The Issue The issues in this case concern the question of whether Petitioner is entitled to be registered as an associated person with Integrated Resources Equity Corporation pursuant to applicable provisions within Chapter 517, Florida statutes and Chapter 3E-600, Florida Administrative Code.
Findings Of Fact Petitioner in attempting to gain employment with Integrated Resources Equity Corporation as an associated person was required to be licensed by Respondent. In working for that company he hoped to be registered in Florida, Georgia and Virginia. His prospective employer submitted his application on September 28, 1988. The nature of the application process as it took place on September 28, 1988, was that Integrated Resources Equity Corporation in behalf of Petitioner, filed the application with the National Association of Securities Dealers (NASD). There was no direct filing with the State of Florida at that point. Respondent became aware of pendency of this application following approval by NASD. This knowledge of the circumstance was by a computer transmission through the Central Registration Depository (CRD). The approval date by NASD was October 11, 1988, and on that date Respondent was made aware of Petitioner's application for registration as an associated person in the State of Florida. On October 25, 1988, Respondent requested additional information from the sponsoring employer, Integrated Resources Equity Corporation, concerning Petitioner. A copy of this correspondence may be found as Respondent's exhibit No. 1 admitted it into evidence. In pertinent part it states: In order for the application to be deemed complete, it will be necessary to provide this office with a copy of the complete Form U-4 as amended, and all documents pertaining to disciplinary matters. Documentation submitted must be certified by the issuer of such documents. Additionally, explain the status of each pending action, and for each final action summarized the disposition. Pursuant to Rule 3E-301.002(3), Florida Administrative Code, additional information shall be submitted within sixty (60) days after a request has been made by the Department. Failure to provide all the information may result in the application being denied. In accordance with Section 120.60, Florida Statutes, and Rule 3E-301.004, Florida Administrative Code, the application for licensing shall be approved or denied within (90) ninety days of receipt of this timely requested additional information. The key items within the October 25, 1988 correspondence were the need for a completed Form U-4, as amended, and documents pertaining to disciplinary matters with the statement that the documentation be certified by the issuer, meaning the agency that took the action of discipline. Further, it was necessary to explain the status of any pending action related to discipline and to summarize the disposition for each disciplinary action that had been concluded. This letter warned the applicant that the additional information needed to be submitted within (60) sixty days and that the failure to provide it might result in the application being denied. The paragraph subsequent to that statement informed the applicant that a decision would be reached within (90) ninety days of receipt of the requested additional information. Certain information was submitted by Integrated Resources Equity Corporation in response to the request for additional information. One of those items is under the cover letter of Roger Pacheco, Compliance Assistant, Compliance Department, Integrated Resources Equity Corporation. This is by correspondence of November 2, 1988, received by the Respondent on November 3, 1988. In this correspondence particular emphasis is placed upon a disclosure by the Petitioner concerning the employment with Barnett Bank and his dealings with a client. That client was John F. Shaw. The correspondence of Mr. Pacheco indicated the enclosure of the Form U-4 attachment with the letter of explanation from Petitioner and a letter from Mr. Shaw. It was stated in Mr. Pacheco's correspondence that he was hopeful that the provision of that information would clarify disclosures in the Form U-4 under the headings 22 H.(1) and 22 N.(2). The letter went on to describe how the Petitioner and his managing executive, a Mr. James Howard, expressed their apologies for any oversight concerning the Shaw matter. The Pacheco letter indicated that he believed that all supporting documentation had been forwarded to the NASD's CRD system. Mrs. Pacheco invited the Respondent to contact him if further information was needed. The attachments to the correspondence of November 2, 1988, from Mr. Pacheco were consisted of the Form U-4, a fingerprint sheet for the Petitioner, correspondence of September 13, 1988, from James A. Howard to John F. Shaw asking for Mr. Shaw to relate his recollection of the transaction between Mr. Shaw and the Petitioner, the letter of September 13, 1988, from Mr. Shaw and information dated September 15, 1988, bearing a signature of Petitioner, following a series of explanations to questions 22H.(1) and 22N.(2) Within the Form U-4 was also an item 22A.(3) in which it was stated, "In October, 1971, I plead guilty to a charge of possession of marijuana. I was given a one-year probation which was dully served. I was then informed by the court that said sentence was served and that I would not be subject to any discriminatory practices in connection with this matter." Contrary to the request of October 25, 1988, no supporting documentation certified by the criminal justice system in which the marijuana case had been considered was offered by the Pacheco correspondence of November 2, 1988, and its attachments. Notwithstanding the overture of Mr. Pacheco to provide additional information if requested, which theoretically could include the necessary certified documentation from that criminal justice system, it was not incumbent upon the Respondent to make a further request beyond the October 25, 1988 letter when it gave clear instructions to Integrated Resource Equity Corporation concerning the need for submission of certified documents pertaining to the marijuana case. Petitioner's exhibit No. 1 admitted into evidence is the Pacheco letter and its attachments. On November 7, 1988, Lisa A. Mahon, Assistant Manager, Broker/Dealer and Registration Services, Integrated Resources Equity Corporation wrote to the Respondent. This correspondence, as was the case with the correspondence of Roger Pacheco, was written to Mr. Wharton Smith, Securities Analysts/Examiner with Respondent. This correspondence of Ms. Mahon was in response to the October 25, 1988 letter of the Respondent and enclosed the Form U-4 which was the same Form U-4 text as had been provided by Mr. Pacheco on November 2, 1988. The letter of November 7, 1988 and its attachments may be found as Petitioner's exhibit No. 3 admitted into evidence. The Mahon correspondence was received by the Respondent on November 8, 1988. It indicated that from the point of the Integrated Resources Equity Corporation, no other documents or disciplinary history were available and stated that if further information was needed that Mr. Smith should not hesitate to contact her. Again, the statement that no other documents on disciplinary history