Feds raid former state lawmaker's business

MISSION — Federal and state investigators raided a healthcare agency Thursday belonging to former state Rep. Sergio Muñoz Sr., who serves as president of the Texas Healthcare Advocacy Association.

More than a dozen FBI agents and Texas Attorney General’s investigators executed a search warrant at Hosanna Health Care, 1001 N. Conway Ave., starting about 9 a.m. Thursday.

Agents with the Health and Human Services Department’s Office of the Inspector General, which is the largest such office of any department in the federal government, also assisted with the raid.

Though he could not provide details of a pending investigation, FBI spokesman Erik Vasys confirmed the bureau was conducting “a regular and usual investigative activity” with other agencies.

Muñoz Sr. is the father of current District 36 state Rep. Sergio Muñoz Jr., though the younger Muñoz does not appear to have any direct ties to his father’s raided business.

No unsealed criminal complaints, warrants or other court documents detailing the company or Muñoz Sr. had been filed in U.S. District Court in McAllen on Thursday.

The former state lawmaker, who served in the Texas House from 1993 to 1997, hung up when The Monitor reached him on the telephone late Thursday. His lawyer could not be reached for comment.

Raids at home healthcare agencies typically stem from investigations surrounding Medicare, the federal insurance program for seniors and low-income residents, or Medicaid, a joint federal-state program covering care for the poor.

The feds have scrutinized several local home healthcare companies for reportedly collecting millions of dollars in extra reimbursements from the government.

“It’s more common than people think,” said David C. Warner, a professor at the University of Texas at Austin’s LBJ School of Public Affairs. “And there are always blatant cases that come out every once in a while.”

He has conducted research and published studies on health insurance options and said random audits and whistleblowers, both in and outside a suspect company, can lead the federal government to investigate dubious accounting.

Warner also suggested investigators may simply be looking into past-due taxes or perhaps money laundering.

The latter is “pretty common, too, though in the health system maybe less so,” he said.

Texas Secretary of State filings show Muñoz Sr. operates several healthcare agencies throughout South Texas, including Allegiance Health Care Inc., which is housed yards away to the west of Hosanna Health Care on Tom Landry Street.

Thursday was not the first time rumors of questionable business practices have swirled around Muñoz Sr.

Several of his political opponents during a La Joya school board race in fall 2010 distributed fliers that caricatured the former lawmaker as a rat guilty of insurance fraud.

Muñoz Sr. sued the school board candidates and their supporters, accusing them of libel. No progress on that case has been made in the 275th state District Court since May 2011.

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Neal Morton covers education and general assignments for The Monitor. He can be reached at nmorton@themonitor.com and (956) 683-4472.

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November 2010: Failed La Joya candidates face libel suit