BANGOR – Dana McGovern, whose Calais-based ambulance company served parts of Washington and Hancock counties for nine years, changed his plea in federal court Wednesday to guilty on 40 counts of fraud, money laundering and other charges related to his billing practices.

He originally pleaded not guilty to a 214-count federal indictment handed up last spring.

McGovern, 38, pleaded guilty to 20 counts of Medicare and Medicaid fraud, 16 counts of money laundering and two counts of obstructing a federal audit. Two final counts order the forfeiture of McGovern’s Ambulance Service Inc., the other defendant in the case, to make up for Medicare and Medicaid losses that total $891,492.

McGovern remains free on $50,000 bond pending sentencing. He now lives in Florida with his wife and four children and recently resigned from a health care position there, according to his attorney, Leonard Sharon of Auburn.

McGovern’s home in Florida will not be seized. A lien exists on the facility that is equal to its value, according to the U.S. Attorney’s Office.

News of the downturn at McGovern’s Ambulance Service about a year ago shocked Down East residents who had depended on the service for years. The area now is served by a quasi-municipal agency funded by many communities and called Downeast EMS.

Portrayed by his attorney as a man who basically meant well and who did a lot of good in the community, McGovern faced U.S. District Judge George Z. Singal at Wednesday’s change-of-plea hearing.

Dressed in a white shirt, tie and dark pants, McGovern, who has lost a significant amount of weight, responded to a question posed by the judge, saying he was seeing a physician for stress-related problems. Singal determined McGovern was not on medication that would decrease his understanding of the legal proceeding and allowed the change of plea.

The remaining 174 counts will be dismissed at sentencing which will take place in a few months pending completion of a pre-sentence report.

Court documents reveal that the case against McGovern and his ambulance company arose from a complaint filed by an elderly Medicare patient in Lubec after the Ice Storm of 1998. The woman told Medicare she was taken to a shelter during the ice storm, not a hospital as indicated on the claim, and that she was transported in the ambulance with three other patients.

Further investigation revealed a variety of billing irregularities. For example, a number of counts involve a dialysis patient from Lubec who was taken to Bangor three times a week for several years. Though the patient frequently was transported in a wheelchair van, claims were submitted to Medicare for more expensive ambulance transportation.

In addition, employees of McGovern’s Ambulance Service falsely completed ambulance run sheets for these trips. The total of alleged fraudulent claims for this one patient is $390,877, according to a court document.

The investigation also revealed that McGovern’s Ambulance Service Inc. billed Medicare for transports to the hospital, which are reimbursable, when patients actually were taken to doctors’ offices, trips that are not reimbursable.

Medicare and Medicaid were billed for more miles than patients actually were transported, advanced life support was billed but not provided, and individuals were taken by ambulance when it was not medically necessary.

At one time, McGovern had an ambulance and driver take him to a Bangor hospital for a vasectomy, then drive him home after the procedure. He billed his insurance company for the ride.

According to court documents, Dana McGovern personally determined the charges for each ambulance transport. At times, the ambulance run sheets were sent to him in Florida for pricing.

The investigation also revealed discrepancies in Medicaid claims for wheelchair van services, including billing for more miles than the patients actually traveled, billing transports for nonmedical purposes, and billing for an individual who was not wheelchair-bound. The defendants also allegedly provided altered or false documentation to Medicare and Medicaid auditors.

None of McGovern’s family members was present for the hearing. At its conclusion, he hugged the weeping wife of Calais attorney Dan Lacasse, a lawyer for the ambulance company, before walking out of the courtroom.