are available and that the Respondent might take it upon itself to request further information beyond its instructions of October 25, 1988, concerning the disciplinary history of Petitioner, to include the criminal law marijuana case, does not place the onus on Respondent to do anything further. Petitioner was still obligated to provide necessary documentation by certification of the criminal law case. He has yet to do that. Petitioner had been registered in Florida with Dean Witter, Stuart James, and E. F. Hutton following the 1971 marijuana case. However, Respondent in view of problems of the securities industry, has changed it's standards for registering applicants and there are instances where people are being denied in contemporary times that would have been approved in the past without any change in the disciplinary history, from past to present, based upon the fact that disciplinary history was not reviewed and considered in approving the application in the past. On December 7, 1988, Respondent received the Form U-5 from Barnett Bank concerning the Petitioner's dismissal related to the Shaw matter. Although the marijuana case in terms of necessary certified documentation from the criminal law system had not been spoken to in the application process by information provided by the Petitioner or his sponsoring employer and as such the application was incomplete and subject to denial, Respondent chose instead to examine the Shaw matter and having reviewed the details of that situation used that circumstance as the reason to deny the application. The Notice of Denial was sent out on March 8, 1989. A copy may be found as Petitioners exhibit No. 2 admitted into evidence. It constitutes the total explanation of Respondent's reason for denial of the Request for Registration. In his application, which bears the signature of Donald J. Pilinko both in the Form U-4 and the detailed explanation with signature of Donald J. Pilinko, both of which are found in Petitioners exhibit No. 1, the Shaw matter is described as a situation in which Mr. Shaw issued a check in Petitioner's name rather than in the name of Barnett Bond Service. Petitioner states in these documents that he had requested Mr. Shaw to do the latter. This check in the amount of $3,180.00 was reportedly to contend with the possible difference in the price of the sell proceeds and the buy order's net amount due in the sell of 318 units of Unit Investment Trust (UITs). The documents go on to describe how Petitioner, rather than leaving the check overnight in an unsecured area, deposited the check. It was placed in Petitioner's checking account with the intention of returning the funds to the client, according to Petitioner. The documents in Petitioner's application describe how he realized that a mistake was made in depositing the Shaw check into his personal account. The letter within the Petitioner's exhibit No. 1 attributable to John Shaw does not describe why Mr. Shaw wrote the check to the Petitioner instead of Barnett Bond Service. In investigating the Shaw transaction, Leigh Somers, Vice President, Barnett Banks Incorporated, interviewed Petitioner. In the course of this interview Petitioner told Somers that he had taken the check in the amount of $3,180.00 from Mr. Shaw and that he had instructed Mr. Shaw to make the check payable to him. This is in stark contrast to the matters set forth in the application attributable to Petitioner. The remarks made to Mr. Somers are more credible in view of the other evidence presented. It is found that Petitioner told Mr. Shaw to make the check payable to Petitioner and not to Barnett Bank Bond Service. Petitioner admitted to Mr. Somers that the money he received was deposited in his personal checking account in the amount of $2,000.00 with $1,180.00 being received back as cash. These remarks are corroborated by Respondents's exhibit No. 2 admitted into evidence which is a replica of the Shaw check, a cash out ticket for $1,180.00 and a $2,000.00 deposit into the checking account of the Petitioner. Petitioner admitted to Somers that he had used the $2,000.00 deposited to pay bills. In particular it was used for payment of a clothing store that he owed money to. Petitioner told Somers that he knew it was wrong to put the Shaw check in his account; however, he stated that he had enough funds in his account to cover any personal bills that he was going to pay. Somers asked him for an explanation of what he meant by those remarks. At that point Petitioner took a check out of his pocket made from a Mr. Jolley. A replica of that check may be found as Respondent's exhibit No. 3 admitted into evidence. This Mr. Ernest T. Jolley was Petitioner's father-in- law. In the conversation with Mr. Somers, Petitioner then admitted that he had forged Mr. Jolley's name on the check. The photocopy of the check was made after this admitted forgery. The original was given back to the Petitioner and he tore it up. He told Somers that Mr. Jolley was unaware of the check; however, that he would have approved of Petitioner writing the check and signing Mr. Jolley's name to it. Somers asked Petitioner if he would mind if Somers telephoned Jolley while they sat there in the room. Petitioner stated that Mr. Jolley was an older man and would probably be confused if Somers called him and asked if Petitioner had authority to write the check. That ended the conversation regarding the check and Mr. Jolley was not called. Respondent's exhibit No 4 is a series of bank statements over various months associated with the Petitioner. It shows the bank balance in the account of $510.94 on March 1, 1988, the day before the Shaw check was written and $2,000.00 deposited into the account. Mr. Shaw expected to have the $3,180.00 which he paid to Petitioner used to consummate the UITs transaction, as needed. He did not expect that the Petitioner would convert that money to his own use. Susan Pritchard, Compliance Examiner within the NASD, testified at the hearing. As she describes it, NASD's purpose is to enforce rules and regulations of that organization that pertain to broker dealers and registered representatives. Petitioner would fall into that latter category. As established by Ms. Pritchard, among the rules of the NASD would be Article III, Section 19 of the Rules of Fair Practice. This provision does not allow the misappropriation of funds of clients such as was the case with Petitioner's action in the Shaw matter. Moreover, as Michael Blaker, Area Financial Manager for the Respondent, testified, Respondent perceives the fact of an individual who is licensed in Florida in the securities industry who takes a customer's money and places in his own account as being a very serious matter, whether or not restitution was made. There are no circumstances in which that conduct should be allowed as he understands the Respondent's policy on this issue. This statement of the policy is accepted as an accurate portrayal of the Respondent's attitude about taking customer's money and placing into the private account of the registrant, as was done here. Petitioner did not appear at the hearing nor otherwise offer any meaningful explanation for his misconduct with his client, Mr. Shaw, nor has any evidence of rehabilitation beyond that transaction been provided.
