for the purpose of ex-
ecuting such scheme and artifice, caused matters and things to be
delivered by the Postal Service in violation of federal law; and (5) to
devise a scheme to defraud and obtain money from the U. S. and
HHS and, for the purpose of executing such scheme, caused to be
transmitted in interstate commerce, by means of wire communica-
tion, certain writings, signs, signals' and pictures in violation of fed-
eral law.
Specifically,- the government charges the defendants, in conspiracy,
submitted fraudulent cost reports to obtain reimbursement from
Medicare by including alleged improper charges for fraudulent (a)


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accounting expenses, (b) travel reimbursement expenses, (c) salary
expenses, (d) inflated rental expenses, (e) inflated computer expenses
and (f) maintenance expenses. The government also alleged that the
defendants furthered the conspiracy failed to disclose to Aetna and
Medicare that Island View and MC Magic were "related" companies
owned and controlled by officers, owners and employees of Wellsprings.
The defendants also submitted false corporate tax returns for MC
Magic, income for services that were never rendered and deductions
for expenses that were never incurred. Monies were paid to MC Magic
by Wellsprings for work allegedly performed by MC Magic as reflected
in Wellsprings cost reports submitted by the defendants to Aetna.
These funds were then diverted from MC Magic to the defendants
through payments made in the names of their husbands. The gov-
ernment, finally, alleges that in furtherance of the conspiracy, the
defendants concealed their roles and participation in the conspiracy
in order to avoid detection of the fraudulent scheme.
A portion of the indictment alleges specific overt acts in carrying out
the conspiracy, as charged, listing the specific cost reports and time
periods covered by the reports. For example, defendants Molsbee and
Carroll purchased in the name of Wellsprings two 1994 Lincoln Town
Car automobiles, including principal and interest payments claimed
in the 1994 and 1995 cost reports. In the 1994 cost report mainte
nance expenses for MC Magic were $165,500. In 1995, these mainte-
nance expenses were billed as $96,000. From January 1994 through
December of that same year, checks from the Wellsprings bank ac-
count totaled about $210,000 made payable to Richard Molsbee and
Willie Fred Carroll, husbands of the defendants. Additional payments
were similarly made to the same parties from the bank accounts of
MC Magic and Island View. From May 1994 through September 1995,
the indictment alleged, the defendants caused Aetna to make inter-
state electronic funds transfers to the Wellsprings bank account to-
taling about $6,485,000.
In November 1995, using the name Anita Molsbee, at bankruptcy
proceedings for Wellsprings, the defendant was charged with "...know-
ingly and fraudulently [making] materially false statements under
oath which were made under penalty of perjury pertaining to the
ownership of Island View Enterprises." The defendant was asked the
following:
 Question: What is Island View Enterprises?
 Answer: That's the people we rent from.
 Question: And who are the principals or owners of that
 entity?
 Answer: Larry Millender.
 Question: He owns that property?
 Answer: Yes sir.
 Question: That's in Carrabelle?
 Answer: Uh ... Apalachicola, Carrabelle, Wakulla and
 Perry.
These statements made by the defendant, as she then well knew and
believed, were false in that the defendant had an ownership interest
in Island View Enterprises and was an officer of Island View Enter-
prises.
Federal attorney P. Michael Patterson of the Northern District of Florida
stated that defendant Molsbee, if convicted, faces a possible sentence
of up to 22 years' incarceration. Defendant Carroll face's a possible
14 years' incarceration, and Novak faces a possible five years sen-
tence if convicted.
Patterson acknowledged and commended the cooperative efforts of
the Special Agents of the FBI, IRS, Florida Dept. of Law Enforcement
and the State of Florida Office of Attorney General, and the Medicaid
Fraud Control Unit.


