A former official with the hospice care company Amedisys pleaded guilty to wire fraud after being accused of using a fake film tax credit scheme to divert more than $7.6 million from the company to his personal bank accounts.
Michael David Pitts, 41, was the vice president of tax for Amedisys from January 2005 to July 2014 and used his position to defraud the company from October 2006 to May 2014, U.S. Attorney Walt Green said in a Thursday news release.
Pitts was responsible for all corporate tax matters for Amedisys and had the ability to purchase tax credits for the purpose of reducing and paying state income taxes in the places where the company operated, Green said.
To carry out the money scheme, Pitts used shell corporations — Evergreen Incentives and Stonehenge Entertainment — to sell fake tax credits to Amedisys, he said. Pitts maintained a bank account for each of the fictitious businesses at Capital One Bank and Regions Bank. The factual basis in the case says Pitts claimed to have used tax credits in Louisiana, Georgia, Michigan and Oklahoma.
He presented false film tax credit transfer agreements to his supervisors for approval and then purchased the credits on behalf of Amedisys and personally collected the amount Amedisys paid for them, Green said.
Pitts made electronic bank transfers to divert funds from an Amedisys account at JPMorgan Chase Bank to his accounts at Capital One Bank and Regions Bank, in order to personally benefit from the fake tax credits to Amedisys, Green said.
Over a period of nearly eight years, Pitts had Amedisys make 21 wire transfers totaling $7,641,528 to his own accounts.
Amedisys provides home health and hospice services to about 380,000 patients across 37 states, the District of Columbia and Puerto Rico, Green said.
The company filed a lawsuit in state court in November against Pitts to have him return the money he stole. According to the lawsuit, Pitts was taking out hundreds of thousands of dollars at a time and wiring it to his bank accounts.
Glen Peterson, Pitts’ attorney, said the civil case is ongoing but expects lawyers on both sides will not have much left to do as a result of the recent guilty plea in district court.
“We’re working toward a mutually agreeable conclusion in short fashion,” Peterson said. “It’s kind of obvious that pleading guilty will have a bearing on the civil case.”
Pitts’ guilty plea to one count of wire fraud carries a maximum penalty of 20 years imprisonment, a fine of $250,000 or twice the gross amount of money gained from the offense, Green said. He is also subject to forfeit the $7.6 million proceeds from the wire fraud offense.
A sentencing date has not been set, Green said.
The Baton Rouge FBI office handled the investigation, and Assistant U.S. Attorney René Salomon is prosecuting the case.