Recommendation Therefore, it is, recommended that a Final Order be entered which denies Petitioner's application to be registered as an associated person with Integrated Resources Equity Corporation. DONE AND ENTERED this 3rd of October, 1989, in Tallahassee, Leon County, Florida. CHARLES C. ADAMS Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 3rd day of October, 1989. APPENDIX Case No. 89-2195 The following discussion is given concerning the Proposed facts of the parties. PETITIONER'S FACTS Paragraphs 1-6 are subordinate to facts found with the exception that the portrayal the October 25, 1988 letter of the Respondent requesting all available documents relating to the Petitioner's disciplinary history is a mistake. The letter request all documents pertaining to disciplinary matters. This is taken to mean that if it is necessary for the Petitioner to go to other sources to obtain those documents it is incumbent upon him to do so. Paragraphs 7-9 are subordinate to facts found. Paragraph 10 is contrary to facts found. In paragraph 11, while it is true that the Respondent has no procedures for notifying an applicant his application is incomplete, this does not relieve the applicant of submitting a complete application. If the applicant becomes concerned about the application he or she could be reasonably expected to inquire. Paragraph 12 is subordinate to facts found. Paragraph 13 is contrary to facts found. Paragraph 14-16 are acknowledged. However, those facts are not necessary to the resolution of the dispute. Paragraph 17 is a suggestion that the sole purpose that Petitioner had in mind for Mr. Shaw leaving funds was to cover a shortage of the price of the sell proceeds and the buyers orders' net amount due is not correct. He also had in mind using Mr. Shaw's funds for his own benefit. In paragraph 18 Mr. Shaw did not understand that the purpose of giving would benefit Petitioner. Paragraph 19 is contrary to facts found. Paragraph 20 in terms of any reimbursement to Mr. Shaw does not excuse the Petitioner's conduct. Paragraphs 21-22 are subordinate to facts found. Paragraph 23 is contrary to facts found. RESPONDENT'S FACTS Paragraphs 1-2 are subordinate to facts found. Paragraphs 3-4 are not necessary to the resolution of the dispute. Paragraph 5 is spoken to in the Recommended Order under the heading of Preliminary Matters. As is paragraph 6. Paragraphs 7-15 constitute a recapitulation of testimony by witnesses at the hearing and is not fact finding per se. Nonetheless, the facts that are alluded to in the remarks attributable to those witnesses have been reported in the fact finding in the Recommended Order. Paragraphs 16-19 are subordinate to facts found with the exception that the testimony was to the effect that the $2,000.00 deposited into the checking account was used to pay personal bills. Paragraph 20 is subordinate to facts found. Paragraph 21 is not necessary to resolution of the dispute. Paragraphs 22-26 are subordinate to facts found. Paragraph 27 is subordinate to facts found in the first sentence, the remaining sentences are not necessary to the resolution of the dispute. Paragraph 28 is subordinate to facts found with the exception of reference to Article III Section 1, which in fact was referenced at the hearing as Article III Section 19. Paragraphs 29-31 are not necessary to the resolution of the dispute. COPIES FURNISHED: Douglas D. Chunn, Esquire Smith & Hulsey Suite 1800 Florida National Bank Tower P. O. Box 53315 Jacksonville, Florida 32201-3315 Belinda G. Noah, Esquire Department of Banking and Finance The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 Honorable Gerald Lewis Comptroller The Capitol Tallahassee, Florida 32399-0350 Charles L. Stutts, Esquire Department of Banking and Finance The Capitol, Suite 1302 Tallahassee, Florida 32399-0350
Other Judicial Opinions A party who is adversely affected by this Final Order is entitled to judicial review, which shall be instituted by filing one copy of a notice of appeal with the Agency Clerk of AHCA, and a second copy, along with filing fee as prescribed by law, with the District Court of Appeal in the appellate district where the Agency maintains its headquarters or where a party resides. Review of proceedings shall be conducted in accordance with the Florida appellate rules. The Notice of Appeal must be filed within 30 days of rendition of the order to be reviewed. CERTIFICATE OF SERVICE I CERTIFY that a true and comect gepy of this Final Order was served on the below-named persons by the method designated on this {30-day of Fora , 2014. Agency for Health Care Administration 2727 Mahan Drive, Bldg. #3, Mail Stop #3 Tallahassee, Florida 32308-5403 Telephone: (850) 412-3630 Jan Mills Shaddrick Haston, Unit Manager Facilities Intake Unit Assisted Living Unit (Electronic Mail) Agency for Health Care Administration (Electronic Mail) Finance & Accounting Patricia R. Caufman, Field Office Manager Revenue Management Unit Areas 5 and 6 (Electronic Mail) Agency for Health Care Administration (Electronic Mail) Katrina Derico-Harris Medicaid Accounts Receivable Agency for Health Care Administration (Electronic Mail) Thomas J. Walsh II, Senior Attorney Office of the General Counsel Agency for Health Care Administration (Electronic Mail) Shawn McCauley Medicaid Contract Management Agency for Health Care Administration (Electronic Mail) Tracy George, Chief Appellate Counsel Office of the General Counsel Agency for Health Care Administration (Electronic Mail) Lynne A. Quimby-Pennock Administrative Law Judge Division of Administrative Hearings (Electronic Mail) Christina Mesa, Esquire MESA Law, P.A. P.O. Box 10207 Tampa, Florida 33679-0207 Thomas P. Crapps Administrative Law Judge Division of Administrative Hearings (Electronic Mail) NOTICE OF FLORIDA LAW 408.804 License required; display.-- (1) It is unlawful to provide services that require licensure, or operate or maintain a provider that offers or provides services that require licensure, without first obtaining from the agency a license authorizing the provision of such services or the operation or maintenance of such provider. (2) A license must be displayed in a conspicuous place readily visible to clients who enter at the address that appears on the license and is valid only in the hands of the licensee to whom it is issued and may not be sold, assigned, or otherwise transferred, voluntarily or involuntarily. The license is valid only for the licensee, provider, and location for which the license is issued. 408.812 Unlicensed activity. -- (1) A person or entity may not offer or advertise services that require licensure as defined by this part, authorizing statutes, or applicable rules to the public without obtaining a valid license from the agency. A licenseholder may not advertise or hold out to the public that he or she holds a license for other than that for which he or she actually holds the license. (2) The operation or maintenance of an unlicensed provider or the performance of any services that require licensure without proper licensure is a violation of this part and authorizing statutes. Unlicensed activity constitutes harm that materially affects the health, safety, and welfare of clients. The agency or any state attorney may, in addition to other remedies provided in this part, bring an action for an injunction to restrain such violation, or to enjoin the future operation or maintenance of the unlicensed provider or the performance of any services in violation of this part and authorizing statutes, until compliance with this part, authorizing statutes, and agency rules has been demonstrated to the satisfaction of the agency. (3) It is unlawful for any person or entity to own, operate, or maintain an unlicensed provider. If after receiving notification from the agency, such person or entity fails to cease operation and apply for a license under this part and authorizing statutes, the person or entity shall be subject to penalties as prescribed by authorizing statutes and applicable rules. Each day of continued operation is a separate offense. (4) Any person or entity that fails to cease operation after agency notification may be fined $1,000 for each day of noncompliance. (5) When a controlling interest or licensee has an interest in more than one provider and fails to license a provider rendering services that require licensure, the agency may revoke all licenses and impose actions under s. 408.814 and a fine of $1,000 per day, unless otherwise specified by authorizing statutes, against each licensee until such time as the appropriate license is obtained for the unlicensed operation. (6) In addition to granting injunctive relief pursuant to subsection (2), if the agency determines that a person or entity is operating or maintaining a provider without obtaining a license and determines that a condition exists that poses a threat to the health, safety, or welfare of a client of the provider, the person or entity is subject to the same actions and fines imposed against a licensee as specified in this part, authorizing statutes, and agency rules. (7) Any person aware of the operation of an unlicensed provider must report that provider to the agency.
