Former VA Psychologist Charged With Submitting False Medical Documents to Employer, Obstruction of Justice, Medicare Fraud

Benton, Ill. – A federal grand jury in Benton, Illinois, returned a six-count indictment charging Theresa Kelly, 56, of Herrin, Illinois, with engaging in a scheme to seek approved medical leave and reasonable accommodations from her former employer without valid documentation. Kelly was also charged with submitting false medical documents in connection with a 2020 lawsuit against the VA, as well as a scheme to bill Medicare for services that she did not provide at a Southern Illinois nursing home.

Kelly, a licensed clinical psychologist, was employed by the VA at its medical center in Marion, Illinois. According to court documents, between November 2016 and August 2020, Kelly submitted fraudulent medical documentation in the name of real and fake medical providers as part of the approval process for reasonable accommodations and medical leave, including FMLA leave.

The indictment alleges that Kelly provided the VA with letters and documentation purportedly from a “Dr. K. William Dixon” and “Amy J. Aron, Ph.D.” that detailed those providers’ alleged treatment of Kelly. Investigators later determined that there were no medical providers by the name of “Dr. K. William Dixon” or “Amy J. Aron, Ph.D.” practicing in Illinois, and that the documents submitted by Kelly were fraudulent. Kelly is also charged with submitting false medical documents that bore the forged signature of two legitimate medical providers.

“Employees who make fraudulent claims to government agencies and assistance programs for personal gain threaten the public’s trust in our systems,” said U.S. Attorney Rachelle Aud Crowe. “Committing fraud and submitting false medical documents are serious offenses, and justice will prevail for those who attempt to take advantage of taxpayer dollars.”

Kelly was charged with four counts of making false statements to the VA in connection with the false medical documents she submitted and her efforts to conceal the fraudulent nature of those documents. The indictment also alleges in December 2020, Kelly obstructed justice in a civil proceeding in federal court by submitting fraudulent medical documentation to her attorney—the contents of which were used to seek a continuance of the judicial proceeding.

“Allegations of a VA employee providing false information and obstructing justice are taken seriously by the VA OIG and will be thoroughly investigated,” said Special Agent in Charge Gregory Billingsley with the Department of Veterans Affairs Office of Inspector General’s Central Field Office. “The VA OIG thanks the US Attorney’s Office and our law enforcement partners for their efforts in this joint investigation.” 

In addition to her submission of fraudulent medical documents, the indictment alleges that between May 2016 and January 2018, Kelly engaged in a scheme to defraud Medicare and obtain payment for psychiatric services that she did not provide to residents of a Southern Illinois nursing home. In addition to her full-time job at the VA, Kelly owned a company by the name of TS Onsite Mental Health through which she claimed to provide psychotherapy sessions to patients at Shawnee Christian Nursing Center in Herrin, Illinois. According to the indictment, Kelly billed Medicare for over 400 claims—worth more than $54,000—for services that she did not provide. Kelly billed for at least some of the services on days she was on approved medical leave from the VA.

“HHS-OIG is committed to safeguarding federal health care programs from fraud and ensuring the appropriate use of taxpayer dollars,” said Curt L. Muller, Special Agent in Charge with the Department of Health and Human Services, Office of Inspector General (HHS-OIG). “We will continue to work alongside our law enforcement partners to investigate and prosecute such egregious conduct.”

An indictment is merely a formal charge against a defendant. Under the law, the defendant is presumed to be innocent of the charges until proven guilty beyond a reasonable doubt to the satisfaction of a jury.

Kelly is scheduled to appear on Monday, Dec. 19, 2022 for her arraignment before United States Magistrate Judge Reona J. Daly at the federal courthouse in Benton. If convicted, Kelly faces a maximum of 10 years in prison and fines up to $250,000. Kelly could also be ordered to repay the government for her fraudulent billing of Medicare.  

The investigation was conducted by investigators with the VA-OIG and HHS-OIG. Assistant U.S. Attorney Zoe J. Gross is prosecuting the case.