Maryland Doctor Sentenced for Defrauding Medicare And Other Health Care Programs and Evading $781,193 in Taxes

U.S. Attorney Says “Additional Health Care Fraud Prosecutions are Expected”

July 1, 2008

Greenbelt, Maryland - U.S. District Judge Alexander Williams, Jr. sentenced Ndubuisi Joseph Okafor, M.D., age 48, of Mitchellville, Maryland today to 65 months in prison followed by three years of supervised release for tax evasion and health care fraud, announced United States Attorney for the District of Maryland Rod J. Rosenstein. Judge Williams ordered that Dr. Okafor pay restitution of $769,192 to federal and state taxing authorities and $33,060.80 to Medicare. Dr. Okafor was immediately taken into custody following the sentence to begin serving his sentence.

“Too many health care dollars are stolen by medical providers who bill for fictitious or unnecessary services. We have made health care fraud a priority in Maryland and expect additional health care fraud prosecutions in the near future,” said United States Attorney Rod J. Rosenstein.

“Money gained through illegal sources, such as healthcare fraud, is part of the untaxed, underground economy. This untaxed underground economy poses a threat to our voluntary tax compliance system and undermines the overall public confidence in our American system of taxation," said C. Andre' Martin, IRS Special in Charge of the Washington D.C. Field Office.

According to the plea agreement, Dr. Okafor operated a medical practice named “The Okafor Group,” which provided primary care medicine in the Washington D.C. metropolitan area. From 1997 through 2005, Dr. Okafor evaded his taxes by reporting false information to the Internal Revenue Service and tax preparers regarding his personal income and the gross receipts from his medical practice; establishing sham corporations in the Bahamas to create false expenses and disguise personal income; and diverting money from his medical practice by writing checks from the corporate bank account for personal expenses. He also caused his medical practice to file false income tax returns. As a result of these schemes, the total tax loss is $781,193.

Specifically, in January 1997, Dr. Okafor hired Universal Corporate Services ("UCS") to incorporate an off-shore corporation named "Eziafa International Investment Co." ("Eziafa") in the Bahamas. UCS was a company that promoted asset protection through the formation of off-shore companies. According to its literature, UCS protected assets of taxpayers by "getting as many assets out of your personal name as possible" through transfers of "money, investments and assets into a control." In or about October 2000, Dr. Okafor hired UCS to incorporate an off-shore corporation named "Omni Ventures Corporation" ("Omni") in the Bahamas. Both Eziafa and Omni were "sham" corporations in that these entities neither provided services nor sold products, but were simply used as vehicles through which Dr. Okafor evaded lawful reporting and payment of income taxes to the United States. Specifically, Dr. Okafor diverted personal income to Eziafa and Omni in order to engage in securities trading on his own behalf and to buy property in his native country of Nigeria.

Dr. Okafor also plead guilty to defrauding Medicare and other health benefit programs. For example, Dr. Okafor caused Medicare to reimburse him for false claims by billing for hospital services that Dr. Okafor did not render and, in many instances, when Dr. Okafor was on vacation or not even present in the hospital. On one occasion on November 10, 2002, Dr. Okafor was traveling in South Carolina but submitted claims for seeing patients admitted to the Providence Hospital in Washington D.C. on that date. For this conduct, Dr. Okafor caused losses to the Medicare and other health care benefit programs of between $40,000 and $70,000.

In addition to the evasion and fraud charges, Judge Williams found that Dr. Okafor obstructed both the tax and health care fraud investigations by creating fraudulent documents such as post-dated patient notes in his medical files and phony invoices related to his medical practice. In 1998, Dr. Okafor was placed on probation for 3 years by the Board of Physician’s Quality Assurance for immoral and unprofessional conduct related to his medical practice. Dr. Okafor faces a mandatory minimum of five years exclusion from participation in all federally funded health care programs for his conduct in this case.

United States Attorney Rod J. Rosenstein praised the investigative work performed by the Internal Revenue Service - Criminal Investigation Division, Federal Bureau of Investigation, Department of Health and Human Services, Office of Inspector General and the Office of Personnel Management, Office of Inspector General. Mr. Rosenstein thanked Assistant U.S. Attorneys Sandra Wilkinson and Robert K. Hur, who prosecuted the case.


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