Findings Of Fact At all times relevant hereto, respondent Maria I. Casas, held license number PS0014711 issued by petitioner, Department of Professional Regulation, Board of Pharmacy. When the events herein occurred, respondent was prescription department manager for Cuca Pharmacy, Inc. (Cuca) at 11048 West Flagler Street, Miami, Florida. The president and permittee of the pharmacy was Hortensia Lopez-Perez who does not hold a pharmacist license. Respondent has been licensed as a pharmacist in the State of Florida since 1975. In February, 1984 Alberto Fernandez was performing undercover operations in the Miami area for the Drug Enforcement Agency (DEA) for the purpose of enforcing federal narcotic laws. On February 17, he received information from an informant that ten kilograms of cocaine could be purchased for $21,000.00 per kilogram from two individuals named Zayas and Santos. Be was told the cocaine was stored at Cuca. Fernandez arranged a meeting with Zayas and Santos in Hialeah, but no sale was consummated since Zayas and Santos were unable to produce any cocaine. On February 25, Fernandez again received a telephone call from his informant and was told to go to Cuca and meet an individual named Jesus Avila who was interested in dealing some cocaine. There he was introduced to Avila by an undisclosed individual, and the three negotiated a sale of ten kilograms at the rear of the store. There is no evidence that Casas was aware of these negotiations or that she was even on duty at this time. In any event, Avila agreed to sell ten kilograms to Fernandez for an undisclosed price. As a good faith gesture, the two further agreed to meet at a nearby shopping center where Fernandez would display the money and Avila would show the drugs. if both parties were satisfied, the sale would be consummated at Cuca. Fernandez went to the shopping center at the designated time, but Avila never showed. Fernandez then returned to the drug store where the permittee (Lopez-Perez) told him the cocaine was on its way and not to worry. Although Casas was on duty when Fernandez met with Lopez-Perez, it is found she was not privy to the conversation as it related to a shipment of cocaine. Several hours later Fernandez received a telephone call advising that the cocaine had arrived and to return to Cuca. He did so and met with Avila and Lopez-Perez in the rear of the store. The three agreed on a sale within a few days. Again Casas was not a party to these discussions. On February 29, Fernandez received another telephone call from his informant and was told the cocaine could be purchased at Cuca around 3:00 p.m. At the designated time, Fernandez, Lopez-Perez and the informant went to the rear of the store. Casas joined them a moment later to use the restroom which was also located in the rear of the store. As Casas came out of the restroom, Lopez-Perez pulled a clear plastic bag containing a white powdery substance from a metal cabinet and gave it to Fernandez. Although Casas was in the vicinity of the transfer, it is found she did not know the nature of the transaction. This is because Casas had no reason to believe that drugs were being illicitly transferred, and she was only in the rear of the premises for a matter of moments to use the restroom. After her business was completed she returned to the front of the store. Shortly thereafter, both Casas and Lopez-Perez were arrested by federal agents for allegedly violating federal narcotic laws. The contents of the bag transferred from Lopez-Perez to Fernandez were subjected to a chemical analysis and found to contain 2.2 pounds (one kilogram) of 95 percent cocaine hydrochloride, a controlled substance and legend drug which requires a prescription to dispense. The drug was dispensed to Fernandez without a prescription. Records of Miami area drug wholesalers introduced into evidence reflected that Cuca did not order any cocaine for prescription purposes during the period from January 1, 1982 - through June 30, 1984. This was confirmed by Casas' testimony. As prescription manager it was her responsibility to maintain all drug records providing for the security of the prescription department. Lopez was convicted on August 16, 1984 on two counts of violating federal statutes. She is now appealing her conviction. Although Casas was arrested with Lopez-Perez Casas was not convicted of any crime relating to the illicit drug transactions in question. There is no evidence that Casas was involved in or knowingly condoned the illegal drug activity, or that she was negligent in supervising the licensed premises.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the two administrative complaints against respondent be DISMISSED, with prejudice. DONE and ORDERED this 20th day of January 1986, in Tallahassee Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904)488-9675 Filed with the Clerk of the Division of Administrative Hearings this 20th day of January 1986. APPENDIX TO RECOMMENDED ORDER IN CASE NOS. 84-1612 & 85-0968 PETITIONER: Covered in finding of fact 1. Covered in finding of fact 1. Covered in finding of fact 1. Covered in finding of fact 2. Covered in finding of fact 2. Covered in finding of fact 1. 7. Essentially covered in finding of fact 3. 8. Essentially covered in finding of fact 3. 9. Essentially covered in finding of fact 4. 10. Covered in finding of fact 5. 11. Covered in finding of fact 5. 12. Covered in finding of fact 5. 13. Covered in finding of fact 6. 14. Covered in finding of fact 6. 15. Covered in finding of fact 1. 16. Covered in finding of fact 5. 17. Covered in finding of fact 7. 18. Covered in finding of fact 1. 19. Covered in finding of fact 7. 20. Covered in finding of fact 1. COPIES FURNISHED: Bruce D. Lamb, Esquire 130 N. Monroe St. Tallahassee, FL32301 Rolando A. Amador, Esquire 799 Galiano, Suite 206 Coral Gables, Florida 33134
The Issue The issue is whether Dr. Veloso is subject to discipline because he was convicted of the first degree misdemeanor of Medicaid fraud.
Findings Of Fact A three count information was filed against Dr. Veloso in the circuit court for Palm Beach County on April 2l, 1989, alleging that Dr. Veloso was guilty of filing a false Medicaid claim, receiving payment for a false Medicaid claim, and grand theft. A probable cause affidavit had been executed by a special agent for the Medicaid fraud control unit of the Office of the Auditor General on July 19, 1988, setting forth the results of interviews the agent had with persons on whose behalf Medicaid billings had been submitted by Dr. Veloso in 1986 and 1987. Patients stated that they had not actually been treated by Dr. Veloso. According to the judgment entered by the circuit court in Palm Beach County on October 2, 1989, Dr. Veloso entered a plea of guilty to the first degree misdemeanor of Medicaid fraud, as a lesser included offense encompassed within Count I of the information, which had charged him with the felony of filing a false Medicaid claim in violation of Section 409.325(4) (a), Florida Statutes. The judgment bears a hand interlineation that the guilty plea is an "Alford" plea. The judge withheld adjudication of guilt on October 6, 1989, and placed Dr. Veloso on probation for a period of one year, subject to a number of conditions, including that he pay restitution to the Department of Health and Rehabilitative Services of $492, along with $5,000 as the cost of investigation and $80.25 in court costs. A separate order requiring restitution in those amounts was also entered on October 2, 1989. At the time Dr. Veloso entered his guilty plea, he was represented by counsel. At the time of the events charged in the information, Dr. Veloso had been licensed as a medical doctor by the State of Florida since 1975. He was also a licensed pharmacist. Dr. Veloso has never before been the subject of disciplinary action by the Board of Medicine or the Board of Pharmacy. Dr. Veloso testified during the hearing that he is innocent of any wrong doing, and entered his plea of guilty only as a plea of convenience. He testified about the six patients who are named in Count I of the information, in an attempt to demonstrate that he had actually treated those persons, was familiar with them, and was therefore entitled to bill Medicaid for his services as a physician. Dr. Veloso also testified that he would not have pled guilty if he had known that doing so would jeopardize his licensure. The testimony of Dr. Veloso is not convincing. At the time when the State of Florida was prepared to go to trial on the criminal charges Dr. Veloso himself determined that there was a sufficient likelihood that his testimony would not be persuasive that he declined to go to trial, and entered the plea of guilty which is the basis for the board's administrative complaint. Dr. Veloso himself describes an "Alford" plea in his proposed findings of fact in the following way: A plea of "Alford" is the result of the holding in North Carolina v. Alford, 400 U.S. 25 (1970). Essentially, the Alford plea recognizes three elements: (a) a consistent affirmance of innocence, (b) a waiver of the right to a trial and (c) the existence of a record, at the time of the plea which contains overwhelming evidence against the accused. Based upon the certified copies of the documents from the criminal prosecution, Dr. Veloso's probation should have terminated by October 6, 1990. Dr. Veloso apparently has successfully completed his period of probation.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Dr. Veloso be found guilty of having violated Section 458.331(1)(c), Florida Statutes (1985), that his license to practice medicine be suspended for a period of six months, and that he be fined $1,500. DONE and ENTERED this 26th day of February, 1991, at Tallahassee, Florida. WILLIAM R. DORSEY, JR. Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 26th day of February, 1991. APPENDIX TO RECOMMENDED ORDER CASE NO. 90-5481 Rulings on findings proposed by the Respondent: Findings 1 and 2 have been accepted. Finding 3 has been rejected. The reasons for the rejection are detailed in the Findings of Fact. COPIES FURNISHED: Richard Grumberg, Esquire Department of Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792 Andrea Newman, Esquire Law Office of Michael P. Weisberg 1840 Coral Way, 4th Floor Miami, FL 33145 Dorothy Faircloth, Executive Director Department of Professional Regulation Board of Medicine 1940 North Monroe Street Tallahassee, FL 32399-0792 Jack McRay, General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, FL 32399-0792
The Issue Whether Respondent committed the offenses alleged in the Administrative Complaint and, if so, the penalties that should be imposed, against his license to practice medicine in the State of Florida.
