The scope of this fraud scheme is astonishing

By LYNNE JETER

If you employ nurses with nursing degrees from Siena College, Palm Beach School of Nursing, or Sacred Heart International Institute, all located in Florida, it may be time to review their files for fraudulent activity.

The U.S. Attorney’s Office for the Southern District of Florida recently charged 25 individuals with wire fraud for selling fraudulent nursing degree diplomas to more than 7,600 people across the country. These people purchased the bogus diplomas to use as credentials to sit for their nursing board exams. Thousands of them then became licensed nurses, easily slipping under the human resources radar.

“The scope of this fraud scheme is astonishing,” said David Schumacher, a former deputy chief of the Health Care Fraud Unit for the U.S. Attorney’s Office for the District of Massachusetts, and co-chair of the Fraud & Abuse Practice at Hooper Lundy law firm. “The obvious victims are the patients who were treated by nurses who didn’t have the training and qualifications necessary to provide quality, safe care. But hospitals, health systems and other organizations that are desperate to find qualified nurses were also victimized by this scheme.”

David Weinstein, a former federal prosecutor in the Southern District of Florida and a partner at Jones Walker LLP in Miami, said the trend emanated from the COVID outbreak. “During COVID, as with many industries, both a shortage of potential employees and forced movement to online certifications proliferated the healthcare industry,” he said. “As a result, unscrupulous individuals took advantage of the situation and created a scheme to profit from these events.”

Employers who hired these fraudulent nurses had little way to know about the bogus diplomas.

“As with all due diligence checks, you rely on the information that’s in the database,” Weinstein said. “If transcripts and diplomas are submitted as a requirement to sit for licensing exams, unless there is obvious fraud in the appearance of these documents, it won’t set off any red flags. Moreover, by the time a candidate applies for employment, they have already used the fraudulent transcripts and diplomas to sit for and pass their exams.”

Schumacher pointed out that all three nursing schools are accredited. “Human resources and compliance departments at health systems should review employment records from all their nurses to determine if any of them listed diplomas from these three schools,” he said. “If so, they should investigate the diplomas, and if they’re found to be fraudulent, they should immediately terminate the nurses.

“It’s critical that health systems take these steps to mitigate harm. It’s not inconceivable that health systems will have to answer inquiries from patients and families that were treated by nurses involved in this scheme, and federal and commercial insurance payors could demand to recoup any services performed by the nurses, as well.”

Some state nursing boards are already taking action. For instance, the Georgia Board of Nursing has sent letters to at least 22 nurses who had diplomas from one of these schools, asking them to voluntarily surrender their nursing licenses, and the Atlanta VA medical center has removed three such nurses. “Boards of Nursing in other states will surely follow suit,” Schumacher said.

Moreover, if there are thousands of nurses in practice who obtained their licenses under false pretenses, there could be years of collateral litigation, including additional indictments, nursing board licensure actions, and potential lawsuits from their employers and families.