Eric Leak, a former N.C. State football player, agreed to a plea arrangement on Thursday in a Medicaid fraud case at the U.S. District Court for the Middle District of North Carolina, according to court documents.
Leak is charged with paying kickbacks and money laundering while he served as executive director of Nature's Reflections, a Durham mental health services provider from 2011-14. He faces a maximum of five years in prison and a $250,000 fine on bribery charges and 10 years in prison and $250,000 on the money laundering charge. He must also pay $420,115 in restitution.
N.C. State asked in November 2011 that Leak dissociate himself from the university for 10 years after the NCAA said Leak had provided improper benefits to basketball players C.J. Leslie and Tracy Smith.
Leslie, who received $410 of impermissible benefits, was suspended for three games in the 2011-12 basketball season.
Leak later told The News & Observer that he had contacted former N.C. State football standout David Amerson in June 2012. The university then requested that Leak not contact any other N.C. State athlete while also asking the Secretary of State’s office to determine whether Leak was violating the state’s athlete agent act.
According to an IRS document from 2015, investigations by the IRS and the Medicaid Investigations Division showed Leak engaged in a "pervasive scheme" to defraud North Carolina's Medicaid program.
In the court documents filed Thursday in relation to Leak's agreement to plead guilty, U.S. Attorney Matthew Martin describes the scheme that began in 2011. Witness Carlos Brown, who also faces federal charges, said he recruited patients for Nature's Reflections and, in turn, received a portion of the payment the company received from Medicaid.
Between October 2011 and March 2013, Brown received $393,000 from Nature's Reflections for his referrals.
The government also has two other witnesses, referenced only by their initials in Thursday's documents, who can testify they had agreements with Leak to provide patients in return for payments. In 2013, Nature's Reflections paid one witness $18,655 for referrals and the other $8,450.
Federal law prohibits payments for referrals in relation with federals programs such as Medicaid.
The 2015 IRS documents say Leak illegally obtained $8.7 million in Medicaid funds through Nature's Reflections from 2012-14 and then siphoned more than $200,000 to his sports management company, Hot Shot Sports.
That document also says Leak purchased a 2013 Porsche Panamera worth more than $137,000 for Leslie in April 2013.
A state investigation of Leak, which began in December 2013, uncovered evidence that he provided improper benefits to an unnamed University of North Carolina athlete.