Boyd Announces COPS Grant For

Apalachicola

 SCongressman Allen Boyd (D-
 North Florida) annoiiiuced o6'De-
 cember 15, 1999, that the Depart-
 Sment of Justice has awarded a
 Community Orierted Policing
 Services (COPS) grant to the City
 of Apalachicola.
 The Department will receive an
 estimated $122,557 under the
 COPS Universal Hiring Program
 (UHP), which allows law enforce-
 ment agencies to help pay for the
 salary and benefits of newly hired
AL sworn officers. Withthis funding,
PAL rApalachicola will be able to hire
 one new full-time and one new
 part-time officer. UHP grants are
J to providing made for up to 75 percent of the
 total salary and benefits of each
J kindness, officer over three years-up to a
 maximum of $75,000 per officer.
 The COPS program was created
 by the Department of Justice af-
 ter President Clinton's 1994 State
active surgery, of the Union pledge to put
 100,000 additional police officers
gy services, and sheriff's deputies on
 America's neighborhood streets.
 The program's goal is not only to
 create additional police positions,
)pen 24 hours, but also to promote community
 policing strategies. These strate-
 gies address the causes and re-
 duce the fear of crime and social
ital disorder through problem-solving
 tactics and community-police
Avenue G) partnerships. Many law enforce-
Avel G) ment officers and criminal justice
 83 experts have credited community
3853 policing with contributing to the
 decrease in crime rates nation-
 wide.
%S Boyd said, 'Today we witness the
IV federal government providing
 positive assistance to our commu-
 nities that will make our neigh-
Medical Center -East borhoods safer. These COPS
 grants will combat crime and at
02 S.E, Avenue B the same time bring needed jobs
nd Harry's Georgian to our region."
 Restaurant) Associate of
belle 850-697-2223
 Science Degree
Iton, Physician Assistant In Aquaculture

.n Monday Friday Now Available
0 a.m. 5:00 p.m.
Wednesday Hillsborough Community College
 (HCC) recently graduated the first
Sam. 12:00 p.m. four students in Florida history
 with an Associate of Science de-
 gree in Aquaculture.
 Darlene Haverkamp, the first
 aquaculture student to graduate
 with Honors, worked briefly this
 past summer for the University of
 Florida's Dr. Roy Yanong on the
 Cichlid Project.

 For more
 information about HCC's AS De-
 gree Program, contact:
 Dr. Bill Falls at 813/253-7881.
 From Waterworks (Volume 3,
dicaid/Medicare Number 2, 1999.)
urgency, dial 911.


Water Company & St. George Bridge from Page 1
 A: I'm not sure. I guess that's what this lawsuit is about. We're
 not-I would say this. as far as the difference between Leisure
 and St. George Utility and Water Management. I am not taking
 the position that because those are different entities, that it's
 not binding.
 In other words, if it was binding on Leisure in some final judicial
 determination, then I think it would be binding on the water
 management. We are not trying to say it's different or too far
 removed to be binding.
 Q: So Water Management Services. Inc.. is not going to take the
 position that because the name of the owner is different today
 than back in 1974. that Water Management Services. Inc.. is
 somehow excused from the legal obligations-
 A: No. that's-
 Q: -set forth in the utility permit?
 A: No. sir, that's not our position. It's just a question of whether
 the statute trumps the permit. I guess, or the constitution as
 the complaint spells out.
 In my view. the permit is irrelevant and immaterial to the cen-
 tral constitutional and legal question regarding the statute.
 Ownership
 Q: Could you please explain how Leisure. St. George Island Util-
 ity and Water Management relate to one another?
 A: Okay. The original waterline was constructed by Leisure Prop-
 erties. Ltd.. and its contractors. And back then. this corporate
 general partner of which I was president. and John Stocks were
 the two general partners of Leisure.
 Subsequent to that, in late '79. the water system was syndi-
 cated into a partnership known as St. George Island Utility Com-
 pany, Ltd.. a Florida limited partnership.
 And under that new partnership. Leisure Properties as general
 partner owned 10 percent of the stock and various and sundry
 investors owned the remaining stock.
 And that partnership has continued and did continue until 1997.
 when there was a reorganization done under which the utility
 company's assets were transferred to a new Florida corpora-
 tion, Water Management Services. Inc., and all of the stock in
 that corporation was issued to St. George Island Utility Com-
 pany, Ltd., in return for a transfer of all the assets.
 Q: And does Leisure Properties. Ltd., have a relationship to Water
 Management Services, Inc.?
 A: Leisure Properties is still the general partner of St. George
 Island Utility Company, Ltd., which has an ownership relation-
 ship. It's the controlling owner, the majority owner of the stock.
 So it has ultimate control as the shareholder.
 9: What is your relationship to each of those entities today?
 A: I am president of the two corporate general partners of Lei-
 sure Properties, Ltd., which is the general partners of St. George
 Island Utility Company, Ltd., I don't have any ownership inter-
 est in either Leisure or St. George Island Utility Company. Ltd.
 I'm also president and director of Water Management Services.
 Inc., which effectively manages the utility company.
 9: Other than applying for and obtaining the utility permit, did
 the FDOT require anything else of Leisure Properties. Ltd., as a
 requirement to installing the waterline on the Bryant Patton
 Bridge?
 A: I feel sure there were other requirements, but I don't remem-
 ber anything about it. I didn't really negotiate with DOT. I think
 Clayton Anderson or somebody else did that. I might have talked
 to, Mr. Roddenberry. I remember that name, but I just have no
 recollection of that at this point.
 Q: Does Water Management Services, Inc., currently own the
 waterline installed on the Bryant Patton Bridge?
 A: Yes.
 9: And does Water Management Services. Inc., maintain the
 waterline installed on the Bryant Patton Bridge?
 A: Yes.


