A few days after state agents searched a home of Eric Leak, a former N.C. State football player suspected of Medicaid fraud, the top federal prosecutor for the Middle District of North Carolina asked the court to halt further searches and seizure of property while a criminal investigation continued.
Ripley Rand, the U.S. attorney for the Middle District, said in a court motion filed Friday that such actions could affect the “ongoing criminal investigation” of Leak and his wife, Emily.
Leak is being investigated for possible Medicaid fraud involving one of his businesses, Nature’s Reflections, a mental health services provider. According to court documents, the business may have falsely billed Medicaid for $8.7 million from 2012 to 2014. Court documents show investigators think he used the money to pay for homes, cars and other property.
No criminal charges have been filed against Eric or Emily Leak. Neither could be reached for comment.
In March, agents from the State Bureau of Investigation and the Secretary of State’s office were involved in the search of the Leaks’ townhouse in Raleigh. Last week, agents from the Health and Human Services Office of the Inspector General again searched the townhouse.
Leak, 37, has an 8,200-square-foot house on Stone Kirk Drive in North Raleigh that has a property tax value of $1.65 million. Agents also have searched that home.
The prosecutor said in his motion that the government wanted to pursue “settlement negotiations” with Leak’s counsel and sell some properties to recoup money owed.
Eric Leak’s attorney, Wes Camden of Raleigh, said he could not comment on the status of the investigation or a possible resolution, saying, “I don’t have anything to add that would be helpful.”
An Internal Revenue Service document from November 2015 said the investigation by the IRS and Medicaid Investigations Division showed that Nature’s Reflections improperly billed Medicaid for $6.2 million in 2012, $2.4 million in 2013 and $26,000 in 2014.
The IRS document said there was probable cause to believe the Leaks engaged in, and caused others to engage in, “criminal acts.” Among them: using Medicaid Identification Numbers of Medicaid recipients without their consent; billing Medicaid recipients using a physician’s signature without the physician’s authorization; and obtaining Medicaid recipient identification numbers under the guise of providing after-school programs but for the purpose of submitting fraudulent claims.
The IRS report said there was probable cause to believe the Leaks “engaged in violations of various federal laws.”
The IRS interviewed several Medicaid recipients who had dealings with Nature’s Reflections. In one instance, the business billed Medicaid for more than $31,000 covering 212 dates of service. The parent of the Medicaid recipient said Nature’s Reflections representatives made 10 home visits that included “trips to the movies, a trip to a back-to-school event, and sitting on the couch watching cartoons.”
The IRS report said the interviews demonstrated a “pervasive scheme” to defraud Medicaid.
Court documents say Eric Leak moved more than $200,000 to his sports management company, Hot Shot Sports, between 2012 and 2014. In addition, more than $212,000 was used to make mortgage payments, pay property taxes and make renovations to the Stone Kirk Drive house, the documents said. A $50,000 pool also was installed.
In a 2015 search of his home, four vehicles connected to Leak and his wife were in the seizure warrant. Documents say a 2013 Porsche valued at more than $137,000 was purchased for former N.C. State basketball player C.J. Leslie.
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 Leslie and Tracy Smith, another former Wolfpack basketball player.
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 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.