Compulsive Gambler Gets Prison Term Over $2.8m Medicaid Fraud Scheme

  • Katrina Lynch got a 50-month prison sentence for defrauding the Virginia Medicaid Program
  • She spent over $47,000 at casinos and partially blamed her actions on her gambling addiction
  • The scheme ran between 2011 and 2018 through her Medicaid service facilitation company
  • She kept on with her fraudulent practices despite her business being subjected to two audits
female hands in handcuffs
Katrina Lynch must serve a 50-month jail term after defrauding the Virginia Medicaid Program out of $2.8m and spending part of the money at casinos. [Image: Shutterstock.com]

Fueling a gambling habit

A woman has received a 50-month prison sentence for defrauding the Virginia Medicaid Program out of $2.8m, partially blaming her actions on a gambling addiction.

used up more than $47,000 at casinos

The fraudulent scheme took place over more than six years and saw Katrina Lynch, 39, spend large portions of the stolen money on gambling, foreign trips, and at luxury retail stores. She used up more than $47,000 at casinos such as Harrah’s in New Orleans and the Bellagio in Las Vegas.

Lynch received her prison sentence on Monday in the Eastern District of Virginia after pleading guilty to a single count of healthcare fraud in July 2020. The maximum penalty the Texas native had been facing was up to 20 years in prison.

Casinos a form of escape

Lynch’s lawyer, Valencia Roberts, had been seeking a one-year prison sentence followed by a year of home confinement, in view of her client lacking a prior criminal record, her compulsive gambling habit, and having to support two children.

Roberts also spoke about the stress that her client was under at the time of the scheme. Lynch had been caring for her mother, dealing with her own health problems, and running her own business. The lawyer maintained:

The casinos became Ms. Lynch’s means of escape.”

The scheme was running through Lynch’s Midlothian-based company, A Tender Heart LLC. The business was a part of the Virginia Medicaid Program, acting as a service facilitator. This meant that A Tender Heart was supposed to make sure that the recipients of Medicaid got the services that they needed.

Medicaid is a program in the United States that provides funds to low-income people to pay for medical care that they would not be able to afford otherwise.

Between 2011 and 2018, Lynch was regularly submitting bills to Medicaid for services that she had not actually provided through her company. She received payment for services reportedly aimed at people who had died, been hospitalized, or transferred to different service facilitators.

In this manner, Lynch received at least $2,816,633 from Medicaid that she was not supposed to.

Cracking down on fraudulent behavior

It took some time to uncover the true extent of Lynch’s fraudulent scheme. During two audits into her company’s operations, she received warnings about her billing practices. This led to a request that she pay back more than $335,000 to the Virginia Medicaid Program. Lynch kept on with her scheme despite the audits.

Speaking about the case, Virginia Attorney General Mark R. Herring said: “We must hold fraudulent healthcare providers accountable, not only because they are stealing from our healthcare system but they are also stealing from Virginia taxpayers in the process.” He thanked the Medicaid Fraud Control Unit in particular for its work on the case.