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A motion by United States Attorney Robert J. Higdon Jr. shows one of the defendants in a 75-count Medicaid fraud case traveled extensively and would present a danger if allowed pretrial release.

Higdon, who is the federal attorney for the Eastern District of North Carolina, filed an appeal on a Nevada federal magistrate judge’s order which had granted Timothy Mark Harron pretrial release on a superseding indictment in the multimillion dollar fraud case, which is now unsealed. District Court Judge Richard E, Meyers II on Wednesday signed an order that Harron be transferred to the Eastern District of North Carolina and be held in United States Marshal Service’s custody until the order by the Nevada judge can be reviewed.

Mr. Harron and his wife, Latisha, had taken up residency in Las Vegas after marrying in 2018, all the while allegedly running the widespread Medicaid fraud, previous documents and a press statement by Higdon Wednesday note.

Another magistrate judge in Nevada had ordered Mrs. Harron to be detained in the Eastern District of North Carolina until proceedings begin.

In determining Mrs. Harron should be detained and transferred to North Carolina, Magistrate Judge Elayna J. Youchah noted, according to Higdon’s motion, there was still more than $600,000 in fraud proceeds unaccounted for and her “extensive access to private pilots.”

Mrs. Harron had initially told investigators her husband was unaware and not involved in the scheme, Higdon wrote in the motion.

“Since then, (she) has been in regular communication with (her husband) and other family members from her places of detention. In those communications, (she) revealed her representations to law enforcement to the effect she committed the offense by herself.” 

Higdon said in the motion, however, unbeknownst to Mr. Harron, her effort of saying her husband was not involved “was simply an effort to obstruct justice.”

Arrest and proceedings of Mr. Harron

On May 19, Mr. Harron was charged in the superseding indictment and two days later he was informed his arrest was imminent and he was directed to surrender to the FBI. He surrendered on May 22 in Las Vegas.

Tuesday he was taken before United States Magistrate Judge Daniel J. Albregts in the District of Nevada and the superseding indictment was unsealed. For the first time Mr. Harron received a copy of the charges and a summary of the evidence against him. “Likewise, he was informed for the first time that he faced, contrary to what his wife faced on the original indictment, several decades in prison for his offenses,” Higdon wrote. “Then, in a hearing without testimony, and contrary to the recommendation in the pretrial services report, Judge Albregts released (him) to home confinement, with no third party custodian, and an instruction to voluntarily appear in North Carolina for further proceedings. Notably, under the home confinement conditions imposed, (he) would not even have an ankle monitor affixed to his body. Instead, he was entrusted to keep his mobile phone with him to permit the United States Probation Office to know his whereabouts.”

The government requested and Judge Albregts permitted a 48-hour stay to permit the government to appeal his release order.

Points by the government

Higdon wrote in his motion that in terms of the nature and circumstances of the offense several factors point to detention.

Those factors are:

The defendant and his wife fraudulently acquired more than $13 million dollars by falsely billing the North Carolina Medicaid program for fictitious home health services. 

The fraud has been ongoing in nature since at least 2013, and was committed from around the world, including Nevada, North Carolina, Virginia, Connecticut, French Polynesia, Tahiti, the Dominican Republic, and other locations. 

The fraud was carried out using the identities of third parties and corporate nominees. 

During the course of the fraud, the defendants evaded detection by Medicaid auditors by fabricating records to support billed services. 

“The weight of the evidence against (Mr. Harron) is very strong, also pointing toward detention. The fraudulent billings to NC Medicaid were carried out by the defendant's wife and codefendant using a Medicaid provider owned and controlled by her.”

Higdon wrote Mrs. Harron admitted to the fraudulent billings described in the superseding indictment going back as far as 2011. 

The bulk of the fraudulent billings were transmitted from the corporate headquarters of Mr. Harron’s company, Assured Healthcare Services, which was based in Ahoskie. He was listed as the president of the company.  “Although (Mr. Harron) publicly projected the success of Assured on the internet, such that he and (Mrs. Harron) purchased a corporate jet in the name of the company, in reality the company had no real revenue. Instead, the company, and all of (Mr. Harron’s) lavish expenses and travels were funded by (Mrs. Harron’s) fraudulent billings to NC Medicaid,” Higdon wrote. “The defendants received all of the money derived from the fraud, which exceeded $13 million. Despite (Mrs. Harron’s) effort to obstruct justice by attempting to exculpate (her husband), voluminous forensic and physical evidence demonstrates (Mr. Harron’s) direct involvement in the fraudulent billings to NC Medicaid.”

That evidence, Higdon notes, is as follows:

Handwritten notations found in an around his computer and office containing the names, personal identifiers, and funeral homes associated with numerous deceased children and elderly North Carolina Medicaid victims

Text communications between him and his wife pertaining to his acquisition of new North Carolina Medicaid victims

His computer browser history showing his systematic searches for North Carolina victims to use for fraudulent billings to NC Medicaid

History and characteristics

Higdon wrote Mr. Harron’s history and characteristics also counsel that detention is warranted.

“The defendant has committed prior federal wire fraud and money laundering offenses, and once again stands charged with wire fraud and money laundering. Of particular significance is the fact that the defendant's last scheme involved the use of aliases and nominees to carry out the fraud without detection. Now, the defendant has managed to carry out an even bigger fraud, once again using fraudulent information and corporate nominees to defraud North Carolina Medicaid, and to attempt to carry out the same fraud upon other state Medicaid programs.”

