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Former Texas hospital chief's fraud trial to begin

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TYLER, Texas (AP) — Hospitals operated by a Dallas businessman improperly billed Medicare 80 percent of the time and continued the fraudulent billing even after being warned by government auditors, prosecutors contend in federal court records.

Details of the prosecution's case against Dr. Tariq Mahmood were disclosed in the recent court filings. Mahmood's trial on charges of fraud conspiracy began Friday with jury selection and will continue this week in Tyler.

Federal indictments say he conspired to submit more than $1.1 million in false billings to enrich himself even as his hospitals in East Texas and elsewhere lacked funding to operate effectively, The Dallas Morning News reported (http://bit.ly/1u859HZ ).

Mahmood has pleaded not guilty to health care-billing fraud and aggravated identity theft counts. He faces more than two decades in prison if convicted on all 15 fraud counts.

Mahmood's attorneys have sought in pretrial motions to block an audit from being used as evidence. They also want to omit details of his hospitals' poor conditions and his lifestyle — he owns a 10,000-square-foot gated estate and has been driven to court hearings in a Mercedes.

"When this evidence is coupled with witness testimony that the defendant was directing individuals to submit fraudulently changed codes, it proves the existence of the defendant's scheme to defraud Medicare," according to a motion filed by the U.S. attorney's office.

Attorneys for both sides declined to comment.

The trial marks the first major proceeding in a series of criminal and civil legal actions against Mahmood and his former hospital chain. At least eight government agencies have been drawn into investigations of financial mismanagement and patient care at Mahmood's facilities. His six rural hospitals are now closed or struggling under new ownership, the newspaper reported.

The fraud case against Mahmood focuses on billings at three hospitals: Renaissance Hospital Terrell, Cozby Germany Hospital in Grand Saline and Central Texas Hospital in Cameron.

A former administrator for Renaissance, Edwina Henry, told authorities that in 2008 she witnessed Mahmood opening charts of other doctors' patients and writing in them. She told investigators she thought they were fraudulent entries aimed at boosting hospital billing revenue.

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Information from: The Dallas Morning News, http://www.dallasnews.com

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