Findings Of Fact At all times pertinent to this proceeding, Respondent was licensed to practice medicine in the State of Florida, having been issued license number ME 0003174. Respondent, who was first licensed to practice medicine in the State of Florida in 1946, retired in 1984 and his license was soon thereafter placed on an inactive status. Respondent is registered with the Drug Enforcement Agency, DEA # AP 0114087, authorizing Respondent to issue controlled substances in Coral Gables, Florida. In June 1987, Respondent resided in or near Franklin, North Carolina. Respondent is not licensed to practice medicine in the State of North Carolina, and he is not authorized to issue controlled substances in the State of North Carolina. On or about June 8, 1987, Respondent authorized Kenneth Leon Murphy, a pharmacist who at that time worked at the Revco Pharmacy in Franklin, North Carolina, to fill a prescription for acetaminophen with codeine and to dispense the same to Respondent. Codeine is a controlled substance as defined by the provisions of Chapter 893, Florida Statutes. This prescription was filled on June 8, 1987, by the Revco Pharmacy in Franklin, North Carolina and picked up by Respondent that same day. On June 11, 1987, Respondent wrote a prescription for chloral0 hydrate to be dispensed to himself. Respondent listed his Drug Enforcement Agency number on the prescription. Respondent had the prescription filled by Mr. Murphy at the Revco Pharmacy in Franklin, North Carolina where he personally picked up the prescription. Chloral hydrate is a controlled substance as defined by the provisions of Chapter 893, Florida Statutes.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the Department of Professional Regulation, Board of Medicine, enter a final order which finds that Respondent violated the provisions of Section 458.331(1)(q),(r), and (v), Florida Statutes, which reprimands Respondent for these violations, and which places Respondent's licensure on probation for a period of one year. It is recommended that no administrative fine be imposed in consideration of the mitigating factors presented by this case. DONE AND ENTERED this 22nd day of December, 1989, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Hearing Officer The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 904/488-9675 Filed with the Clerk of the Division of Administrative Hearings this 22nd day of December, 1989. APPENDIX TO THE RECOMMENDED ORDER IN CASE NO. 3670 The proposed finding contained in paragraph ten of the Petitioner's proposed recommended order that Respondent's license is delinquent is rejected as being unsubstantiated by the evidence. The remaining proposed findings of fact submitted on behalf of Petitioner are adopted in material part by the Recommended Order. COPIES FURNISHED: Andrea Bateman, Senior Attorney Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 William S. Piper, Sr., M.D. 1019 Malaga Avenue Coral Gables, Florida 33134 Dorothy Faircloth Executive Director Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Kenneth B. Basley General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
The Issue The issues for consideration in this case are whether the Petitioner, Josephine Kimball, is entitled to an award of attorney fees from Respondent, Department of Health, as provided in Section 120.595, Florida Statutes (2003), and, if so, in what amount.
Findings Of Fact Based on the oral and documentary evidence presented at hearing and on the entire record of this proceeding, the following Findings of Fact are made. The Department, through its Bureau of Statewide Pharmaceutical Services (formerly the Bureau of Pharmacy Services), is the state agency responsible for administering and enforcing the Florida Drug and Cosmetic Act, Chapter 499, Florida Statutes (1997), which includes the regulation of the manufacture, promotion, and distribution of prescription drugs. The Department initiated an Administrative Complaint in August 1993 (1993 Administrative Complaint) while in the middle of an investigation and after participating in a federal and state force of agencies that executed a search and seizure of the business establishment and of the home of James T. Kimball and his wife, Josephine Kimball, both of which were located in Wesley Chapel, Florida. The Kimballs' business establishment was located at 29949 State Road 54 West in Wesley Chapel, Florida ("business establishment" or "29949 State Road 54 West"). The search and seizure took place on May 12, 1993, pursuant to federal warrants. The 1993 Administrative Complaint was issued to Discovery Experimental and Development, Inc. ("DEDI"), located at 29949 State Road 54 West and related to that company's alleged sale of drugs that were not approved by the Federal Drug Administration (FDA). After the 1993 Administrative Complaint was filed, the Department continued to investigate the activities of DEDI. Deborah Orr (Agent Orr) began working for the Department as a drug agent and investigator on or about 1993 and was assigned to investigate the underlying case until the case culminated. During the investigation, Agent Orr and other Department agents, investigators, and officials reviewed documents and other evidence seized during the search of the business establishment and the home of the Kimballs that tied both James and Josephine Kimball to several corporations that appeared to be connected to the manufacture and sale of certain unapproved drugs. Among the documents found and seized from the Kimballs' home, pursuant to the 1993 warrant and reviewed by Agent Orr, was the financial statement of James and Josephine Kimball dated April 14, 1992. According to that document, James and Josephine Kimball were 90-percent owners of DEDI, which "develops pharmaceuticals and chemicals for manufacturing" and had an assessed value of $1,000,000; James and Josephine Kimball were 90-percent owners of ASTAK, Inc. ("ASTAK"), a company that "manufactures custom order vitamins"; James T. Kimball was a 100-percent owner of Discovery Experimental and Development, Mexico N.A. (DEDI of Mexico), a company that "manufacture[s] pharmaceuticals" and ships to 12 countries; and James and Josephine Kimball were 83-percent owners of Discovery Tour Wholesalers, Inc. (Tours), which owned the real property located at 29949 State Road 54 West. The Department's investigation indicated that several companies controlled by the Kimballs had separate and distinct functions related to the unlawful drug enterprise. For example, it appeared that one company manufactured the unlawful drugs, another took and filled orders from customers for the unlawful drugs, and another put out promotional information and literature about the unlawful drugs. During the investigation, the Department determined that most of the corporations involved in the unlawful drug enterprise had common ownership and operated from 29949 State Road 54 West. The Department's investigation revealed that Josephine Kimball provided administrative and secretarial services, as well as "consultant services," for several corporations owned by her husband, James T. Kimball, and/or owned jointly by Mr. and Mrs. Kimball that were alleged and found to have been involved in unlawful drug activities. Prior to 1997, Agent Orr received and reviewed several checks written to Tours by companies operating out of the 29949 State Road 54 West location, specifically DEDI