The Atlanta Journal and Constitution

August 12, 1998, Wednesday, ALL EDITIONS

Doctor pleads guilty in scam;
Medicaid taken for $ 6.6 million

BYLINE: Bill Rankin

SECTION: LOCAL NEWS; Pg. 01D; Pg. 01D

LENGTH: 413 words

A psychiatrist who bilked the state out of millions of dollars by charging for unprovided medical services for impoverished Atlanta children pleaded guilty Tuesday.
James McClendon, 49, admitted to conspiring to defraud the state in one of the biggest Medicaid scams in Georgia history: $ 6.6 million. For illegally targeting impoverished Atlanta children and billing for medical services that were never provided, McClendon will be sentenced in October and faces a maximum prison term of 45 years and a fine of $ 13.2 million.
Before formally entering his plea before U.S. District Judge Clarence Cooper, McClendon halted the proceeding to confer several minutes with his attorneys, his head bowed in deep concentration as he slowly scratched his mustache.
His attorney, Herbert Adams, finally told Cooper that McClendon “substantially agrees” to the charges against him although he “disagrees with some of the characterizations.” Cooper then accepted McClendon’s plea to one count of conspiracy and four counts of laundering checks totaling more than $ 213,000 in payments from the state Medicaid program.
McClendon’s guilty plea wraps up a three-year investigation by state and federal agencies into a Medicaid scam that led to convictions of two McClendon co-conspirators: Atlanta businessman James Fletcher and psychologist Donnie Watson.
In outlining the case, Assistant U.S. Attorney Nicolette Templer said McClendon operated nine clinics in the metro area and submitted $ 8.6 million in Medicaid billings in just a 14-month period, between January 1994 and July 1995.
McClendon and his employees solicited clients from impoverished neighborhoods by distributing fliers to area schools. When parents enrolled their children, they believed they were placing the youths in after-school and summer camp programs.
But none of the parents interviewed by investigators knew that McClendon was billing for psychotherapy sessions that were almost never provided to the youths, and none had even heard of McClendon, Templer said. When McClendon’s employees determined that some of the children may actually require psychotherapy and made the referrals to McClendon, “nothing was done about it,” Templer said.
McClendon also submitted billings for a type of psychotherapy that required one-on-one sessions with his patients, when in fact he was often out of the country in places such as London, Paris, St. Croix and Bermuda, the federal prosecutor said.