California

July 7, 2010

Former EDD Employee Sentenced to 5 Years in Prison for Fraudulently Providing Disability Payments to Friends (U.S. Attorney for the Eastern District of California)

Sacramento, CA - United States Attorney Benjamin B. Wagner announced that Audrey Renee Bell, 49, of Pacoima, Calif., was sentenced on June 7, 2010, by Senior United States District Judge Lawrence K. Karlton to five years in prison to be followed by three years of supervised release, and ordered to pay $100,000 in restitution in connection with a scheme to defraud the California Employment Development Department. Bell pleaded guilty in November 2009 after the prosecutors rested their case after a two-week jury trial.

This case was the product of an extensive investigation by the State of California Employment Development Department Investigation Division. Assistant United States Attorneys Matthew Stegman and Michael Anderson prosecuted the case.

The evidence at trial showed that between July 2003 and January 2006, Bell defrauded EDD of over $110,000. EDD pays disability insurance benefits to California workers who become disabled. Bell was a “Disability Insurance Program Representative” in EDD’s Van Nuys office who reviewed and authorized payments on disability claims.

Calls to the EDD fraud hotline (800-229-6297) led to the investigation. The first call reported that an EDD employee known as “Star” had illegally given disability insurance benefits to a friend. Another anonymous caller reported that a claimant was collecting disability benefits while employed full time. The follow-up investigation revealed that both claims were handled by Bell, who goes by the nickname “Star.”

Evidence at trial showed that in order to authorize payments to her friends, Bell made entries in the EDD computer system that falsely indicated she had received the required paper documents to substantiate the claims, such as doctor’s certifications, when in fact she had not received any such documentation. These false entries caused disability benefit checks to be mailed to her friends. After the friends received the checks in the mail, Bell instructed her friends to cash the checks and meet her in locations such as parking lots and restaurants where Bell took a cut of the fraud proceeds.

At trial, a number of Bell’s friends testified against her, saying that they committed fraud with Bell, and that Bell generally took a cut of about half the money. In addition, a chiropractor testified that he would meet Bell in a post office parking lot to collect cash from Bell in exchange for certifying that Bell’s friends were disabled.

“EDD appreciates the joint partnership with the U.S. Attorney’s Office in successfully prosecuting this fraud case,” said Lisa Curtis, Chief of EDD’s Investigation Division. “Disability Insurance benefits are vitally important to Californians, and EDD actively pursues anyone who defrauds the system so benefits are preserved for those in need.”

July 2, 2010

Radiology Clinic Pays $647,000 to Resolve Lawsuit Alleging it Billed Medicare for Unneeded Tests (U.S. Attorney for the Central District of California)

Los Angeles - The company that owns Advanced Radiology of Beverly Hills has paid the federal government $647,000 to settle allegations that it filed false claims with Medicare for unnecessary radiological tests.

The settlement was paid on June 30, 2010, by The Oaks Diagnostics, Inc., dba Advanced Radiology. The payment prompted the government to ask a federal judge this morning to dismiss a civil lawsuit that alleged Advanced Radiology performed unnecessary diagnostic tests and billed Medicare for the procedures.

The United States alleged in the civil lawsuit that Advanced Radiology and its owner, Dr. Ronald Grusd, engaged in a scheme to bill Medicare for unnecessary tests performed at Advanced Radiology from 1999 through 2002. As part of the alleged scheme, an Advanced Radiology contractor recruited Medicare beneficiaries to undergo diagnostic tests such as CT scans and MRIs, even though the beneficiaries did not need the tests. That contractor – Nordelyn Lowder – pleaded guilty to one count of health care fraud in connection with the scheme. Lowder was sentenced in June 2008 to 20 months in federal prison and was ordered to pay $426,455 in restitution.

The settlement resolves allegations initially made against Advanced Radiology in a “whistleblower” lawsuit filed pursuant to the qui tam provisions of the False Claims Act, which allow a private party to file a civil action on behalf of the United States and receive a portion of the recovery. The whistleblower lawsuit was originally filed in 2003 by a former Advanced Radiology employee. The United States intervened and took over prosecution of the case in February 2008. 

Advanced Radiology paid the settlement without admitting any wrongdoing.

Dr. Grusd is not a party to the settlement, but in light of the settlement with Advanced Radiology the government has opted to dismiss the lawsuit against him.

This case was investigated by the Office of Inspector General of the Department of Health and Human Services and the Federal Bureau of Investigation.

May 26, 2010

Seventeenth Defendant Sentenced in $15 Million Medicare Fraud Scheme Targeting Elderly, Mentally Ill (U.S. Attorney for the Central District of California)

Santa Ana, CA - Concluding six years of litigation, the seventeenth and final defendant convicted in relation to a $15 million health care fraud scheme that targeted the mentally ill and elderly was sentenced to 30 months in federal prison.

Xinming Fu, 48, an Irvine physician, was sentenced on May 24, 2010, after previously pleading guilty to conspiracy to pay kickbacks and health care fraud, admitting that he was part of a scheme that bilked Medicare out of $15 million for respiratory treatments that were unnecessary, not performed in accordance with Medicare rules, or not performed at all. Fu, who was one of six medical doctors convicted in the scheme, was also ordered to pay $390,000 in restitution by United States District Judge James V. Selna.

The 17 defendants were named in a criminal information and three indictments returned by federal grand juries as far back as 2004. Three of the cases involved a scheme in which the owner of a respiratory treatment program, Herman Thomas, recruited Medicare patients who were housed at board-and-care facilities throughout Southern California. As part of the scheme, which operated from 2000 through 2006, Thomas and doctors that he recruited paid illegal kickbacks to marketers, who in turn paid illegal kickbacks to the owners and administrators of the board-and-care facilities, who provided access to mentally ill and elderly residents. On a monthly basis, the doctors ordered respiratory treatments, which typically were unnecessary and were performed by respiratory therapists on a daily or almost daily basis without any physician supervision, in violation of Medicare rules requiring that a physician be on-site when respiratory treatments are performed. The respiratory treatments also violated Medicare rules because the treatments should have been performed at a doctor’s office or in a mobile medical unit, instead of at the board-and-care facilities, where treatments were often performed in the facilities’ smoking rooms. The mentally ill and elderly residents of the board-and-care facilities were enticed to undergo the respiratory treatments with soda, candy, donuts and even cigarettes. Sometimes residents were not present at the board-and-care facilities because they were off-site receiving treatment at local hospitals, but Medicare was billed for respiratory treatments anyway.

The fourth case in this investigation arose from a respiratory therapist/marketer who previously worked for Thomas and recruited a doctor to run a separate, but similar respiratory program.