 S"Way Of Necessity"
 9: Is it true that the way of nece ts l 'the statutory way bf ne-
 cessity being sought by Water Management Services. Inc., will
 ultimately benefit commercial uses on St. George Island?
 A: Assuming we are successful, it will benefit commercial uses
 as well in the sense that if the state has to pay for the waterline,
 then the cost will not be passed along to all the rate payers
 which would include some commercial businesses.
 Q: Is it correct that Water Management Services. Inc., is aware
 that the FDOT intends to replace the Bryant Patton Bridge with
 a new bridge?
 A: Yes.
 9: I would like to show you Exhibit 2 to this deposition and ask
 whether or not Water Management Services, Inc.. has received a
 copy of Exhibit 2?
 A: Yes. We received this.
 Julius Parker, Attorney For Gene Brown and WMS: Could
 you identify that for the record?
 A: It's a letter to me and Water Management Services from Hal
 Gore, Jr., who is the District III DOT engineer dated November
 12, 1999.
 By Mr. Berger:
 Q: I would like to show you Exhibit 3 to this deposition which is
 a return receipt card. Who is Bob Mitchell?
 A: He is an accountant in the office of Water Management Ser-
 vices.
 9: Is Exhibit 2 a, true copy of the letter DOT sent Water Manage-
 ment Services, Inc., on November 12. 1999?
 Continued on Page 9


 CLAIM OF LIENNOTICE
Per Florida Statutes 713.78 (3) (b) File No.
Date ol this Notice 12/30/99 Invoice No. 5773
Description orVehicle: Make Oldsmobile Model Royale color White
Tag No Year 1984 State FL__ V No. 1G3AN69Y7E9749205
To Owner: Melissa Winfield To Lien Holder: MM Motors
 67 Avenue J P.O. Box 938
 Apalachicola, FL 32320 Carrabelle, FL 32322


You and each of you are hereby notified that the above vehicle was towed on
 10/28/99 at the request of APD/FCSO that said vehicle is in its
possession at the address noted below. They the undersigned claim a lien for
towing, storage and cost. The vehicle will be sold after 35 days for the date of
impound free of prior liens. Payment by the above date of notice in the amount
$ 186.00 plus storage charges occurring at the rate of $ 15.00 from
the date hereof will be sufficient to redeem the vehicle from the lien of the
lienor; that subsection (4) of Florida Statute 713.78.

 NOTICE OF FORECLOSURE OF LIEN AND OF INTENT TO SELL
 VEHICLE PURSUANT


 To subsection (5) of Florida Statute 713.78
You and each of you are hereby notified that on 01/27/00 at 12:00
o'clock, the vehicle described above will be sold at public auction
at: 461 HWY 98 EASTPOINT, FL From the proceeds will first paid all
towing and storage charges plus all costs including cost for this sale. Any excess
will be deposited with the Clerk of the Circuit Court.
You and each of you are urged to make satisfactory arrangements to pay all
charges and take possession of the said vehicle. In order to obtain a release of the
vehicle you must present personal identification, driver's license and PROOF
OF OWNERSHIP. (title, registration, etc.) at the address below and pay the
charges.
 SHADE TREE TOWING
 P.O. Box 971
 Eastpoint, FL 32328
 (850) 670-8219


A Ilu JLII