and ASTAK, both of which were involved in the manufacture and distribution of drugs that were not approved by the FDA. From a review of these checks, it appeared that Mrs. Kimball, in her individual capacity or in connection with her role at Tours, had signature authority on those corporate bank accounts because some of the checks written to Tours by DEDI and by ASTAK, on their respective bank accounts, were actually signed by Josephine Kimball. During the course of the Department's investigation, Agent Orr obtained and reviewed a letter and check which indicated that Josephine Kimball ordered and/or purchased self-inking signature stamps for "personal checks" for "R.R. Riot" and "R.C. Brown." The letter, which effectively placed the order for the self-inking signature stamps, was signed by Josephine Kimball, as the representative of "Discovery," and requested that the self-inking stamps be mailed to "Discovery, 29949 S.R. 54 West, Wesley Chapel, Florida." Moreover, the self-inking stamps were paid for by check on the account of DEDI and bore the facsimile signature of "R.C. Brown" and the hand- written signature of Josephine Kimball. The R.R. Riot and the R.C. Brown signature stamps were connected to DEDI of Mexico and B & B Freight Forwarding, Inc. (B & B Freight), respectively. According to documents reviewed by the Department, the "R.R. Riot" signature stamp was used to establish a bank account for DEDI of Mexico. A resolution, executed by James T. Kimball, as secretary of DEDI of Mexico, authorized the bank at which that company's account was established, to honor all checks or drafts or other orders of payment drawn on the DEDI of Mexico account that bore or purported to bear only the facsimile signature of R.R. Riot. The self-inking stamp for R.C. Brown was to include the facsimile signature of "R.C. Brown" and the following: B & B Freight Forwarding Pay to Order of Dis. Exp .& Dev. Inc. For Deposit Only Lloyd's Bank Acct. #12032151 During its investigation, the Department obtained bottles of liquid deprenyl from an individual in South Carolina who had ordered the product from Discovery of Mexico, c/o B & B Freight Forwarding" at 29949 State Road 54 West. Both DEDI of Mexico and B & B Freight, which were Respondents in the underlying proceedings and alleged to have manufactured, sold, or otherwise distributed drugs that were not approved by the FDA, in violation of Chapter 499, Florida Statutes (1997). In that proceeding, B & B Freight was determined to have violated the provisions of Chapter 499, Florida Statutes (1997), as alleged in the Administrative Complaint. Prior to issuance of the 1997 Administrative Complaint, Agent Orr wrote a report of her findings based on her multi-year investigation and sent them to her supervisor, who forwarded the report to Jerry Hill, R. Ph., Bureau Chief of the Department's Bureau of Statewide Pharmaceutical Services. Mr. Hill reviewed Agent Orr's report and other information and evidence obtained during the investigation. He also talked to some of the Department agents and/or investigators who participated in the investigation at various times during the years the investigation was on-going. Based on his review of Agent Orr's report and related information and evidence, Mr. Hill believed there were several companies involved in promoting and/or advertising, manufacturing, and distributing prescription drugs that were not approved by the FDA. The specific unapproved drugs were selegiline citrate (deprenyl) and some silvicidal products, some of which had been found during inspections of the premises at 29949 State Road 54 West prior to issuance of the 1997 Administrative Complaint. After reviewing all of the information and documents provided to him, Mr. Hill believed that some of the companies were more involved in the illegal drug operation than others. However, he also believed that all of the principals had some involvement in the illegal activity. A review of the documentation, particularly certain checks, provided to Mr. Hill indicated that Josephine Kimball had full signature authority on the checking accounts of several of the corporations that the Department determined were involved in the illegal drug activity. Based on checks seized pursuant to the federal search warrants, Mr. Hill determined that checks from DEDI, written to Tours for consulting fees, were signed by Mrs. Kimball. There was also documentation that Mrs. Kimball signed checks from ASTAK that were written to Tours. Based on the information and evidence Mr. Hill had received, he believed that the corporations that were engaging in the illegal drug activities involved two principal natural persons, James and Josephine Kimball. Mr. Hill believed that he had sufficient evidence to tie Josephine Kimball and several of the companies, including DEDI, DEDI of Mexico, ASTAK, and Tours, together. Given the companies' common ownership, and Josephine Kimball's involvement in those companies, Mr. Hill was concerned that if the Department did not prosecute all the entities and individuals involved in the operation, the illegal activity would continue and the unapproved drugs would get into commerce. After careful consideration of all the information and evidence provided to him by Department investigators, agents, and other Department officials familiar with and involved in the investigation, Mr. Hill concluded that Josephine Kimball participated in the illegal drug enterprise and was, therefore, in violation of Chapter 499, Florida Statutes (1997). The Department expanded its administrative enforcement action in the underlying case by the Administrative Complaint dated June 24, 1997, based on its on-going investigation of illegal activities taking place at the 29949 State Road 54 West. Mr. Hill, on behalf of the Department, issued the 1997 Administrative Complaint, and that case was later assigned DOAH Case No. 97-3836. Pursuant to a Delegation of Authority dated February 19, 1997, Mr. Hill was authorized to initiate and pursue to conclusion any legal or administrative action authorized by Chapter 499, Florida Statutes (1997). In the underlying administrative proceeding, after taking and considering testimony and documentary evidence, the Administrative Law Judge issued a Recommended Order finding that the Department failed to prove the allegations against Josephine Kimball by clear and convincing evidence and recommending that the charges against her be dismissed. However, the Recommended Order made no finding that the Department participated in the underlying proceeding against Petitioner for an improper purpose. With regard to the corporate Respondents in the underlying proceeding, the Recommended Order found that Discovery Distributing, Inc., DEDI, ASTAK, and B & B Freight, violated the provisions of Chapter 499, Florida Statutes (1997), as alleged in the underlying proceeding and recommended that those Respondents be fined a total of more than $3.5 million dollars for the violations. The Department adopted the Recommended Order in the underlying proceeding in its Final Order. In this proceeding, Petitioner asserted that the Department brought the underlying proceeding against her for "personal" reasons. In support of this assertion, Petitioner presented the testimony of one witness, Petitioner's adult daughter, Toni Kimball, who was also a Respondent in the underlying proceeding. Toni Kimball testified that at some