The defendants previously sentenced as a result of this investigation were:

• Dr. Aziz Awad, 47, formerly of Anaheim and Pasadena, was sentenced to 15 years in prison and ordered to pay $2,625,722 in restitution (see:  http://www.justice.gov/usao/cac/pressroom/pr2006/126.html);
• Herman Thomas, 51, of Bellflower, who was convicted at trial with Awad, was sentenced to 88 months imprisonment and ordered to pay $2,625,722 in restitution;
• Dr. Paul Arnold Lessler, 71, of West Hills, was sentenced to two years in custody and ordered to pay nearly $1.1 million in restitution after pleading guilty to conspiracy to commit health care fraud and health care fraud;
• Dr. Gershon Walter Hepner, 72, of Los Angeles, was sentenced to 30 months in custody and ordered to pay $422,400 in restitution after pleading guilty to conspiracy to commit health care fraud and pay kickbacks, and health care fraud;
• Dr. Aginah M. DeBerry, 57, of Rancho Cucamonga, was sentenced to one year in prison and ordered to pay $707,800 in restitution after pleading guilty to conspiracy to commit health care fraud and pay kickbacks;
• Glen Garcia Madrid, 46, of Yorba Linda, a marketer, was sentenced to one year in prison and ordered to pay $1,566,977 in restitution after pleading guilty to  conspiracy to pay kickbacks and health care fraud;
• Levi Raitchik, 49, of Los Angeles, a marketer, was sentenced to eight months in custody and ordered to pay  $395,100 in restitution after pleading guilty to conspiracy to pay kickbacks and health care fraud;
• Schmuel B. Fogelman, 49, of Los Angeles, a marketer, was sentenced to one year in custody and ordered to pay $693,000 in restitution after pleading guilty to conspiracy to pay kickbacks and health care fraud;
• Barbara Sue Thrash, 60, of Corona, a board-and-care administrator, was sentenced to 15 months in custody and ordered to pay $495,019.05 in restitution after pleading guilty to conspiracy to receive kickbacks and health care fraud;
• Teresita Cagudala Bolong, 62, of Rancho Palos Verdes, a board-and-care owner and administrator, was sentenced to six months in prison, ordered to pay a $17,000 fine, and ordered to pay $108,000 in restitution after pleading guilty to receiving kickbacks;
• Dr. David Todd Asher, 42, of Fullerton, was sentenced to probation and ordered to pay $6,850 in restitution after pleading guilty to conspiracy to pay kickbacks;
• Emilita Nunez Canenea, 50, of San Dimas, a board-and-care owner and administrator, was sentenced to probation, ordered to pay a $20,000 fine, and ordered to pay $18,000 in restitution after pleading guilty to receiving kickbacks;
• Shahnaz Chadorbaf-Arastoo, 54, of Irvine, a board-and-care owner and administrator, was sentenced to probation, ordered to pay a $5,000 fine, and ordered to pay $4,000 in restitution after pleading guilty to receiving kickbacks;
• Magdalena Gonzales, 57, of Denver, a board-and-care administrator, was sentenced to probation and ordered to pay $9,500 in restitution after pleading guilty to aiding and abetting a false claim
• Hamid Rafizadeh, 54, of Escondido, a board-and-care administrator, was sentenced to probation, ordered to pay a $5,000 fine, and ordered to pay $8,500 in restitution after pleading guilty to receiving kickbacks; and
• Alexander Tanciano Tagaro, 62, of Perris, a board-and-care administrator, was sentenced to probation and ordered to pay $7,500 in restitution after pleading guilty to receiving kickbacks.

These cases were the product of a joint investigation by the Federal Bureau of Investigation, the United States Postal Inspection Service, and IRS-Criminal Investigation.

May 24, 2010

California Patient Recruiter Sentenced to 12 Months in Prison for Medicare Fraud in Power Wheelchair Scam (Criminal Division)

Fresno, CA - Area patient recruiter was sentenced today to one year and one day in prison for her participation in a nearly $1 million power wheelchair fraud scheme, announced the Departments of Justice and Health and Human Services (HHS).

Maria Nela Moreno, 57, was also sentenced by U.S. District Judge John F. Walter of the Central District of California to three years of supervised release and was ordered to pay $110,000 in restitution.

On Feb. 26, 2010, a Los Angeles jury found Moreno guilty of one count of conspiracy to commit health care fraud and six counts of health care fraud. The evidence introduced at trial showed that Moreno solicited Medicare beneficiaries for expensive, high-end power wheelchairs and other medical equipment they did not need by meeting with groups of seniors and going door-to-door at low-income, senior living communities in Sanger and Parlier, Calif., near Fresno.  Several Medicare beneficiaries testified that Moreno wore a badge with her picture on it that appeared to resemble a hospital identification badge and told them she was from Medicare or another government agency.

According to the beneficiaries who testified at trial, Moreno convinced them to provide their identification cards and Medicare insurance numbers by telling the beneficiaries that they should take a power wheelchair because Medicare would soon run out of money, and the beneficiaries would not be able to get a chair in the future if they needed one.  Moreno copied the beneficiaries’ identification cards and Medicare insurance numbers with a portable scanner she carried with her. The evidence at trial showed that Moreno recruited Medicare beneficiaries for power wheelchairs they did not need at a cost to Medicare of $6,000 per power wheelchair.

Witnesses testified that at the Elderberry Apartments in Sanger, one of the locations where Moreno and her co-conspirators illegally recruited beneficiaries to receive power wheelchairs, many residents left the wheelchairs unused.  The former manager of the Elderberry Apartments testified that few, if any, of the residents actually needed the power wheelchairs. 

Witnesses testified at trial that they received beneficiary information from Moreno and provided the information to a fraudulent medical clinic in Los Angeles, which used the information to create bogus prescriptions for power wheelchairs. Witnesses testified that they purchased the fraudulent prescriptions and medical documents from the clinic, and then sold them for more than $1,000 per prescription to durable medical equipment (DME) supply companies in and around Los Angeles. Moreno was paid a kickback for each power wheelchair that the DME companies were able to fraudulently bill to Medicare using the beneficiary information Moreno obtained.

Cooper Medical Supply of Canoga Park, Calif., was one of the DME supply companies that billed Medicare using the beneficiary information obtained by Moreno. Evidence presented at trial established that between January 2006 and September 2009, Cooper Medical Supply submitted approximately $946,590 in false and fraudulent claims to Medicare, almost all of which were for power wheelchairs.  Evidence at trial also established that additional DME companies across southern California purchased prescriptions that were for the beneficiaries recruited by Moreno. On May 10, 2010, Cooper Medical Supply’s owner, Ajibola Sadiqr, was sentenced to 55 months in prison for his role in this fraud scheme.  The owners of other DME supply companies who used the beneficiary information of Moreno’s recruits to submit false claims to Medicare have also been sentenced to prison.

The sentencing was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney André Birotte Jr. for the Central District of California; Tony Sidley, Assistant Chief of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse; Glenn R. Ferry, Special Agent-in-Charge for the Los Angeles Region of the Office of Inspector General for HHS (HHS-OIG); and Steven Martinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office

The case was prosecuted by Trial Attorney Jonathan Baum and Senior Trial Attorney Jerrob Duffy of the Criminal Division’s Fraud Section, and was investigated by the California Department of Justice and HHS-OIG.  The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.

