Little Rock Psychologist Indicted in Expansive Medicare and Blue Cross Fraud Scheme
Federal Grand Jury Returns Multi-Count Indictment
A federal grand jury in Little Rock returned a sweeping indictment in late November 2025 against psychologist Krameelah Banks, charging her with 23 counts of wire fraud, seven counts of making false statements in connection with health care matters, and additional counts tied to obstructing a federal investigation. Prosecutors allege that Banks orchestrated a multi-year scheme to defraud Medicare and Blue Cross Blue Shield, resulting in more than $500,000 in fraudulent billings. The U.S. Attorney’s Office and HHS-OIG announced the charges following a multi-agency investigation that began earlier this year after insurers flagged unusual billing patterns.
Allegations of Fabricated Treatment and Fictitious Records
The indictment outlines an extensive pattern of alleged falsification, asserting that Banks generated treatment encounters for patients she never saw and billed for psychological services that federal investigators say are impossible to reconcile with appointment logs, patient histories, or documented care plans. Prosecutors claim that many of the submitted claims corresponded to dates when Banks was not in the clinic, was already scheduled with other patients, or had billed for overlapping services in multiple locations.
According to investigators, the false documentation included detailed progress notes, summaries of therapeutic interventions, treatment plan updates, and diagnostic observations—all allegedly written after the fact to support claims for visits that never occurred. In several instances, the indictment states that Banks created “cut-and-paste” notes repeated across multiple patients, and in others, she allegedly inserted descriptions of therapy sessions that contradicted patients’ own statements about when and whether they had interacted with her.
Federal investigators also allege that Banks fabricated supervisory attestations and time-based CPT code justifications, inserting session lengths and modalities that they say had no basis in clinical reality. The indictment suggests that the volume and specificity of these notes were intended to give the appearance of routine, legitimate care, even as the underlying claims data showed what prosecutors described as a “mathematically impossible” level of productivity across multiple years.
Pattern of Billing Irregularities and Financial Losses
Charging documents highlight irregularities such as claims for back-to-back psychotherapy sessions billed in increments that exceeded the total hours available in a workday. Investigators identified instances in which Banks billed more than 20 hours of therapy in a single day, submitted claims for sessions overlapping with other appointments, and recorded services during periods when she was traveling or not present in the office. Prosecutors estimate federal and commercial insurers paid over half a million dollars on these claims, though they note that additional losses may still be uncovered as the review continues.
False Statements and Alleged Lying to Investigators
Beyond the billing allegations, the indictment includes several counts tied to false statements made during interviews with federal agents. Prosecutors say that when investigators initially questioned Banks about irregularities, she insisted that every billed session had been delivered and that all documentation reflected real clinical encounters. According to federal authorities, those claims conflicted sharply with patient interviews, scheduling records, and EHR access logs.
Investigators assert that Banks provided explanations that later proved inconsistent, including claims that patients had received services off-site, outside regular scheduling systems, or through undocumented telehealth encounters. The indictment notes that these accounts changed multiple times as investigators presented additional evidence.
Federal agents allege that Banks also denied altering or backdating patient records, despite metadata showing time stamps that prosecutors say contradict her statements. The indictment points to these alleged misrepresentations as deliberate efforts to “impede, obstruct, and mislead” the investigation, adding additional criminal exposure beyond the fraud counts themselves.
Potential Penalties and Next Steps in the Case
Banks was taken into custody following the unsealing of the indictment and later released on bond under standard pretrial supervision. She is scheduled for arraignment in federal court, where she is expected to enter a plea. If convicted on all counts, she faces substantial prison time, mandatory restitution, fines, and likely exclusion from federal health care programs. Prosecutors emphasized that the indictment contains allegations, and Banks is presumed innocent unless proven guilty. A trial date has not yet been set, and investigators indicate that review of additional billing data is ongoing.
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