point, Agent Orr and/or counsel for the Department told her that the Department took the underlying action against Josephine Kimball because of Mrs. Kimball's relationship with James T. Kimball and that the case was "no longer business," but was "personal." Ms. Kimball's testimony is not credible or persuasive and is, therefore, rejected. Clearly, at the time the Department initiated the underlying proceeding and participated in that proceeding, there was sufficient evidence of Josephine Kimball's connection and involvement with the companies engaged in the illegal drug activities to bring and pursue the administrative action against her. At the final hearing in the underlying proceeding, there was voluminous evidence that appeared to tie Petitioner to the corporate Respondents found to have engaged in the illegal drug activity with which they were charged and that implicated her in some of these activities. Josephine Kimball and Tours, a company she operated, was represented by Elliot Dunn, Esquire, in the underlying proceeding, including and through the final hearing. Mr. Dunn withdrew from the case prior to Petitioner's filing her Proposed Recommended Order. Mr. Dunn did not testify at this proceeding and no time records related to his representation of Josephine Kimball or any of the other Petitioners in the underlying proceeding were available for review, inspection, or consideration. Josephine Kimball did not pay Mr. Dunn for the legal services that he provided. Instead, he was paid by ASTAK, one of the nonprevailing parties in the underlying proceeding and, later, by Strictly Supplements. There was never a contract between Josephine Kimball and Mr. Dunn that defined the terms and conditions of Mr. Dunn's legal representation on behalf of Josephine Kimball. However, during the time Mr. Dunn represented Josephine Kimball, he was in-house counsel for ASTAK and/or DEDI, a job for which his annual salary was about $52,000. Petitioner's expert witness opined that a reasonable hourly rate for an attorney representing each of the Petitioners, including Josephine Kimball was $175 to $350. Petitioner's expert did not form an opinion as to the total number of hours reasonably spent by Mr. Dunn representing Josephine Kimball in the underlying proceeding. Rather, the expert testified that he utilized Rule Regulating Florida Bar 4-1.5, which deals with the reasonableness of fees. Based on the factors in that Rule, Petitioner's expert opined that reasonable attorney's fees incurred by Josephine Kimball in the defense of the underlying case are $50,000, assuming the hourly rate of $175. Rolando J. Santiago, Esquire, provided legal services to Josephine Kimball in the post-hearing phase of the underlying proceeding. Specifically, Mr. Santiago reviewed the case file and the record in the underlying case and prepared the Proposed Recommended Order and related pleadings for Josephine Kimball. Mr. Santiago's hourly rate is $175 and he spent 92 hours providing legal services to Josephine Kimball in the underlying proceeding. Therefore, Mr. Santiago's fee for the legal work he performed for Josephine Kimball is $16,100. In light of the findings and conclusions reached in this Recommended Order, no findings are made or necessary regarding issues related to the reasonableness of the attorney's fees, the quality of the evidence presented on that issue or any other issues related to attorney's fees.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner Josephine Kimball's Petition for Attorney Fees and Costs be DISMISSED. DONE AND ENTERED this 25th day of January, 2005, in Tallahassee, Leon County, Florida. S CAROLYN S. HOLIFIELD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 25th day of January, 2005.
The Issue The issue is whether the pharmacy permit issued to the Respondent, North Florida Drug Corporation, d/b/a Scottie Discount Drugs, should be revoked or otherwise penalized based on the acts alleged in the Administrative Complaint.
Findings Of Fact North Florida Drug Corporation, d/b/a Scottie Discount Drugs, currently holds permit No. PH 0004096 as a Community Pharmacy. Respondent is located at 1448 Bakers Square, Macclenny, Florida. On December 24, 1987, Gustave Goldstein, who had been the designated prescription department manager for Respondent, resigned as a pharmacist at the Respondent's location. He notified Frankie Rosier, the owner and operator of the Respondent, that he was leaving and he notified the DPR that he would no longer be the designated prescription department manager. Carl Messina is the relief pharmacist for the Respondent. From the time of Goldstein's resignation, Messina has told Ms. Rosier many times that it is illegal to operate without a prescription department manager. DPR inspected the Respondent's pharmacy in December, 1987, and determined that there was no prescription department manager after Goldstein quit. DPR conducted an inspection of the Respondent's premises on February 16, 1988, and discovered that there still was no prescription department manager employed there. Frankie Rosier was made aware of this deficiency. On February 16, 1988, the official records of DPR showed that no new designation of a prescription department manager had been filed by Respondent and Goldstein was still listed as the prescription department manager by Respondent. On May 22, 1988, DPR again inspected the premises and determined that there was still no prescription department manager. It is important that each permittee have a designated prescription department manager to assure that all required records are kept and that the pharmacy complies with all legal requirements. This is especially important regarding control and accountability for controlled substances. Without a prescription department manager, a non-pharmacist owner, like Ms. Rosier, would and does have access to these controlled substances without any accountability. By Final Order entered and filed with the agency clerk on December 17, 1987, this same permittee was fined and placed on probation for operating a community pharmacy with an expired permit and for obtaining a permit by misrepresentation or fraud or through an error of the department or the board.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Department of Professional Regulation, Board of Pharmacy, enter a Final Order finding North Florida Drug Corporation, d/b/a Soottie Discount Drugs, guilty of the violations alleged and revoking the community pharmacy permit No. PH 0004096. DONE and ENTERED this 14th day of October, 1988, in Tallahassee, Florida. DIANE K. KIESLING Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 14th day of October, 1988. COPIES FURNISHED: Michael A. Mone' Staff Attorney Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 North Florida Drug Corporation Scottie Discount Drugs 1448 Bakers Square Macclenny, Florida 32063 Bruce Lamb General Counsel Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750 Rod Presnell, Executive Director Board of Pharmacy Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32399-0750
The Issue Whether a valid Medicaid lien exists, and, if so, what is the amount payable to Respondent pursuant to section 409.910(17), Florida Statutes, in satisfaction of the lien from a settlement received by Petitioners from a third-party.1/