Since their inception in March 2007, Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 560 individuals who collectively have falsely billed the Medicare program for more than $1.2 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov

May 20, 2010

Five Doctors, Six Others Indicted for Participating in Million Dollar Medicare Fraud Ring (U.S. Attorney for the Eastern District of California)

Sacramento, CA - United States Attorney Benjamin B. Wagner announced that on May 20, 2010, a federal grand jury returned a 20-count superseding indictment charging five doctors and six others with conspiracy to commit health care fraud. The defendants are as follows:

• Dr. Alexander Popov, 44, of Los Angeles;
• Dr. Ramanathan Prakash, 63, of Northridge;
• Dr. Emilio Cruz III, 57, of Los Angeles;
• Dr. Lana Le Chabrier, 62, of Santa Barbara;
• Dr. Sol Teitelbaum, 82, of Los Angeles;
• Migran Petrosyan, 39, of Burbank;
• Khachatur Arutunyan, 51, Tujunga;
• Shushanik Martirosyan, 43, of Glendale;
• Zoya Belov, 35, of Carmichael;
• Nazaret Salmanyan, 27, of Citrus Heights; and
• Liw Jiaw Saechao, 44, of Sacramento.

This case is the product of an extensive investigation by the Office of the Inspector General, Department of Health and Human Services, and the Federal Bureau of Investigation. Assistant United States Attorney Philip Ferrari is prosecuting the case.

The superseding indictment alleges that from February of 2006 through August of 2008, the defendants operated three health care clinics in Sacramento, Richmond, and Carmichael that submitted more than $5 million in fraudulent claims to Medicare.

The leader of the conspiracy, Vardges Egiazarian, 60, of Panorama City, was named in an original indictment that focused on the activities of the Richmond Clinic. The original indictment also charged Le Chabrier, Petrosyan, and Arutunyan, as well as Dr. Derrick Johnson with health care fraud.

According to Egiazarian’s guilty plea entered on August 12, 2009, he admitted that claims were submitted to Medicare for patients at each of the three clinics that the physicians did not treat and seeking reimbursement for procedures that were either unnecessary or never performed. Egiazarian admitted the clinic’s patients were recruited and transported to the clinic by individuals who were paid according to the number of patients they brought to the facility. Rather than being charged a co-payment, the patients were paid for their time and the use of their Medicare eligibility, generally $100 per visit. Some of the patients for whom billings were submitted at the Richmond Clinic were actually deceased on the date that they allegedly received services.

On November 6, 2009, Egiazarian was sentenced to six and a half years in prison and ordered to pay over $1.5 million to Medicare in restitution.

On September 9, 2009, Derrick Johnson entered a guilty plea to the original indictment. He admitted that hundreds of Medicare claims for services he allegedly performed at the Richmond clinic were submitted on his behalf, yet he had never set foot in the facility nor had he had any contact with its purported patients. He has yet to be sentenced.

The superseding indictment returned last Thursday adds both a conspiracy charge and allegations relating to the Richmond Clinic and adds the Sacramento and Carmichael Clinics. In sum, the superseding indictment charges that Doctors Popov, Prakash, Le Chabrier and Cruz each submitted applications to Medicare seeking approval to submit claims for medical services allegedly rendered at the clinics. Despite the approval of these applications, and the submission of over $5 million dollars worth of claims to Medicare, none of the doctors ever provided services or treatment at the clinics. As alleged in the indictment, clinic patients seldom received the services purportedly rendered in claims submitted to Medicare. Instead, Medicare-eligible patients were typically given cursory examinations and then paid $100 each for their trouble. The claims submitted to Medicare on behalf of these patients alleged that they received a variety of tests and treatments, including physical therapy sessions and sleep studies that were never performed at the clinics. The clinics maintained falsified medical files that held test results purportedly relating to the patients. In some instances, clinic employees performed procedures such as ultrasounds or blood draws on themselves or each other, and then placed the results in files relating to Medicare-eligible beneficiaries. The money paid by Medicare on these claims was distributed among the members of the conspiracy.

The maximum statutory penalty for a violation of both Health Care Fraud and Conspiracy to Commit Health Care Fraud is 10 years in prison. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

The charges in the superseding indictment are only allegations and each defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

May 10, 2010

Los AngelesMedical Equipment Supplier Sentenced to 55 Months in Prison for Medicare Fraud (U.S. Attorney for the Central District of California)

Los Angeles - The owner and operator of a Canoga Park durable medical equipment (DME) company was sentenced to 55 months in prison on May 10, 2010, in connection with a nearly $1 million power wheelchair fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced. 

Ajibola Adekeunle Sadiqr, 51, of Reseda, was also ordered to pay $508,134 in restitution by U.S. District Judge John F. Walter of the Central District of California. In addition, Sadiqr was ordered to serve three years of supervised release following his prison term.

Sadiqr pleaded guilty on Jan. 27, 2010, to conspiracy to commit health care fraud.  According to court documents, Sadiqr owned and operated Cooper Medical Supply.  Sadiqr admitted that between January 2006 and September 2009, he conspired with Leonard Nwafor, the owner of another DME supply company, and Maria Nela Moreno, a patient recruiter, and others to purchase fraudulent prescriptions and medical documents.  Sadiqr then used those documents to submit false claims to Medicare for expensive, high-end power wheelchairs and DME he claimed he supplied to Medicare beneficiaries who lived hundreds of miles from Cooper Medical Supply’s store front location in Los Angeles.  According to court documents, over 80 percent of Cooper Medical Supply’s beneficiaries lived more than 100 miles from Cooper Medical Supply in cities and towns such as Fresno and Oakland, Calif.

Sadiqr also admitted that he knew Cooper Medical Supply’s beneficiaries did not need the power wheelchairs and other DME he billed to Medicare.  Sadiqr also admitted that he knew the doctor and beneficiary information contained in the fraudulent prescriptions and medical documents came from fraudulent medical clinics and patient recruiters like Moreno. Sadiqr admitted that he used Cooper Medical Supply to submit or cause the submission of approximately $950,000 in false claims to Medicare as a result of this scheme.

In sentencing Sadiqr, Judge Walter took into consideration Sadiqr’s criminal history, which included prior arrest and conviction for theft of personal property and receiving stolen property.

Sadiqr’s co-conspirators, Nwafor and Moreno, were convicted in September 2008 and February 2010, respectively, of conspiracy to commit health care fraud and health care fraud.  Nwafor was sentenced in March 2010 to nine years in prison. Moreno’s sentencing is scheduled for May 24, 2010. 

The sentencing was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney André Birotte Jr. for the Central District of California; Tony Sidley, Assistant Chief of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse; Glenn R. Ferry, Special Agent-in-Charge for the Los Angeles Region of the Office of Inspector General (OIG) for HHS (HHS-OIG); and Steven Martinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office

The case is being prosecuted by Assistant U.S. Attorney Kerry C. O’Neill of the Central District of California and Trial Attorney Jonathan T. Baum of the Criminal Division’s Fraud Section.  The case is being investigated by the California Department of Justice and HHS-OIG.  The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.

Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 560 individuals who collectively have falsely billed the Medicare program for more than $1.2 billion.  In addition, HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov

April 15, 2010

Orange County Cancer Doctor Charged with Defrauding Medicare and Other Health Insurers in $1 Million Scam (U.S. Attorney for the Central District of California) 

California - An Orange County cancer doctor has been charged with fraudulently billing Medicare and other health insurance companies up to $1 million for injectable cancer medications that never were provided.

Glen R. Justice, 65, of Pasadena, was named in a five-count criminal information that was filed yesterday afternoon in United States District Court in Santa Ana. In a plea agreement that was also filed yesterday, Justice agreed to plead guilty to five counts of health care fraud.

Justice, who runs the Pacific Coast Hematology/Oncology Medical Group in Fountain Valley, is scheduled to be arraigned in the case on May 3.

The court documents filed yesterday outline a scheme in which Justice defrauded health insurance companies, including Medicare, by billing for injectable cancer medications when patients never received those medications. Further, Justice “upcoded” claims made to health insurance companies by claiming that he administered more expensive injectable medications than were actually given to patients. The medications involved in the scheme included Neulasta, Neupogen, Procrit/Epogen/Aranesp, and Neumega. Justice’s scheme began in at least 2004 and continues until October 2009, despite being advised by staff about the improper billing and the execution of a search warrant at his medical group in November 2006. In his plea agreement, Justice acknowledges that the public and private health insurance companies suffered losses of between $400,000 and $1 million.

Each count of health care fraud carries a statutory maximum sentence of 10 years in federal prison.

This case is the product of a joint investigation by the Federal Bureau of Investigation, the U.S. Department of Health & Human Services - Office of Inspector General, IRS-Criminal Investigation, and the Department of Defense - Office of Inspector General.

April 12, 2010

Los Angeles Business Owner Pleads Guilty to Submitting Nearly Half a Million Dollars in False And Fraudulent Claims to Medicare (Criminal Division) 

Washington - The owner and operator of a Los Angeles durable medical equipment (DME) company pleaded guilty today to submitting nearly one half of a million dollars in false claims to Medicare, announced the Departments of Justice and Health and Human Services.

Sylvester Ijewere, 49, pleaded guilty today before U.S. District Court Judge Dale S. Fischer in the Central District of California to one count of health care fraud.  Ijewere, the owner of Maydads Medical Supply, admitted that between June 2007 and October 2009, he schemed with others to purchase fraudulent prescriptions and medical documents.  Ijewere admitted that he used those documents to submit false claims to Medicare for expensive, high-end power wheelchairs and other DME.  Approximately 50 percent of the Medicare beneficiaries to whom Ijewere claimed Maydads supplied with power wheelchairs and other equipment lived more than 100 miles from Maydads’ Los Angeles-area offices. 

Ijewere admitted that he knew the beneficiaries who received the power wheelchairs did not need them or the other equipment they received from Maydads.  Ijewere also admitted that he knew the doctor and beneficiary information he used to support Maydads’ false and fraudulent claims to Medicare came from fraudulent medical clinics and patient recruiters.  As a result of this scheme, Ijewere admitted that he submitted or caused the submission of approximately $471,345 in false and fraudulent claims to Medicare through Maydads.

At sentencing, scheduled for Aug. 16, 2010, Ijewere faces a maximum penalty of 10 years in prison and a $250,000 fine. 

Today’s result was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney André Birotte Jr. for the Central District of California; Tony Sidley, Assistant Chief of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse (Cal DOJ); Glenn R. Ferry, Special Agent-in-Charge for the Los Angeles Region of the HHS Office of Inspector General (OIG); and Steven Martinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office.

The case is being prosecuted by Trial Attorney Jonathan T. Baum of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Kerry C. O’Neill of the Central District of California.  The case is being investigated by Cal DOJ and HHS OIG.  The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.

Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for approximately $1.1 billion.  In addition, the HHS Centers for Medicare and Medicaid Services, working in conjunction with the HHS OIG are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov

March 24, 2010

Owner of Los Angeles-Area Company Sentenced to Nine Years in Prison for Medicare Fraud (Criminal Division)

Washington - A federal court issued an order on March 24, 2010, sentencing the owner and operator of a Los Angeles-area durable medical equipment (DME) company to prison in connection with an approximately $1 million power wheelchair fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney André Birotte Jr., for the Central District of California; Tony Sidley, Assistant Chief of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse (Cal DOJ); Glenn R. Ferry, Special Agent-in-Charge for the Los Angeles Region of the Office of Inspector General (OIG) for the Department of Health and Human Services (HHS); and Steven Martinez, Assistant Director in Charge of the FBI’s Los Angeles Field Office.

Leonard Nwafor, 44, was sentenced in absentia by U.S. District Judge John F. Walter of the Central District of California to nine years in prison.  In addition, Nwafor was ordered to serve three years of supervised release following his prison term, pay $526,243 in restitution and $25,000 in fines, and forfeit more than $526,000 in stolen Medicare funds to the U.S. government.

Nwafor was convicted at trial in September 2008 of conspiracy to commit health care fraud and health care fraud.  After his conviction, Nwafor fled the jurisdiction and is considered a fugitive.

At trial, evidence established that Nwafor, through his company, Pacific City Group Inc., aka Pacific City Medical Equipment, submitted $1,109,438 in fraudulent claims to Medicare.  As a result of the fraudulent claims, Nwafor received $526,243 in payments from Medicare.  The evidence presented at trial showed that almost all the claims Nwafor submitted to Medicare were for expensive, high-end power wheelchairs and wheelchair accessories that were not needed by the beneficiaries. 

At trial, elderly and disabled Medicare beneficiaries testified that individuals known as “marketers” approached them on the street, at home or in church and encouraged the beneficiaries to give the marketers their Medicare numbers and other personal information in exchange for free power wheelchairs.  Evidence presented at trial established that Nwafor billed Medicare for power wheelchairs on behalf of more than 170 beneficiaries, none of whom actually needed the wheelchairs.  The power wheelchairs Nwafor claimed Pacific City provided to the beneficiaries can be billed to Medicare for up to $7,000 each.

The evidence also showed that Nwafor supplied power wheelchairs to beneficiaries who were not able to use the chairs.  One beneficiary, who was blind, testified that he could not see to operate the wheelchair and never used it.  The same beneficiary also testified that a delivery driver working for Nwafor and the delivery driver’s girlfriend paid him $200 to refer them to other Medicare beneficiaries.

Another beneficiary testified about the aggressive techniques marketers used to recruit her and her husband into the fraudulent scheme.  This beneficiary testified that an individual purporting to be from Medicare, but who was actually associated with Nwafor and his co-conspirators, threatened to terminate the Medicare benefits of the beneficiary and her husband unless they accepted two power wheelchairs that the beneficiary and her husband did not need.

The evidence at trial included testimony from Los Angeles-area physicians whose names appeared on prescriptions Nwafor used to support his false claims to Medicare.  One of these physicians, a psychiatrist, testified that he does not prescribe power wheelchairs as part of his practice, and had never written a prescription for one.  Other physicians testified that the prescriptions bearing their names were phony and that their handwriting was not on any of the prescriptions. 

