Vital Health Care
Observed Fraud and Abuse
- In 1997, I observed Joe Martinez spenting 100% of his time away from Vital Health Care,
so he could observe the construction of his new house. During his absence Mr. Martinez
drew a salary that later was charge agains the Medicare Program. The day the ORT auditor
appeared at Vital Health Care, Mr Martinez returned to work at Vital Health Care, giving
the appearance he had been on the job all along. Joe share an office with me.
- In addition to draw a salary from Medicare, during his long absences of weeks and
months, Mr. Martinez, withdrew additional payroll funds which he claimed as PDOs
(Personal Days Off). Mr. Martinez was quick to chastise employees for taking "company
time" for offenses as minor as being late from lunch by 5 minutes, despite his
practice of short days and frequent absences.
- During construction of this new home in 1997, the Martinez Family hired an interior
decorator, charging merchandise and services from the Vital Health Care checking account,
later charged to the Medicare program. Checks number 21910, 21909, 17369, 17374, 17383,
23670, 24100 written to Wanda Waldrop, and signed by Diana Martinez between April 1997 and
October 1997, are examples of their theft from the Medicare Program. (See Enclosed copies
of checks). This is a small sample of their fraud and abuse.
- In 1998, in attempts to overcome new medicare benefit caps, Diana Martinez purchased,
with Vital Health Care funds, what she decribed as a "clean" (no overpayments)
Medicare number from a Kathleen Grey (or Gray), and started a second medicare company
under the name Heart of Texas Health Services, charging approximately $80,000 to the
medicare program under that new number. After receiving an overpayment notice for
approxiately $80,000, Mrs. Martinez blamed Kathleen Grey for not providing a
"clean" Medicare number. Having not fully consumated transfer of the Medicare
number, Mrs. Martinez took the position that she had never "owned" the Medicare
license, thereby implying that the employees of Heart of Texas Health Services were
employees of Kathleen Grey, very likely leaving Ms. Grey with an burden not rightfully
belonging to her.
- During 1997 or 1998, Diana Martinez withdrew funding approximating $80,000 from Vital
Health Care. According to the company cost accountant, such funds (being Medicare assets)
must be released under a loan agreement with the company and repaid according to a
repayment schedule with interest. My observation suggests that only two or three payments
have been made near the beginning. I believe the funding amount has gone beyond the
- During my involvement with the generation of employer tax returns, most (if not all)
reconciliation errors ultimately traced back to Martinez family members as not withholding
Social Security or Medicare from their paychecks. I had to complain several times to the
owners until this practice was stopped.
- Prior to my employment at Vital Health Care, Norma Anaya, the other owner of Vital
Health Care, claimed the title of Director of Finance. Norma Anaya charged a salary from
the Medicare program in excess of $100,000 per year. In the first half of 2000, I sat down
with Norma to discuss the cost report and general ledger items. During our discussion,
Norma asked me in all seriousness, "What is an asset?", which clearly
demonstrated non-qualification for a six figure salary charged to tax payors. Prior to the
ORT audit, Normas duties appeared to be shopping at the mall on company funds.
- A general practice voiced by ownership, was to assess employees as mediocre in order to
not provide "amunition" in the event of EEOC action by employees. This statement
was repeated a number of times by Joe and Diana Martinez.
- A general practice observed was a "scrabbling" of finances between company
books, for example, funds from Vital Health Care were used to start Heart of Texas Health
Services, employee advance paid from Vital Health Care were recouped through VHC, Primary
Home Care, Inc. This practice created a discrepancy of over $200,000 between two
companies, which required hiring an outside accountant to reconcile. As the one who would
be faced with the task of preparing the cost reports for the state programs, I repeated
pleaded for proper handling of finances, after which I was no longer invited to meetings
on such matters.
- In 1998, Texas Workforce Commission paperwork regarding wage verification for purposes
of unemployment benefits crossed my desk. From my observation, both employees were still
working for the company. In 1999, I was asked to accept unemployment benefits in lieu of a
paycheck, while still working for the company. I refused to accept the arrangement, and
received a cut in pay by $18,000/year. I was laid off in 2000 after completing the cost
- From appearances cash funds generated from the immunization program have been directly
pocketed by the owners. Receipts for cash transactions have not been produced, despite
repeated requests for this documentation. My best estimates were produced from bank
deposit records of check payment during reconciliation and an MS-Access program I created
to track immunizations.
- My complaints to the owners of the handling of finances have been met with responses
ranging from indifference to hostility, ultimately I was layed off.
- After my layoff, they only offered work for a price that would not support me under
existing conditions. This attitude eventually forced me out of my residence.