Findings Of Fact Ethan Hunt (Ethan), was born on January 7, 2003, and died on May 31, 2006, from complications arising from his birth- related catastrophic neurological injury and severe disabilities. Petitioners, Elsa and Eric Hunt (the Hunts), individually, as parents of Ethan, and as the Co-Personal Representatives of the Estate of Ethan Hunt (Estate), brought a wrongful death lawsuit against the hospital where Ethan was born, a physician, and an Advanced Registered Nurse Practitioner (ARNP), to recover their individual damages as the surviving parents of Ethan, as well as the individual claim for damages of the Estate. In accordance with the limitation on damages recoverable in wrongful death actions contained in section 768.21, Florida Statutes, the Hunts' wrongful death lawsuit specifically sought the individual damages of each parent for their "mental pain and suffering and loss of companionship" of their deceased son. Further, the wrongful death action sought, on behalf of the Estate, recovery of "medical and funeral expenses." Ethan was a Medicaid recipient and a portion of his medical care was paid for by Medicaid. Respondent, Agency for Health Care Administration (AHCA), through the Medicaid program, paid $315,632.17 in benefits on behalf of Ethan for medical benefits related to the alleged negligent medical care received by Ethan. Ethan first received medical treatments for which Medicaid was obligated to make payments on June 11, 2003, and AHCA, through the Medicaid program, made its last payment for Ethan's medical care on May 29, 2006. As a condition of Ethan's eligibility for Medicaid, Ethan's right to recover from liable third-parties medical expenses paid by Medicaid was assigned to AHCA. See 42 U.S.C. § 1396a(a)(25)(H) and § 409.910(6)(b), Fla. Stat. Pursuant to section 409.910(6)(c), Florida Statutes, AHCA's Medicaid lien attached and was perfected on June 11, 2003, when Ethan first received medical care for which Medicaid was obligated to make payments. On May 25, 2005, AHCA recorded in the Miami-Dade County public record its Claim of Lien and Notice of Assignment and Other Statutory Rights (Lien), Book 23409, pages 2856-2858. By letter dated May 28, 2008, to an attorney representing the Hunts and the Estate, from AHCA’s contracted vendor, Health Management Systems (HMS), AHCA indicated that the Medicaid lien was in the amount of $315,632.17. On July 11, 2008, the Hunts, on behalf of themselves and Ethan's Estate, submitted to all defendants in the wrongful death action, Plaintiffs’ Proposal for Settlement to All Defendants (Proposal). The Proposal offered a settlement of $7,250,000.00 to be allocated as follows: Elsa Hunt $3,300,000.00 45.5% Eric Hunt $3,300,000.00 45.5% Estate of Ethan Hunt $650,000.00 9.0% The Hunts' July 11, 2008, Proposal was rejected, and a mediation of the wrongful death lawsuit was held on May 12, 2009. By letter dated May 4, 2009, to HMS, the attorney representing the Hunts in the wrongful death action notified AHCA's designated vendor of the May 12, 2009, mediation and provided a copy of the notice of mediation. AHCA did not attend or participate in the mediation. A global settlement was reached at the May 12, 2009, mediation for the total amount of $1,800,000.00. As part of the mediated settlement, the parties made an allocation of the settlement proceeds between individual claims of the surviving parents and the individual claim of the Estate. This allocation was memorialized in the Addendum to Mediation Settlement Agreement Allocation of Settlement (Addendum). Each parent was allocated a total amount of $819,000.00 "in satisfaction of their individual claims for mental pain and suffering and loss of companionship." The Estate was allocated a total of $162,000.00 "in satisfaction of its claims for medical expenses and funeral expenses." The parties allocated these amounts in accordance with the percentages as presented in the prior Proposal. By letter dated May 20, 2009, AHCA received notice that the case settled at the May 12, 2009, mediation and of the intent to issue a dismissal of the defendants in the case. On June 9, 2009, the court entered a Final Judgment of Dismissal with Prejudice. AHCA took no action to intervene in the wrongful death action or to seek relief from the settlement reached by the parties. Upon receipt of the settlement proceeds, the amount of $315,632.17 was placed into a trust account for the benefit of AHCA pending an administrative determination of AHCA's rights, and this constitutes "final agency action and notice thereof" for purposes of chapter 120, Florida Statutes, pursuant to section 409.910(17). Pursuant to 42 U.S.C. section 1396a(a)(25)(A), (B), and (H), section 1396k(a), and section 1396p(a), AHCA may only assert a lien against, and seek recovery from, the portion of a Medicaid recipient’s settlement representing the Medicaid recipient’s compensation for medical expenses paid by Medicaid. The Hunts requested that AHCA calculate the amount owed in satisfaction of the lien pursuant to the statutory formula set forth in section 409.910(11)(f).2/ The Hunts requested that this calculation be based on the Estate’s recovery of $162,000.00, minus the Estate's share of attorneys' fees and the Estate’s $15,559.01 share of the litigation costs (which represents the Estate’s 9% proportionate share of the gross $172,877.87 in litigation cost). AHCA refused to calculate the amount payable to AHCA in accordance with section 409.910(11)(f), Florida Statutes, and continues to seek payment of its full $315,632.17 Lien from the gross settlement award, including those funds allocated to the parents for their individual claims. Pursuant to section 409.910(6)(c)9., a Medicaid lien exists for seven years after it is recorded, and the lien may be extended for one additional period of seven years by AHCA recording a Claim of Lien within the 90-day period preceding the expiration of the original lien. In the instant case, AHCA recorded its Lien on May 25, 2005. By operation of law, this Lien ceased to exist on May 25, 2012 (seven years after it was recorded on May 25, 2005). AHCA did not extend the existence of the Lien by again recording it within the 90-day time period preceding its expiration on May 25, 2012. Accordingly, AHCA’s Lien no longer exists. In addition to the Lien, AHCA has subrogation and assignment rights to collect third-party benefits for the amount of medical assistance provided by Medicaid. § 409.910(6)(a) and (b), Fla. Stat. Actions to enforce the rights of AHCA must be commenced within five years after the date a cause of action accrues, with the period running from the later of the date of discovery by AHCA of the case filed by recipient or his or her legal representative, or of discovery of any judgment, award, or settlement contemplated in the section, or of discovery of facts giving rise to a cause of action. § 409.910(11)(h), Fla. Stat. By May 20, 2009, at the latest, AHCA was aware of the settlement between the Hunts and the Estate, with Ethan's physician, ARNP, and the hospital at which he was born. As of the date of the final hearing, May 13, 2014, AHCA had not exercised any subrogation or assignment rights. Accordingly, AHCA's ability to pursue subrogation and assignment rights has expired. Based on the undersigned's finding that no enforceable Lien exists, and that AHCA's subrogation and assignment rights are extinguished, as discussed more fully in the Conclusions of Law, there is no need to address any of the other factual contentions of the parties.3/