After his conviction, Nwafor admitted in documents he filed with the court that he purchased the prescriptions and documents he used to support his false claims to Medicare from a co-conspirator for approximately $1,300 per prescription.  One of Nwafor’s co-conspirators, Ajibola Sadiqr, admitted that he purchased fraudulent prescriptions and documents from Nwafor to perpetrate his own fraudulent power wheelchair Medicare fraud scheme.  Sadiqr pleaded guilty and is scheduled to be sentenced on April 12, 2010.

The case was prosecuted by Trial Attorney Jonathan Baum, former Special Trial Attorney Spencer Turnbull and Assistant Chief John S. (Jay) Darden of the Criminal Division’s Fraud Section, with the investigative assistance of the Cal DOJ and HHS-OIG.  The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.

Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for more than $1.1 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov

March 5, 2010

Glendale Resident Convicted in Medicare Fraud Scheme that Fraudulently Billed Medicare $3.4 Million (U.S. Attorney for the Central District of California)

LOS ANGELES – The owner of a downtown medical clinic has been convicted of Medicare fraud and money laundering in a scheme that billed Medicare more than $3.2 million in only one month for medical services that were not provided.

Manuk Karapetyan, 46, an Armenian national who resides in Glendale, was found guilty last Friday of 22 counts of health care fraud and six counts of money laundering. The jury returned its verdicts after a one-week trial in United States District Court.

The charges against Karapetyan are in connection with the submission of approximately 6,000 health insurance claims for more than 800 Medicare patients who were supposedly treated at Karapetyan’s clinic, USA Independent Medical Corp. The claims were made under the names of four California licensed physicians who never worked for the medical clinic and whose identities were stolen.

At trial, federal prosecutors presented evidence that there was no medical clinic, no patients received medical services, and no doctors provided any medical services. Nevertheless, USA Independent billed Medicare for services such as echocardiography, office evaluations, ultrasounds, electromyography studies of the anal or urethral sphincter, and anorectal manometry. Before Medicare discovered the fraud in October 2004, Karapetyan had already received and deposited approximately $566,000 of Medicare funds into two bank accounts he controlled. Karapetyan also transferred tens of thousands of dollars of Medicare funds from these bank accounts to himself and to associates in Armenia through a Glendale-based money-transfer service.

Karapetyan testified at trial that he was merely a “straw” owner of the clinic and that a now-deceased individual, Sadrek Asatryan, was responsible for the business.  The government introduced evidence showing that Karapetyan actively participated and was deeply involved in establishing and conducting the financial transactions for USA Independent.

The investigation into USA Independent began when Medicare patients received notices that summarized the charges that Karapetyan’s company had billed to Medicare. The patients complained to their own doctors and to Medicare in the fall of 2004 that they did not receive the medical services, and Medicare opened a fraud investigation.

As a result of Friday’s guilty verdicts, Karapetyan faces a statutory maximum sentence of 320 years in federal prison. He is scheduled to be sentenced on June 21 by United States District Judge Margaret M. Morrow. Karapetyan has been held without bond since he was arrested in this case in April 2009. 

The case against Karapetyan is the result of an investigation by the Federal Bureau of Investigation.

February 26, 2010

Jury Convicts Fresno, Calif., Patient Recruiter of Medicare Fraud in Power Wheelchair Scam (Criminal Division)

WASHINGTON - A federal jury in Los Angeles convicted a Fresno woman late Friday after it found that she committed Medicare fraud by recruiting patients for the purpose of receiving unnecessary power wheelchairs, Assistant Attorney General Lanny A. Breuer of the Criminal Division; George S. Cardona, Acting U.S. Attorney for the Central District of California; Steven Martinez, Assistant Director In Charge of the FBI’s Los Angeles Field Office; and Glenn R. Ferry, Special Agent-in-Charge for the Los Angeles Region of the Office of Inspector General (OIG) for the Department of Health and Human Services (HHS) announced today.

After a one-week trial in federal court in Los Angeles, the jury found Maria Nela Moreno, 57, guilty on Feb. 26, 2010, of conspiracy to commit health care fraud and six counts of health care fraud. The evidence introduced at trial showed that Moreno solicited Medicare beneficiaries by meeting with groups of seniors and going door-to-door at low-income, senior living communities in Sanger and Parlier, Calif., near Fresno. Moreno recruited beneficiaries to receive expensive, high-end power wheelchairs that the beneficiaries did not need. Several beneficiaries testified that Moreno wore a badge with her picture on it that appeared to resemble a hospital identification badge.

According to the beneficiaries who testified at trial, Moreno tricked them into giving her their identification cards and Medicare insurance numbers by telling the beneficiaries that they should take a power wheelchair because Medicare would soon run out of money, and the beneficiaries would not be able to get a chair if the beneficiaries were to need them in the future. Moreno copied the beneficiaries’ identification cards and Medicare insurance numbers with the portable scanner she carried with her. Each of the power wheelchairs, which the evidence at trial showed could be purchased for less than $1,000 wholesale, resulted in approximately $6,000 in false claims to Medicare. Witnesses testified that at the Elderberry Apartments in Sanger, one of the locations where Moreno and her co-conspirators illegally recruited beneficiaries to receive power wheelchairs, many residents left the wheelchairs unused.

Witnesses testified at trial that they took the beneficiary information they received from Moreno to a fraudulent medical clinic in Los Angeles, which then used the information to create bogus prescriptions. Witnesses testified that they purchased the fraudulent power wheelchair prescriptions and medical documents from the clinic, and then sold them for more than $1,000 per prescription to durable medical equipment (DME) supply companies in and around Los Angeles. Moreno was in turn paid a kickback for each power wheelchair that the DME companies were able to fraudulently bill Medicare, using the beneficiary information Moreno obtained.

One of the DME supply companies that billed Medicare using the identities of Moreno’s recruits was Cooper Medical Supply of Canoga Park, Calif. Trial evidence established that between January 2006 and September 2009, Cooper Medical Supply submitted approximately $828,835 in false and fraudulent claims to Medicare, almost all of which were for power wheelchairs. Trial evidence established that additional DME companies across southern California also purchased prescriptions that were from the beneficiaries recruited by Mareno. Cooper Medical Supply’s owner, Ajibola Sadiqr, previously pleaded guilty to Medicare fraud. Sadiqr’s sentencing is scheduled for April 12, 2010.

U.S. District Court Judge John F. Walter of the Central District of Los Angeles scheduled sentencing for May 10, 2010. Moreno faces a maximum penalty of 10 years in prison and a $250,000 fine for each count of conspiracy and health care fraud for which she was convicted.

The case was prosecuted by Trial Attorney Jonathan Baum and Senior Trial Attorney Jerrob Duffy of the Criminal Division’s Fraud Section, and was investigated by the California Department of Justice and HHS-OIG. The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.

