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Monday, September 22, 2008
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Los Angeles Jury Convicts Defendant of Fraud Involving More Than $1.1 Million in False Billing to Medicare

Thirteenth Trial Conviction for Medicare Fraud Strike Force Since Inception

WASHINGTON – A federal jury in Los Angeles today convicted the owner and operator of Pacific City Group Inc., a Los Angeles based durable medical equipment (DME) company, of defrauding the Medicare program, Acting Assistant Attorney General of the Criminal Division Matthew Friedrich and U.S. Attorney for the Central District of California Thomas P. O’Brien announced.

After a one-week trial in federal court, the jury found Leonard Uchenna Nwafor, 42, guilty on all charged counts, including conspiracy to commit health care fraud and health care fraud. U.S. District Judge John F. Walter of the Central District of California set Nwafor’s sentencing for Dec. 1, 2008. Nwafor also faces separate federal mail fraud charges for which a trial date has not yet been set.

According to evidence presented at trial, Nwafor owned and operated a DME supply company named Pacific City Group Inc., also known as Pacific City Medical Equipment (Pacific City). Between January 2006 and May 2008, Nwafor billed Medicare $1,109,438 through Pacific City and was paid $526,243 as a result of that billing. Evidence at trial revealed that nearly all of these bills were for medically unnecessary motorized wheelchairs and wheelchair accessories. Even though Pacific City is a Los Angeles-area store, trial testimony proved that the majority of the Medicare bills were submitted on behalf of Medicare beneficiaries in northern California and elsewhere who did not live near Pacific City.

At trial, elderly and disabled Medicare beneficiaries testified that they were encouraged to turn over their Medicare numbers and other personal identifying information in exchange for a promised free motorized wheelchair. According to evidence presented during the trial, Nwafor billed Medicare for motorized wheelchairs on behalf of more than 170 beneficiaries, none of whom needed the wheelchairs for which Pacific City billed Medicare. The evidence also showed that some beneficiaries were not even able to use a wheelchair. For instance, one beneficiary, who is blind, testified that he could not see to operate the wheelchair and could not carry it up and down the steps to his apartment. Another beneficiary testified about the aggressive techniques used to recruit her and her husband into the fraudulent scheme. She testified that an individual purporting to be from Medicare, but who was actually revealed to be associated with the defendant, threatened that her and her husband’s benefits would be taken away if they did not accept two unnecessary motorized wheelchairs, which can cost up to $7,000 per chair.

The evidence at trial also included testimony from Los Angeles-area physicians whose purported prescriptions were used to justify the bills to Medicare. The physicians testified that the prescriptions bearing their names were phony in that they were for patients they had never seen, for diagnoses outside their area of specialty, and in writing that was not their own. One doctor, a psychiatrist, testified that he had never written a DME prescription for a power wheelchair during his career.

This case was prosecuted by Trial Attorney Jonathan Baum, Special Trial Attorney Spencer Turnbull and Senior Trial Attorney John S. (Jay) Darden of the Criminal Division’s Fraud Section, with the investigative assistance of the California Department of Justice and the U.S. Department of Health and Human Services, Office of the Inspector General.

The Medicare Fraud Strike Force (MFSF) is led by Kirk Ogrosky, Deputy Chief of the Criminal Division’s Fraud Section in Washington, D.C., and the office of U.S. Attorney Thomas P. O’Brien of the Central District of California. Since the inception of MFSF operations in 2007, federal prosecutors have indicted 103 cases with 175 defendants in both Los Angeles and Miami. Collectively, these defendants fraudulently billed the Medicare program for more than half a billion dollars.