FOR IMMEDIATE RELEASE:
WEDNESDAY - September 9, 2009
RALEIGH MAN PLEADS GUILTY TO $12.64 MILLION IN
FRAUDULENT MEDICARE CLAIMS
RALEIGH - United States Attorney George E.B. Holding announced that in federal court yesterday KALU KALU, 46, of Raleigh, North Carolina, pled guilty before United States District Judge James C. Dever, III, to conspiring to commit health care fraud, in violation of Title 18, United States Code, Section 371 and aiding and abetting health care fraud, in violation of Title 18, United States Code, Section 1347.
A Federal Grand Jury returned a Criminal Indictment on February 19, 2009. According to the investigation, from approximately December, 2004, through July, 2008, KALU, d/b/a Enuda Healthsource; co-defendant Kecia Kalu and KALU, d/b/a Universal Medical Supplies, and KALU with a second co-defendant, Martin Ifeani Iroegbu, d/b/a Divine Medical Equipment engaged in a scheme to bilk Medicare out of over $12.64 million by causing fraudulent payments to be made by Medicare for durable medical equipment (DME) that was either not necessary, not needed, or not delivered.
The investigation revealed that employees of the companies would give presentations at patient's homes or churches giving the impression that Medicare was giving DME to those patients that asked for it at no cost to the patient. The Medicare beneficiaries would then be asked about their medical conditions and the names of their physicians and their Medicare numbers would be obtained. A physician order/prescription form (“prescription”), would then be completed with the original being sent to the primary physician for the physician's signature and then returned. Often times the“prescriptions” were denied, or sometimes the physicians would mark through the items not needed and sign for other items that they felt were needed.
The defendants would still bill Medicare for DME that was denied by the physicians, that was not medically necessary, that was not requested by the patient’s physician, or, in some cases, that was not the correct item or that was never delivered to the patient. Often times, the defendants would bill Medicare for more expensive equipment than was delivered to the medicare beneficiaries.
Mr. Holding commented, “The Medicare system was enacted to assisted retired and elderly citizens in obtaining needed health care. Unfortunately, some individuals target this system as an easy mark, bilking millions of taxpayer dollars for themselves. My office is committed to assisting our federal investigative agencies in bringing to justice those who illegally benefit from a system in which hardworking, honest taxpayers have invested.”
The maximum penalties for health care fraud are up to 10 years imprisonment, a fine of up 250,000, and up to three years supervised release. For conspiring to commit health care fraud, the maximum penalties are up to five years imprisonment, a fine of up to $250,000, and up to three years supervised release
Sentencing is set for December 14, 2009.
Investigation of this case was conducted by the Office of Health and Human Services, Office of Investigations and the Federal Bureau of Investigations. Assistant United States Attorney Felice McConnell Corpening represented the government.
News releases are available on the U. S. Attorney’s web page at www.usdoj.gov/usao/nce within 48 hours of release.