AFFIDAVIT
I. INTRODUCTION
1. I, Mark D. Seyler, am an investigative or law enforcement officer of the United States within the meaning of Section 2510(7)
of Title 18, United States Code, that is, an officer of the United States who is empowered by law to conduct investigations of
and to make arrests for offenses enumerated in Section 2516 of Title 18 of the United States Code. I have been employed as a
Special Agent with the Oklahoma City Division of the Federal Bureau of Investigation (FBI) since February 8, 1996. Since that
time, I have conducted several investigations of organized crime enterprises involving corruption of public officials, drug
trafficking, and other federal crimes. As a Special Agent, I have participated in investigations involving public officials suspected
of engaging in corrupt activities designed to benefit themselves and their criminal organizations. I have written or participated in
the execution of search and arrest warrants involving individuals involved in corruption, gambling, drug trafficking, and other
federal crimes. I have conducted surveillance of individuals involved in these offenses, and have analyzed records documenting
financial, real estate, and other transactions supporting various illegal activities. I have spoken with informants and subjects, as
well as other local, state and federal law enforcement officers regarding the manner in which organized criminal enterprises,
including those involving public officials, attempt to conceal their illegal activity. I have also participated in several federally
authorized Title III investigations. Along with Special Agent Steven Mark KAITEER, I have directed the investigation which is
the subject of this Affidavit, and I am thoroughly familiar with the information contained herein through personal participation,
discussions with other law enforcement officers who have participated in the investigation, and a review of documents and
reports of the investigative efforts in this matter.
II. PURPOSE OF THIS AFFIDAVIT
2. This Affidavit is submitted in support of a Complaint charging a violation of Title 18 U.S.C., Section 666 (Program Fraud)
by Brent VanMeter, Deputy Commissioner of the Oklahoma State Department of Health. Since this Affidavit is being
submitted for the limited purpose of demonstrating probable cause to arrest Brent VanMeter for this offense, I have set forth
only the facts that I believe are required to establish the necessary foundation for the requested Complaint.
III. FACTS AND CIRCUMSTANCES
3. Beginning in 1996, the FBI was approached by several individuals with allegations of corruption at the Oklahoma State
Department of Health (OSDH) in the area of nursing home licensing and regulation. Based upon these allegations, some of
which are described below, the FBI undertook an investigation to identify the business practices at long term care facilities in
Oklahoma, and the identities, responsibilities, and powers of regulatory employees at OSDH. To develop this information,
other Agents and I have reviewed federal and state statutes and regulations regarding long term care in Oklahoma and have
spoken with, and/or reviewed statements of, several experts in the industry. This investigation has been conducted with
participation and assistance of the Oklahoma Attorney General's Medicaid Fraud Control Unit (MFCU), the United States
Department of Health and Human Services-Office of Inspector General (DHHS-OIG), and the Internal Revenue Service
(IRS). Throughout the investigation, the involved agencies have employed a wide variety of investigative techniques, including
the use of Federal Grand Jury Subpoenas, informants, consensual monitoring, witness interviews, surveillance, and
court-ordered Title III wiretaps.
4. The FBI's investigation has established that the financial success of long term care facilities in Oklahoma hinges largely on the
ability to ``fill'' the facilities with paying patients (often referred to as residents). Nursing home owners are paid through a
combination of private funding and government funded Medicaid or Medicare programs. For example, each Medicaid eligible
resident represents approximately $66 per day in gross income for an Oklahoma nursing home owner. Such Medicaid
payments are issued by the State Health Care Authority and are made through a combination of state and federal funding.
Medicare payments are provided in a different manner through the federal government based upon the age and condition of the
Medicare recipient. Financial distress is placed upon a nursing home operator when a facility is operating at a low resident
occupancy rate. Conversely, the owner/operator of a long term care facility benefits greatly when the occupancy rate for that
facility is high.
