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FOR IMMEDIATE RELEASE
Friday, February 18, 2011
Office Manager of Los Angeles Medical Supply Business Pleads Guilty to Conspiring to Defraud Medicare of More Than $6 Million in Wheelchair Scheme

WASHINGTON – The office manager of a Los Angeles durable medical equipment (DME) company pleaded guilty today to conspiring with her former church pastor to run a power wheelchair scheme that defrauded Medicare of more than $6 million, the Departments of Justice and Health and Human Services (HHS) announced.

 

Darawn Shadene Vasquez, 26, pleaded guilty today before U.S. District Judge George H. King in the Central District of California. Vasquez admitted that between January 2006 and September 2009, she conspired with her former church pastor, Christopher Iruke, and others to submit false claims to Medicare for expensive, high-end power wheelchairs and other DME through four DME companies that Iruke either owned or controlled through alleged straw owners. The companies included Pascon Medical Supply, Horizon Medical Equipment and Supply Inc., Contempo Medical Equipment Inc. and Ladera Medical Equipment Inc. Vasquez was charged, along with Iruke and four other individuals, in an indictment returned on Sept. 30, 2009.

 

Vasquez admitted in court documents that she and others used fraudulent prescriptions and documents they purchased from various individuals to support the false power wheelchair and DME claims that Pascon, Horizon, Contempo and Ladera submitted to Medicare. Vasquez admitted that she and her co-conspirators submitted claims to Medicare prior to delivering the power wheelchairs and DME to Medicare beneficiaries in order to ensure that Medicare would pay them. Vasquez admitted that she and her co-conspirators often knew that the Medicare beneficiaries did not need the wheelchairs, either because the beneficiaries said they did not need them, or Vasquez observed them walking. As a result of this scheme, Medicare paid Pascon, Horizon, Contempo and Ladera approximately $6.1 million on the false claims they submitted to Medicare.

 

Vasquez also admitted that in approximately August 2009, after subpoenas were received for the records of the four companies, she and another individual shredded pages from two ledgers containing the names of all the individuals who sold them fraudulent prescriptions and medical documents, and the amounts of money paid and owed those individuals. According to court documents, when the shredder overheated, they flushed the remaining ledger pages down the toilet.

 

At sentencing, scheduled for Oct. 3, 2011, Vasquez faces a maximum penalty of 10 years in prison and a $250,000 fine.

 

Iruke’s trial is scheduled to begin on May 3, 2011, and he is presumed innocent unless proven guilty beyond a reasonable doubt in a court of law

Today’s guilty plea 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 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 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. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

 

Since their inception in March 2007, Strike Force operations in nine districts have charged more than 990 individuals who collectively have falsely billed the Medicare program for more than $2.3 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.

      

The case is being prosecuted by Trial Attorney Jonathan T. Baum of the Criminal Division’s Fraud Section. The case is being investigated by HHS-OIG.

 

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

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