Since their inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for more than $1.1 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov

January 6, 2010

Grand Jury Indicts Doctor Who Headed Liver Transplant Program On Charges Of Covering Up Patient Switch (U.S. Attorney for the Central District of California)

Intended Recipient of Liver was Removed From Wait List and Later Died

A Los Angeles surgeon who was the director of the liver transplant program at St. Vincent Medical Center in Los Angeles was indicted on Jan. 6, 2010, by a federal grand jury for lying to the national organ transplant network after a liver accepted on behalf of one patient was instead transplanted into another patient who was significantly lower on the national wait list.

Dr. Richard R. Lopez Jr., 54, who resides in the Cheviot Hills area of West Los Angeles, was named today in an eight-count indictment that accuses him of conspiracy, one counts of concealment of a material fact, and six counts of falsification of records in a matter under the jurisdiction of the United States Department of Health and Human Services.

According to the indictment, in September 2003, St. Vincent was offered a liver for a St. Vincent patient, identified as A-H, who ranked second on the match list for that liver, but who was in his home country of Saudi Arabia. The backup patient for the liver was at another local hospital. Instead of advising the organ procurement organization of the intended switch and allowing the organ to be offered to the backup patient, Lopez approved acceptance of the liver and its transplantation into a patient at St. Vincent – a patient identified in the indictment as A-B, who was ranked 52nd on the match list behind nine other St. Vincent patients.

After A-B received the liver, Lopez and his co-conspirators falsely told authorities at the national organ transplant network that A-H had received the liver, and later submitted a falsified pathology report on A-H’s “explanted” (removed) liver. As a result of the false reporting, A-H was removed from the liver transplant wait list in September 2003, and was thereafter deprived of the opportunity to have this life-saving operation, according the indictment. However, Lopez continued to tell A-H that he was on the liver transplant wait list and instructed A-H return to the United States in April 2004, when AH was found to be too ill to be transplanted. He subsequently returned to Saudi Arabia, where he later died.

The indictment alleges that in reports filed until 2005 with the authorities operating the national organ transplant network, Lopez and unnamed co-conspirators continued to maintain the fiction that A-H had received the liver transplant. In 2005, the switch and cover-up were discovered by senior management at St. Vincent, and the matter was reported to authorities. Lopez has not been associated with St. Vincent since late 2005. The hospital has fully cooperated with federal authorities since the beginning of the investigation.

“The significance of this indictment cannot be overstated in that this type of criminal activity affects the public’s trust in the organ transplant process, one in whichorgans are distributed in a fair and equitable manner,” said Steven M. Martinez, Assistant Director in Charge of the FBI's Los Angeles Field Office. “The FBI will continue to work with our partners at the Department of Health and Human Services to investigate cases such as this, where the alleged actions of the defendant directly factored into the death of the rightful organ recipient, who might be alive today had he not been improperly removed from the wait list.”

Seven of the eight counts in the indictment relate to the false reporting of the recipient of the liver offered for A-H. The last count relates to another incident in which a liver was switched to a different recipient and, following the transplant, Lopez misrepresented the circumstances of the switch.

“Violating federal organ transplant rules and then taking steps to cover up his actions, Dr. Lopez exposed the public to substantial risk,” said Glenn R. Ferry, Special Agent in Charge for the Los Angeles Region of the Office of Inspector General of the Department of Health of Human Services. “This case sends a strong message that doctors must follow the rules in place to protect patients. OIG will continue to work with our partners to preserve the integrity of the organ transplant network.”

Lopez is scheduled to make his initial court appearance in United States District Court in Los Angeles on January 25.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty. If convicted of the eight counts in the indictment, Lopez faces a statutory maximum penalty of 130 years in federal prison.

The case was investigated by agents from the Department of Health and Human Services, Office of Inspector General and the Federal Bureau of Investigation. 

CONTACT: Assistant United States Attorney Consuelo S. Woodhead 
Health Care Fraud Coordinator 
(213) 894-3987 Release No. 09-001

December 20, 2009

Audiologist Sentenced to Six Months in Prison for Medicare Fraud (U.S. Attorney for the Eastern District of California)

FRESNO, Calif. – United States Attorney Benjamin B. Wagner announced on Dec. 14, 2009, that ADAM JOHN SORTINI, 88, of Merced, was sentenced on December 11, 2009, by United States District Judge Oliver W. Wanger, to six months in prison to be followed by 15 months of home confinement, plus restitution of $100,000, for his scheme to defraud the Medicare program by submitting false billings for audiology services. A jury found him guilty of 17 counts of mail fraud and one count of health care fraud on November 4, 2008.

This case is the product of a joint investigation by the Federal Bureau of Investigation and the U.S. Department of Health & Human Services, Office of Inspector General.

According to Assistant United States Attorneys Kirk E. Sherriff and Stanley A. Boone, who prosecuted the case, the evidence introduced at trial showed that SORTINI visited skilled nursing facilities throughout Northern California and billed for hearing tests that were not reimbursable by Medicare because they were routine in nature and were performed without a referring physician’s order. He also did not perform all of the tests for which he billed Medicare, and when he was audited by Medicare, he submitted forged physician referrals to justify his Medicare billings. SORTINI billed Medicare for unwarranted and unnecessary hearing tests, including tests for patients with severe mental deterioration including Alzheimer’s disease, dementia, and senility, and claimed on certain days to have tested between 25 and 50 or more patients at skilled nursing facilities located more than 100 miles apart. He billed and was paid hundreds of thousands of dollars for these services. This illegal activity continued from January 1998 to January 2003, when the FBI conducted a search warrant at his office in Merced.

At sentencing, Judge Wanger found that SORTINI had obstructed justice by committing perjury at trial, had abused the trust of the Medicare program, and had taken advantage of vulnerable, elderly victims, many of whom were mentally incompetent. The judge took into account SORTINI’s age and medical condition, but determined that a prison sentence was warranted given the nature of the defendant’s fraud.

More information on the website for the United States Attorney's Office for Eastern District of California - http://www.justice.gov/usao/cae/

October 21, 2009

Los Angeles Medicare Fraud Strike Force Charges 20 in Health Care Fraud Cases Involving Durable Medical Equipment: Defendants Charged With Submitting More Than $26 Million in Fraudulent Medicare Claims (U.S. Attorney for the Central District of California)

WASHINGTON – Twenty defendants, most of them residing in the Los Angeles area, have been charged in seven cases for allegedly participating in Medicare fraud schemes that resulted in more than $26 million in fraudulent bills to the Medicare program, announced Assistant Attorney General of the Criminal Division Lanny A. Breuer, Acting U.S. Attorney for the Central District of California George S. Cardona and Daniel R. Levinson, Inspector General of the Department of Health & Human Services (HHS).

Federal and state agents arrested seven of the defendants this morning, and seven others were taken into custody last week, as the result of an investigation by the Medicare Fraud Strike Force that targeted fraudulent durable medical equipment (DME) providers. The seven defendants arrested today are scheduled to make their initial appearances in U.S. District Court in Los Angeles beginning this afternoon.

“Today’s indictments and arrests are important achievements in our ongoing fight against Medicare fraud, but there is more that we can, and will, do,” said Assistant Attorney General of the Criminal Division Lanny A. Breuer. “Our Medicare Fraud Strike Force will continue to be vigilant in rooting out criminals who masquerade as health care providers in order to steal from American taxpayers. Every dollar stolen from the Medicare program is one dollar too many.”