5. To become eligible for payment through Medicaid and/or Medicare, the operators of long term care facilities are required to
meet certain minimum standards, make a number of public disclosures regarding ownership, and submit to federally mandated
unannounced inspections (called Title 19 surveys) as dictated by the Federal Health Care Finance Administration (HCFA). In
Oklahoma, as in most states, HCFA delegates enforcement of these regulations to OSDH. In addition to enforcing the federal
regulations, OSDH oversees compliance with several Oklahoma statutes regulating the nursing home industry. Nursing homes
must pass OSDH inspections and meet minimum licensing standards to maintain eligibility for Medicaid and Medicare payments
and avoid regulatory fines and possible closure due to concern for the safety of patients.
6. I am aware through conversations with law enforcement agents associated with health care investigations that OSDH
receives in excess of $10,000 in any one year period from federal programs, including the federal contract under which OSDH
conducts Title 19 surveys.
7. The Special Health Services/Long Term Care program of OSDH, under the direction of Deputy Commissioner Brent
VanMeter, is responsible for conducting federally mandated surveys and other inspections at long term care facilities, closing
poorly performing long term care facilities, and dispersing residents from those closed facilities to new facilities. By state statute,
OSDH is also responsible for naming Temporary Managers to operate poorly performing nursing homes and sets the
compensation for those Temporary Managers.
8. Brent VanMeter is the Deputy Commissioner overseeing Special Health Services/Long Term Care program of OSDH, and
has recently served as the Acting Commissioner. OSDH is governed by the State Board of Health, consisting of board
members appointed by the Governor, who in turn oversee the actions of the OSDH Commissioner, currently Dr. Jerry Nida.
Brent VanMeter is an at-will, non-appointed employee, who started with OSDH in approximately 1977, and through a series
of promotions was eventually named Deputy Commissioner by approximately 1986. As Deputy Commissioner of Special
Health Services/Long Term Care, Brent VanMeter oversees a program which is responsible for almost all areas of regulation in
the Oklahoma long term care industry. Under the direction of Brent VanMeter, this program issues licenses to open and
operate nursing homes, conducts routine inspections (called surveys) of long term care facilities, issues fines and other
enforcement actions against facilities not in compliance with applicable regulations, and closes or appoints Temporary
Managers over nursing homes which appear to pose a risk to the safety of the patients at those facilities. In the area of
long-term care, Deputy Commissioner Brent VanMeter makes many of the decisions which are delegated to the Commissioner
by state statute and/or regulation.
9. In the Spring of 1996, a Confidential Source (CS-1) provided information to the FBI that Brent VanMeter was offering
preferential treatment to certain nursing home owners in Oklahoma. CS-1 has been an owner and operator of nursing homes in
the State of Oklahoma for over 20 years, and as such has knowledge of the nursing home industry and the Special Health
Services/Long Term Care Program of OSDH. CS-1's information has been corroborated to the extent possible by the FBI,
and CS-1 has not been known to provide false or misleading information.
10. CS-1 stated that he/she had personally witnessed Brent VanMeter offer to direct OSDH's survey teams to target certain
long term care facilities in the State of Oklahoma for harsh surveys and inspections. Because negative inspections frequently
result in significant fines and other financial penalties, Brent VanMeter had indicated that he might be able to use such regulatory
power to drive down the price of certain nursing homes so they might be acquired by an owner cooperating to financially enrich
Brent VanMeter. At the time, CS-1 heard Brent VanMeter say "I can't talk to everyone about this, I could go to jail."
11. In 1996, CS-1 also heard other nursing home owners in Oklahoma speak of "passing the hat" to pay off Brent VanMeter.
These payoffs were allegedly made to receive preferential treatment in the OSDH survey and inspection process. CS-1 heard
these same nursing home operators discuss the fact that Brent VanMeter was providing advance notice of when a "surprise"
Title 19 Survey might be coming. Such advance notice is extremely advantageous to a nursing home owner, because problems
with staffing levels, cleanliness, and other issues addressed during a survey can be fixed shortly before the inspection team
arrives. As such, advance notice of Title 19 surveys is prohibited under 42 U.S.C. and 1395i-3 (g)(2)(A), and carries a $2,000
civil penalty.
