Guilty plea in multimillion-dollar medical fraud scam

A Texas man who was part of a long-term fraud scheme in which conspirators pretended to work for Cerner Corp. pleaded guilty Wednesday in federal court in Kansas City.

David Tayce admitted that he was part of the group that beginning in 2008 set up a web of businesses and impersonated employees of the Kansas City-based health information technology company to solicit investors, conduct business transactions and manipulate court proceedings, according to documents filed Wednesday by federal prosecutors.

The conspirators used “Cerner Corporation’s reputation and standing in the medical field to manipulate business transactions and court proceedings in their favor,” according to a plea agreement filed Wednesday in Tayce’s case.

Tayce, 66, of Lucas, Texas, pleaded guilty to a count of conspiracy to commit wire fraud that carries a maximum sentence of 20 years in prison. A lawyer for Tayce couldn’t be reached for comment.

One of the fraudulent schemes perpetrated during the conspiracy was the sale of an MRI system to a Dallas hospital for $1.3 million.

Prosecutors allege that the conspiracy was led by 54-year-old Albert Davis of Richardson, Texas, who was indicted by a federal grand jury in Kansas City earlier this year.

According to court documents filed by prosecutors, Davis contacted hospital officials and claimed to be working with Cerner to sell a state-of-the-art MRI system.

Conspirators created a web of forged documents, bank accounts and Internet domains to convince the hospital that they were legitimate Cerner representatives, according to court documents.

They created a business entity named Cerner LLC, using a Kansas City address, opened a bank account for Cerner LLC and registered the online domain cernerinc.com, according to the documents.

“As a part of this conspiracy, Tayce admits that he, Albert Davis and others developed a scheme to use fictitious employees from Cerner Corporation to communicate with others,” the plea agreement states.

The fraudulent information was used to solicit money from investors, secure bank loans and win judgments in several civil lawsuits concerning their business transactions, according to the court documents.

In the case involving the MRI sale to the Texas hospital, conspirators created phony Cerner invoices, and two payments totaling more that $1 million were wired by the hospital to a phony Cerner bank account before the scheme was uncovered, according to court documents.

The FBI began investigating after the hospital contacted Cerner to help with installation of the system and learned that the company had nothing to do with the deal.

Tayce was allowed to remain free on bond pending sentencing.

This story was originally published November 4, 2015 at 5:10 PM with the headline "Guilty plea in multimillion-dollar medical fraud scam."