By JOHN McCARTHY / V.I. Free Press News Reporter
ST. THOMAS — The Virgin Islands Department of Justice (DOJ) has launched a massive civil lawsuit under the Virgin Islands False Claims Act against a local services company and three individuals, alleging a multi-year scheme that billed the territory’s Medicaid program millions of dollars for un-licensed behavioral health services provided to children.
V.I. Attorney General Gordon C. Rhea announced Tuesday that the DOJ’s Medicaid Fraud Control Unit (MFCU) has filed a lawsuit against RTS Services Unlimited 11, LLC (“RTS”), Melinda Richards, Ashley Doway, and Duane Robinson.
The state-level investigation exposed an alleged operation where standard after-school and summer camp activities—like homework help, tutoring, and snacks—were fraudulently billed to public health funds as clinical psychotherapy, hypnotherapy, and counseling.
The Numbers: $3.9 Million in Fraudulent Claims
According to the official complaint, an exhaustive MFCU investigation reviewed years of provider enrollment data, financial records, and witness statements.
The data revealed that between January 2020 and January 2026, RTS submitted claims to the Virgin Islands Medicaid Program totaling an astronomical $3,912,551.57. Out of those claims, the company successfully received $408,410.90 in public Medicaid payments.
The DOJ alleges that while RTS and Melinda Richards held basic administrative licenses for testing, evaluation, and consultation, none of the defendants possessed the necessary clinical credentials required under Virgin Islands law to independently provide, supervise, or bill for therapeutic behavioral health services.
Target: Vulnerable Children
The lawsuit takes a severe tone regarding the nature of the alleged deception. The DOJ claims that Richards, Doway, and Robinson directly provided behavioral health services to Medicaid beneficiaries—primarily children with acute behavioral and mental health needs—despite lacking the required medical and therapeutic licenses.
Furthermore, RTS allegedly utilized its affiliated non-profit organization, Passport2 Prosperity, Inc., to advertise after-school and summer enrichment programs. Because Medicaid strictly prohibits reimbursement for standard after-school care, homework assistance, or camp transportation, the defendants allegedly masked these recreational services as clinical psychotherapy to improperly capture public funds.
“Vulnerable populations, such as children who require behavioral health services, deserve to be treated by qualified clinicians,” Attorney General Rhea stated. “The allegations in this complaint involve the submission of claims for services that… were provided by individuals who lacked the licenses required under Virgin Islands law… We will continue to pursue fraud, waste, and abuse wherever it occurs.”
High Stakes and Federal Backing
The lawsuit is seeking heavy civil penalties, restitution, damages, attorney’s fees, and the complete disgorgement of all improperly obtained Medicaid funds under the False Claims Act.
The territory’s Medicaid Fraud Control Unit, which operates with 100 percent funding from the U.S. Department of Health and Human Services (HHS-OIG), credited the HHS-OIG San Juan Office and the DOJ Civil Division for their extensive operational assistance in cracking the case.
The DOJ notes that the entire investigation originated from a crucial external referral received by the Office of the Solicitor General in 2024, highlighting the power of public whistleblowers. Anyone with information regarding suspected healthcare fraud or patient exploitation is encouraged to contact the V.I. Medicaid Fraud Control Unit at (340) 774-5666 or (888) 404-MFCU (6328).