12. Based, in part, on CS-1's information, and other methods of investigation, the FBI and the involved agencies initiated a
court authorized Title III wiretap investigation on telephones associated with Brent VanMeter and others in the nursing home
industry. During several intercepted telephone conversations over these Title III wiretaps, Brent VanMeter has been heard
offering preferential treatment to a select number of nursing home owners. This preferential treatment has included advance
notice of Title 19 Surveys, other fraud in the survey process, the transfer of patients to preferred owners, and the targeting of
other non-preferred owners for harsh regulatory treatment. During other Title III interceptions, Brent VanMeter has been heard
requesting, soliciting, and demanding payments from nursing home operators.
13. Through a review of OSDH records, I have identified a nursing home business in Oklahoma, controlled by two primary
owners, which owns several long term care facilities throughout the state. In 1996, CS-1 had alleged this nursing home business
was one of the businesses paying Brent VanMeter for favorable treatment. One of the owners associated with this particular
nursing home operation have been intercepted during the Title III wiretap investigation on Brent VanMeter's telephones.
Through discussions with confidential informants, other law enforcement officers involved in Health Care regulation, and the
State Ombudsman's Office. I am aware that this particular nursing home owner (NHO) continues to be in charge of many
facets of his company's operations involving long term care facilities.
14. During an intercepted conversation on April 17, 2000, NHO asked Brent VanMeter to backdate documents for inclusion
in OSDH files, so that NHO's company could receive Medicare or Medicaid reimbursement. During initial portions of this
telephone conversation, Brent VanMeter told NHO that he had been looking earlier for him so that NHO could give him
money. NHO stated that it would be easier for him to give Brent VanMeter money if VanMeter agreed to do something for
him. A portion of that conversation is transcribed below:
Excerpt 1:
NHO: (U) I need for you to do something and that'll probably make it...
VANMETER: Okay.
NHO: ...(U) for me. (NHO's business partner) wrote a letter back in May. Asking for all of our nursing home to have dual.
VANMETER: Right.
NHO: Okay, we don't want that.
VANMETER: You don't?
HNHO: That's gonna cost us about fifty grand. (Laughs) I'm not supposed to tell you that.
VANMETER: Okay.
NHO: If they're dual like that, we can not get reimbursement for all of our uh,...
VANMETER: If your, for your stand alone's?
NHO: No for our uh, um, our uh stick. Our little dietetic sticks?
Excerpt 2:
NHO: So, I don't know if its fifty grand. But I mean I'm...
VANMETER: Well it's a bunch, I know.
NHO: It's a bunch.
VANMETER: It's five bucks a day or something like that.
NHO: Yeah. So what I need for you to do now, uh, I'll write the letter.
VNAMETER: Uh-huh.
NHO: I need for you to stamp it in and get somebody to go back in on the computer and just show that (U) we, the next day
mailed back a, a rescinding letter.
VANMETER: Yeah, well I'll take two per cent of that.
NHO: Okay. No problem.
VANMETER: Okay?
MHO: That's all that I'll give you.
15. Based upon my training and experience and conversations with MFCU investigators, I am aware that OSDH can license
facilities to provide two types of long term care on the same premises. In this manner, part of the facility may be exempt from
regulations requiring he level of care necessary for the higher classification of licence in the "dual" facility. In some instances, this
"dual" classification may preclude the operator of the facility from claiming certain types of Medicare or Medicaid
reimbursement for services provided at the facility. Based upon this information, I believe that during the above transcribed
conversation, NHO indicated that several months earlier, his company had made an unfortunate financial decision to apply for,
and receive, dual status for its nursing homes. Medicare or Medicaid was refusing to reimburse NHO's company for a
particular medical procedure because of this dual status. NHO was requesting Brent VanMeter to falsify OSDH records to
show that NHO's nursing homes have classified as "non-dual" for several months. Such a change in status would apparently
generate approximately $50,000 in extra income. Brent VanMeter indicated that in return for fraudulently changing OSDH's
records, he would demand "two-percent" of this figure. Such a demand was in violation of Title 18, U.S.C., Section 666, which
prohibits the demand of anything of value in connection with any official transaction of a government agency, where the
transaction itself is valued at $5,000 or more.