“The Strike Force has been an effective tool to address a long-standing problem in my district,” said Acting U.S. Attorney George S. Cardona. “The nearly two dozen people charged in recent weeks are linked to more than $26 million in fraudulent billings. That money is better spent paying for the medical needs of legitimate patients.”‬‪

“Our Strike Forces are working. The continued cooperation among our agencies has once again resulted in more indictments and arrests of those suspected of defrauding the Medicare Trust Fund,” said Daniel R. Levinson, HHS Inspector General. “Today’s operations demonstrate the effectiveness of using advanced technologies to detect fraud schemes and to support our joint enforcement efforts.”

The seven cases announced today involve DME company owners and marketers who are accused of engaging in a variety of schemes that defrauded the Medicare program through fraudulent bills which total approximately $26 million. The charging documents outline criminal schemes involving the fraudulent ordering of power wheelchairs, orthotics (devices designed to assist with orthopedic problems) and hospital beds. In addition to the arrests, federal agents today executed search warrants at four locations in Los Angeles County.

Michael Martinez, 30, of Long Beach, Calif., and six other defendants were charged with conspiracy to commit health care fraud and for making false statements to the government. Martinez allegedly recruited relatives and individuals linked to the Santa Ana-based Brook Street Gang to act as straw owners for four fraudulent DME companies. The six other defendants – Angel Michel, 36, of San Diego; Guadalupe Alcaraz, 30, of Corona, Calif.; Theresa Padilla, 23, of Moreno Valley, Calif.; Pedro Franco, 28, of Torrance, Calif.; Ricardo Navarro, 49, of Corona; and Martin Padilla, 42, of Moreno Valley – allegedly each received approximately $5,000 from a Martinez associate to act as the nominal owners of the fraudulent DME companies. In this way, they could deceive Medicare by concealing the true identities of those who actually owned the companies. The indictment alleges that as part of the conspiracy, the fraudulent DME companies – Mercy Medical Supplies Inc.; Chatsworth Medical Equipment Inc.; All Your Needs Healthcare Products Inc.; and Global Meridian Management Inc. – submitted approximately $11.2 million in fraudulent Medicare claims for medically unnecessary power wheelchairs and orthotic devices. If convicted on all counts in the indictment, Martinez faces a maximum statutory penalty of 75 years in federal prison, and the other six defendants each face maximum sentences of 15 years in prison.

The owners of four DME companies and two of their employees were arrested on October 15 after being indicted for allegedly submitting more than $12 million in false claims to Medicare for power wheelchairs, orthotics and other medical equipment that the conspirators either did not supply, supplied to beneficiaries who did not need the equipment, or allegedly supplied to deceased beneficiaries. Christopher Iruke, 57, of Los Angeles, the owner of Pascon Medical Supply, and employee Darawn Vasquez, 25, of Inglewood, Calif., are alleged to have acquired fraudulent prescriptions and documents from individuals who recruited Medicare beneficiaries or were associated with fraudulent medical clinics. Iruke, Vasquez and Iruke’s wife, Connie Ikpoh, 47, also of Los Angeles; as well as Jummal Joy Ibrahim, 54, of Las Vegas; and Asia Fowler, 38, of Pacoima, Calif.; who were the alleged owners of Horizon Medical Equipment and Supply Inc., Contempo Medical Equipment Inc., and Ladera Medical Equipment Inc., are alleged to have used the fraudulent prescriptions and documents Iruke and Vasquez acquired to submit approximately $12.1 million in false claims to Medicare. The indictment charges a sixth defendant, Aura Marroquin, 28, of Los Angeles, with participating in the scheme. If convicted on the charges alleged in the indictment, the six defendants face maximum possible sentences ranging from 50 years to 180 years in federal prison. A trial in this case has been scheduled for November 24.

Maria Nela Moreno, 56, of Parlier, Calif., was indicted along with a codefendant for allegedly conspiring to submit approximately $828,835 in fraudulent claims to Medicare for medically unnecessary power wheelchairs through a DME company in Canoga Park, Calif. These defendants also are charged with six counts of submitting false claims to the Medicare program. Moreno was arrested this morning in Fresno, Calif., and faces a maximum possible sentence of 70 years in prison if convicted on all charged counts.

Anait Garanfilyan, 47, of Los Angeles, was arrested on October 15 after being indicted on multiple counts related to the payment of illegal kickbacks for Medicare patient referrals to two medical clinics in Los Angeles between February 2005 and May 2006. If convicted on all charged counts, Garanfilyan faces a maximum possible sentence of 10 years in prison. Garanfilyan is scheduled to be arraigned on Monday.

Mariya Bagdasaryan, 54, and Edgar Srapyan, 26, both of Glendale, Calif., were indicted on charges of conspiring to commit health care fraud from October 2007 to December 2008. Bagdasaryan operated a fraudulent DME company called Goldberg Medical Supply and allegedly submitted approximately $779,028 in false claims to Medicare for medically unnecessary power wheelchairs and wheelchair accessories. Bagdasaryan also is charged with paying illegal kickbacks for the referral of Medicare patients to Goldberg Medical Supply. Srapyan, though a fraudulent DME company, True Care Medical Supply, is alleged to have submitted approximately $647,356 in false claims to Medicare for unnecessary power wheelchairs and wheelchair accessories. If convicted on all charged counts, Bagdasaryan faces a maximum sentence of 90 years in prison. Srapyan faces a maximum sentence of 50 years if convicted on all counts.

Adejare Ademefun, 55, of Inglewood, was indicted for allegedly conspiring with others to submit more than $850,000 in false claims to Medicare for medically unnecessary power wheelchairs. Ademefun is charged with one count of conspiracy to commit health care fraud and five counts of health care fraud. If convicted on all charged counts, Ademefun faces a maximum possible sentence of 60 years in prison.

Sylvester Ijewere, 49, of Arleta, Calif., was named in a criminal complaint charging him with one count of health care fraud. Ijewere is associated with a DME company called Maydads that allegedly was used to submit nearly $500,000 in false claims to Medicare. Ijeware was arrested this morning. If convicted, Ijewere faces a maximum possible sentence of 10 years in federal prison.

An indictment merely contains allegations that a defendant or defendants have committed a crime. Every defendant is presumed innocent unless and until proven guilty at trial.

The cases are being prosecuted by Assistant U.S. Attorneys Christopher Lui, April A. Christine, Kerry O’Neill and Steven Arkow of the U.S. Attorney’s Office for the Central District of California, and Trial Attorney Jonathan Baum of the Criminal Division’s Fraud Section. The cases were investigated by the FBI; the Department of Health and Human Services, Office of Inspector General (HHS-OIG); and the California Department of Justice, Bureau of Medical Fraud and Elder Abuse.