The defendant also has numerous other convictions demonstrating his propensity to continue to commit crimes, Higdon said. “The defendant's character demonstrates that he cannot be trusted to abide by conditions of release. In the course of the offense, the defendant has already been entrusted by the United States government and the state of North Carolina to only bill for services that were actually rendered. Here, the defendant, as president of a Medicaid provider, abused that trust in an egregious fashion, by first concealing his involvement with Assured and Agape — which was based in Roanoke Rapids — including concealing his prior federal conviction, and then participating in fraudulent billings to the government. These facts demonstrate that (Mr. Harron) cannot be trusted to abide by any conditions of release this court could impose.”

The United States attorney also noted the defendant's living situation presents a risk of nonappearance. “The defendant resides alone in Las Vegas with no minors to support. He has no job, and nothing of substance to tie him to his home — let alone to the Eastern District of North Carolina, where he must appear on the charges. Evidence reflects that the defendant may have a substance abuse problem. During the search of the defendant's residence, agents witnessed significant quantities of marijuana and paraphernalia.”

The defendant poses a serious risk of flight or nonappearance, Higdon said. “The defendant faces a significant period of incarceration — with statutory maximums totaling more than 30 years, which would effectively be a life sentence for (Mr. Harron) by age. The advisory guideline in this case … exceeds twenty years, placing him into his 80s if convicted. In sum, the looming threat of a significant period of incarceration provides a strong incentive to flee. The full extent of this threat was not presented to (Mr. Harron) prior to his arrest.”

Fled to Mexico

Higdon wrote Mr. Harron has made admissions to witnesses that in connection with prior criminal investigations, that he fled to Mexico. “Upon information, (he) was arrested at the Mexican border. The defendant not only owns a private jet — now seized — but also has contacts with various private pilots and jets that he has utilized for various travels around the country and the world.” 

The defendant and his wife extracted more than $13 Million from the scheme. “While numerous of these assets have been seized, there is no way that the government can account for all proceeds of the crime,” Higdon wrote. “Any of these proceeds, the location of which is known only to the defendants, could be used to abscond or fail to appear. The investigation shows that the defendant has extracted at least half of a million dollars from the scheme in cash, and that some of this case was laundered through casinos. The location of this cash is also unknown to investigators.”

Mr. Harron has extensive domestic and foreign travel, including travel to Bora Bora, the Dominican Republic and various other locations. “The evidence reflects the defendant's knowledge concerning how to continue and carry out the fraud offense while travelling abroad.”

From his prior federal offense, the defendant possesses significant ties to organized crime in, among other places, Europe, Higdon said. “The defendant also poses a continuing risk of economic danger and obstruction of justice. The facts of the case reveal that the defendant has the knowledge and wherewithal to continue committing the offense if released, and … has a propensity to obstruct justice to facilitate the fraud.”

For the last two years, the attorney said the defendant and his wife have been carrying out the fraud upon NC Medicaid through the guise of another corporate entity — Assured Healthcare Systems. “The defendant, having carried out the fraud for an extensive period, has the knowledge and wherewithal to utilize corporate nominees to resume the fraudulent business practices in alternate names. Indeed, the evidence establishes that Assured was created to transition the fraud from a prior Medicaid provider into a new corporate shell. 

“The evidence reflects (Mr. Harron’s) desire to expand the fraud operation to various other states, including Nevada, Connecticut, Virginia, and Florida. As such, the defendant has the wherewithal, and demonstrated propensity, to carry out the fraud in the name of others in perpetuity. This activity would generate untold sums of cash that could be utilized to facilitate flight or nonappearance.”

The scope of the fraud, Higdon argued in the motion —  more than $10 million in just two years — demonstrates the extent of the risk posed by the defendant's release. “The defendant has also demonstrated knowledge of how to utilize the identities of others to avoid detection for the fraud. The defendant could easily engage in this conduct again to avoid detection, and to continue engaging in the fraud.”

Risk of obstruction

The defendant also poses a risk of obstruction of justice, Higdon said. “The instant charges include the criminal conduct of falsifying documents to thwart detection by Medicaid auditors to permit the defendants to continue carrying out the fraud. As much as a million in fraudulent charges occurred even after the defendants thwarted auditors.”

In his prior federal fraud case, Mr. Harron directed scheme participants to destroy evidence to avoid prosecution. “Lastly, the evidence reflects that (Mr. Harron) lied to the United States Probation Office in Las Vegas as they attempted to assess (his) financial picture and circumstances. In particular, the defendant represented that he had been unemployed since 2014, and that he had a total of $10,000 in savings. Numerous witnesses, internet videos, and other evidence show that since 2018, the defendant was the president of Assured Healthcare Systems, the corporate shell that the defendants used to carry out the fraud. 

“The defendant's company received millions in fraud proceeds. The defendant purchased a private jet with his company. This flagrant lie to the court in Las Vegas demonstrates not only a propensity to obstruct justice, but that he cannot be trusted to abide by any release conditions that the court imposes.”

Finally, Higdon wrote, “The ongoing, serious risks of fraud, flight, and obstruction in this case are such that they cannot be reasonably prevented by any condition or combination of conditions this court could impose.”

In laying out that argument Higdon noted the defendant's offense is one which can be, and was, carried out on phones and computers connected to the internet from locations all around the world. “If the defendant can carry out the fraud from Tahiti or Santo Domingo, as occurred in this case, then he continues to be capable of performing it if left alone in his home in Nevada. As such, no condition, including electronic monitoring, can reasonably assure the future economic safety of the public under the circumstances of this case. 

“Likewise, there is no form of electronic monitoring available under the circumstances that would reasonably prevent the defendant's escape, should he choose to travel on his own recognizance across the United States, to appear for proceedings in the Eastern District of North Carolina where he faces what is tantamount to a life sentence.”

Higdon ended the motion saying, “The evidence, including the defendant's fabrication of records, lies to Medicaid programs, and lies to the court, reflect that he is not worthy of the court's trust.”