Richard H. Deane, Jr., United States Attorney for the Northern District of Georgia; Thurbert E. Baker, Attorney General for the State of Georgia; Ira T. Carle, Postal Inspector in Charge, U. S. Postal Inspection Service; Andre Martin, Chief, Criminal Investigation Division, Internal Revenue Service; Claude Vickers, State Auditor, State of Georgia Department of Audits; and Milton E. Nix, Director, Georgia Bureau of Investigation, announced that Bobby Johnson, age 45, and Larry Glen Hunt, 52, both of Lithonia, Georgia, were sentenced today on charges of submitting false documents to the government and tax fraud. Johnson was sentenced to 50 months of confinement and was ordered to pay $5 million in restitution and $70,000 in criminal fines. Hunt was sentenced to 36 months of incarceration and was ordered to pay $1.5 million in restitution and $70,000 in criminal fines. Both defendants were also ordered to serve three years of supervised release upon completion of their confinement and were ordered to complete 200 hours of community service. Pursuant to plea agreements entered into by both defendants, the men also agreed to the forfeiture of an additional approximately $3 million in assets seized by the government in the course of the investigation.

On October 1, 1998, following a trial on numerous charges relating to a $9.5 million Medicaid fraud scheme, Johnson and Hunt were found guilty on charges of submitting false documents. A mistrial was declared after the jury deadlocked on a number of charges. A second trial proved unnecessary after both defendants agreed to enter guilty pleas prior to today's sentencings.

The evidence at trial showed that from the late 1980s through May 1996, Bobby Johnson and codefendant Larry Glen Hunt conspired to defraud the Medicaid program, which is jointly funded by the United States and the State of Georgia, of approximately $9.5 million. According to evidence presented at trial, Johnson operated three nursing homes in Georgia: Camilla Street Nursing Home in Atlanta, Pecan Manor Nursing Home in Statesboro, and Macon Memorial Intermediate Care Home in Macon. Hunt owned an entity called L. G. Hunt & Associates, Inc., doing business as Eldercare, which held contracts with the nursing homes to provide nursing services. The scheme came under investigation in 1996 when State of Georgia auditors noticed during a routine audit of Johnson's nursing homes that the homes were paying inflated contract payments to Eldercare. It was during this audit, the evidence showed at trial, that both Johnson and Hunt submitted false documents in an effort to mislead the auditors. Subsequent investigation revealed that Johnson had defrauded Medicaid through the submission to Medicaid of fraudulent cost reports for his three nursing homes. The evidence showed that millions of dollars allegedly paid to Eldercare were in fact diverted to Johnson and Hunt through a complex series of financial transactions. The tax fraud charges involved unreported income and false business deductions related to the Medicaid fraud scheme.

The evidence at trial also showed that in late 1995 Johnson was a co-founder and chief financial officer of the American Basketball League. He terminated his relationship with the ABL in 1996.

This case was investigated by auditors from the State of Georgia Department of Audits and criminal investigators with the United States Postal Inspection Service, Internal Revenue Service and the Georgia Bureau of Investigation.

Assistant United States Attorney Michael J. O'Leary and Georgia Assistant Attorney General Scott A. Smeal (designated as a Special Assistant U.S. Attorney) prosecuted the case.