The case was brought as part of the Medicare Fraud Strike Force, supervised by Deputy Chief Kirk Ogrosky of the Criminal Division’s Fraud Section and Acting U.S. Attorney for the Central District of California George S. Cardona. Assistant U.S. Attorney Vince Farhat is the Strike Force coordinator in Los Angeles. Since inception in March 2007, Strike Force operations in four districts have resulted in indictments of 331 individuals who collectively have falsely billed the Medicare program for more than $720 million. In addition, HHS’ Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

More information on the website for the United States Attorney's Office for the Central District of California - http://www.justice.gov/usao/cac/

October 20, 2009

Medical Equipment Company Owners Accused of Falsifying Physician Orders Pay $191,606 to Settle Civil Claims Against Them and Their Company (U.S. Attorney for the Eastern District of California)

SACRAMENTO, Calif.—United States Attorney Lawrence G. Brown announced today that the Federal Government has entered into a settlement agreement with SHIRLEY M. ESTRADA and MARCUS R. ESTRADA, along with their related business, Aristo-Care, Inc.

This case is the product of an investigation by the FBI. According to Assistant United States Attorney Catherine Swann, who litigated the civil case, the ESTRADAs through their company Aristo-Care, Inc., supplied durable medical equipment to beneficiaries under the government-funded Medi-Cal program.

The government alleged the ESTRADAs fraudulently charged Medi-Cal for various incontinence supplies. Specifically, the government contended the ESTRADAs forged physician signatures and fraudulently used physician provider numbers in order to receive reimbursement under the Medi-Cal program. The ESTRADAs have agreed to pay the government $191,606 to settle this civil case, but deny any liability or wrongdoing.

More information on the website for the United States Attorney's Office for Eastern District of California - http://www.justice.gov/usao/cae/

June 15, 2009

Doctor Pleads Guilty to Fifteen Counts of Writing Controlled Substance Prescriptions For Cash (U.S. Attorney for the Central District of California)

A physician who operated a medical clinic in Westminster, California pleaded guilty today to federal narcotics charges for writing prescriptions for the powerful and addictive painkiller Oxycodone and the painkiller Hydrocodone for people he did not examine in exchange for as much as $150 in cash for each prescription.

Vu Le, 45, of Midway City, pleaded guilty to all 15 felony counts in which he was charged with writing prescriptions for Oxycodone and Hydrocodone outside of the usual course of professional practice.  Vu Le was indicted and arrested by special agents with the Drug Enforcement Administration in December 2006.  His sentencing is scheduled for September 14, 2009. 

Defendant admitted during his guilty plea that in 2005 and 2006 he provided prescriptions to persons seeking controlled substances without a legitimate medical reason in exchange for cash payment.  These individuals came to defendant’s medical office in Westminster and paid $150 in cash in order to be seen by defendant.  After paying this amount, the individuals met with defendant and claimed that they had pain and needed medication.  Defendant then prescribed controlled substances, usually Hydrocodone (a Schedule III controlled substance) and Oxycodone (a Schedule II controlled substance), without further examination, without referral slips and without any other documentation showing a legitimate medical reason for the prescription.  Defendant admitted that his actions in prescribing these controlled substances in this way were outside the scope of professional practice.

As part of the investigation into Le, DEA agents conducted undercover operations in which they posed as individuals seeking controlled substances.  During the undercover meetings, Le did not examine the undercover agents nor did he take a thorough medical history from them.  Instead, he simply wrote prescriptions for Oxycondone and Hydrocodone in a manner that was outside the usual course of professional practice. 

Defendant is scheduled to be sentenced by United States District Judge James V. Selna on September 14, 2009.  As a result of his guilty pleas, defendant faces a statutory maximum sentence of 135 years imprisonment and possible fines of $6,750,000.   

The investigation into Vu Le was conducted by the Drug Enforcement Administration.

A copy of this press release may be found on the website of the United States

Attorney's Office for the Central District of California at:

http://www.usdoj.gov/usao/cac/pressroom/pr2009/074.html

March 18, 2009

Former Hospital Executive Pleads Guilty To Paying Kickbacks In ‘Skid Row’ Healthcare Fraud Scheme (U.S. Attorney for the Central District of California)

The former co-owner and board chairman of City of Angels Medical Center pleaded guilty to paying illegal kickbacks for patient referrals in United States District Court in Los Angeles today.  Robert Bourseau, 74, who maintains residences in Rancho Mirage and downtown Los Angeles, admitted to paying illegal kickbacks as part of a scheme to defraud Medicare and Medi-Cal by recruiting homeless persons from Los Angeles’ Skid Row.

Bourseau and Dante Nicholson, a former senior vice-president at City of Angels, were indicted in January by a federal grand in Los Angeles.  Also named in the indictment was Intercare Health Systems, Inc., the company through which Bourseau and his partner, Rudra Sabaratnam, operated City of Angels. The 12-count indictment alleges that Intercare, Bourseau, Nicholson and others conspired to recruit homeless people to receive unnecessary health services for the purpose of committing health care fraud.

 In pleading guilty, Bourseau admitted to participating in a scheme to pay Estill Mitts and others to refer homeless Medicare and Medi-Cal beneficiaries whom they recruited, primarily from Skid Row, to City of Angels for in-patient hospital stays.  City of Angels entered into sham contracts intended to conceal the illegal kickbacks paid to Mitts, and billed Medicare and Medi-Cal for in-patient services to the recruited homeless beneficiaries, including those for whom in-patient hospitalization was not medically necessary.

This is the second indictment brought in the investigation into health care fraud related to Skid Row residents.  In December 2008, Sabaratnam, 64, pleaded guilty to paying illegal kickbacks for patient referrals (see: http://www.usdoj.gov/usao/cac/pressroom/pr2008/153.html). Sabaratnam’s co-defendant, Mitts, 64, of Los Angeles, who operated a center that recruited homeless people to receive unnecessary health services, pleaded guilty in September 2008 to conspiracy to commit health care fraud, money laundering, and tax evasion (see: http://www.usdoj.gov/usao/cac/pressroom/pr2008/121.html). In March 2009, Nicholson pleaded guilty to paying kickbacks for patient referrals (see: http://www.usdoj.gov/usao/cac/pressroom/pr2009/032.html).  Sabaratnum, Mitts, and Nicholson are all scheduled to be sentenced on August 17, 2009, by United States District Judge George H. King.

The charges to which Bourseau has pleaded guilty carry a statutory maximum penalty of 10 years in federal prison.  Bourseau has agreed to pay over $4.1 million in restitution to Medicare and Medi-Cal.  United States District Judge George H. King ordered Bourseau to appear for sentencing on September 14, 2009.

The case against Bourseau, Nicholson, and Intercare is part of an ongoing investigation being conducted by the U.S. Department of Health and Human Services, Office of Inspector General; the Federal Bureau of Investigation; IRS-Criminal Investigation Division; the California Department of Justice Bureau of Medi-Cal Fraud and Elder Abuse; and the Health and Law Enforcement Team (HALT), a multi-agency task force which is operated by the Los Angeles County Health Department.

Anyone with information that could assist the ongoing investigation is encouraged to contact investigators with the Department of Health and Human Services by calling 1-800-HHS-TIPS, or emailing HHSTips@oig.hhs.gov.