16. During at least nine subsequent intercepted conversations with NHO from April 19, 2000 to April 28, 2000, Brent
VanMeter described how he had lied to other OSDH employees and instructed them the OSDH must have "lost" a letter from
NHO's company rescinding the request to receive "dual" status. Brent VanMeter told NHO that the other employees were
now "on board" and would contact HCFA on NHO's behalf to argue for the release of the government payments to NHO's
company.
17. During an intercepted telephone conversation on April 26, 2000, Brent VanMeter was intercepted telling NHO that he had
"fixed your deal," and all that was necessary was for NHO's business to send OSDH a letter, falsely stating that they had sent a
rescinding letter regarding the duel status many months ago. During this conversation, Brent VanMeter also apologized for not
informing NHO about a particular Title 19 survey that was underway at one of NHO's facilities, stating that if he had known, he
would have provided NHO with advance notice of this survey. NHO told Brent VanMeter that agreed to meet at a later time
near NHO's business location. Based upon my training and experience, I believe this "package" was at least a portion of the
"two percent" which Brent VanMeter requested on April 17, 2000.
18. During an intercepted Title III conversation on the afternoon of May 2, 2000, Brent VanMeter contacted NHO and
indicated that he was traveling to NHO's location to meet with NHO. FBI surveillance followed Brent VanMeter to NHO's
location, where they met for over an hour. This trip required Brent VanMeter to travel a distance in excess of 40 miles. Based
upon my training and experience, the Title III interceptions, and the knowledge of this case, I believe that this trip was for the
purpose of picking up the "package" which NHO had arranged for Brent VanMeter.
19. After leaving NHO's business on the afternoon of May 2, 2000, FBI surveillance units followed Brent VanMeter to a legal
gambling business. Brent VanMeter spent several minutes inside this location, and was observed placing bets. Surveillance and
several Title III interceptions, have confirmed that Brent VanMeter frequently gambles on horse races. During the last three
months, Brent VanMeter has attended simulcast races on a regular basis at three different locations in Oklahoma City. FBI
surveillance has observed him making numerous bets, including some for over $100. Most of these gambling sessions have
occurred during afternoon working hours, when Brent VanMeter should have been conducting state business as Deputy
Commissioner of OSDH. During intercepted telephone conversations on the afternoons (prior to 5:00 p.m.) of March 15,
2000, and March 22, 2000, Brent VanMeter asked his secretary at OSDH to take $500 out a jar in his office and bring it to
him at a location which offers simulcast betting on horse races. On both occasions, Title III interceptions and/or surveillance
have shown that the secretary did meet Brent VanMeter at this simulcast betting location. On both occasions, Brent VanMeter
was observed placing bets on horse races following the deliveries by his secretary. Based upon this information regarding Brent
VanMeter's betting habits, I believe that on May 2, 2000, Brent VanMeter was using the money he had received from NHO to
place bets at the gambling business.
20. After departing the gambling location on May 2, 2000, Brent VanMeter proceeded to his office at OSDH where the
involved law enforcement agencies were executing a federal search warrant. Brent VanMeter was placed under arrest at
approximately 5:20 p.m., for a violation of Title 18, United States Code Section 666, arising from his corrupt transactions with
NHO. During the search at OSDH, Agents located the letter from NHO's company falsely alleging that they had sent a
rescinding letter regarding the dual status of the company's nursing homes. This letter was located in the office of the employee
to whom Brent VanMeter had directed NHO's company to send the letter.
21. During a brief interview with this OSDH employee, he/she stated that Brent VanMeter had approached him within the past
two weeks regarding a letter supposedly sent by NHO's company which OSDH must not have received. The employee said
that Brent VanMeter had encouraged him to work with NHO's company to ensure that the company's problems with federal
funding relating to the dual status were resolved.
FURTHER THE AFFIANT SAYETH NOT.
Mark D. Seyler, Special Agent
Federal Bureau of Investigations
Subscribed and sworn to before me this 3rd day of May, 2000.
VALERIE K COUCH<BR>
United States Magistrate Judge