Eastern Carolina Behavioral Health CEO Sentenced to Eight Years in Prison for Expansive Multistate Healthcare Fraud

RALEIGH – United States Attorney Robert J. Higdon, Jr. announced that yesterday afternoon in federal court, SHEPHARD LEE SPRUILL, 47, of Greenville, North Carolina, was sentenced to 96 months in prison on the charge of Health Care Fraud Conspiracy, and 60 months in prison for Perjury, to be served concurrently.  Spruill was also ordered to make restitution in the total amount of $5,998,874.86, payable to the North Carolina Medicaid Program, the South Carolina Medicaid Program, and another victim of the scheme.  Spruill was further ordered to serve a three year term of supervised release, and to forfeit an additional $939,989.50 in criminal proceeds.  Under the terms of his plea agreement, Spruill is also banned from participation in Federal healthcare benefit programs for life.

Spruill’s case arose out of the investigation of Pitt County behavioral health provider Terry Lamont Speller, his biller, Donnie Lee Phillips, II; and another Medicaid provider named Reginald Saunders.  Each of these defendants were previously sentenced by Senior U.S. District Judge James C. Fox to 20 years, 9 years, and 3 years, respectively.

According to the Criminal Information and evidence discussed in open court, Spruill, then the leader of Carolina Support Services, an East Carolina behavioral health practice, supplied hundreds of patient names and identifiers to Speller, who in turn had Phillips bill the North Carolina Medicaid Program for millions of dollars in fictitious mental health services.  Spruill, Speller, and Phillips split the fraud proceeds, with Spruill receiving his cut of the funds in the form of fictitious, no-document loan repayments.  Spruill appeared before a federal grand jury and lied about his involvement with Speller, falsely claiming that he had no business relationship with Speller.

The continuing investigation into Spruill revealed that Spruill also engaged in a fraud upon the South Carolina Medicaid program, billing and being paid millions in fictitious services through another provider he owned.

United States Attorney Robert J. Higdon, Jr. stated, “As we continue to combat drug dealers and violent criminals in our district, do not for a moment believe that we have given a pass to those whose steal from taxpayers through fraud.  This case shows our continuing resolve to bring all to justice, even CEOs who commit their crimes with lies instead of guns.  This case also sends a message about the integrity of our grand jury system.  Those who choose to lie in the grand jury will be held fully accountable.”

“Health care fraud is not a road to easy riches, as this sentence demonstrates” said Derrick L. Jackson, Special Agent in Charge of the Office of Inspector General of the U.S. Department of Health and Human Services.  “Those who steal from taxpayers and vital government health care programs will be held accountable for their actions.”

In a related case, ATOYA BELLAMY, 45, of Morrisville, North Carolina, was sentenced to one year in prison for her role in Spruill’s fraud at Carolina Support Services.  BELLAMY previously pleaded guilty to Conspiracy to Commit Health Care Fraud on November 29, 2017.  BELLAMY was also ordered to make restitution to the Government.

The investigation of this case was conducted by agents of the North Carolina State Bureau of Investigation assigned to the Medicaid Investigations Division of the North Carolina Attorney General’s Office; The Internal Revenue Service – Criminal Investigation; and the United States Department of Health and Human Services Office of the Inspector General, with the assistance of the Federal Bureau of Investigation.  The investigation and prosecution of this matter is being handled in a partnership between the United States Attorney’s Office for the Eastern District of North Carolina and the Medicaid Investigations Division of the North Carolina Attorney General’s Office.  Assistant United States Attorney William M. Gilmore and Special Assistant United States Attorney Daniel Spillman of the Medicaid Investigations Division of the North Carolina Attorney General’s Office, each represented the United States.

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