DEPARTMENT OF JUSTICE
United States Attorney Gretchen C. F. Shappert
Western District of North Carolina
FOR IMMEDIATE RELEASE
Friday, November 21, 2008
CONTACT: Suellen Pierce
704.338.3120
Fax: 704.227.0264
TWO INDIVIDUALS SENTENCED IN CONNECTION WITH FAR RANGING HEALTH CARE FRAUD SCHEME WITH TIES TO CHARLOTTE Health Care Fraud Scheme Responsible for More Than $2.3 Million in False Claims ASHEVILLE, NC - Tamara Paige Varnado, 28, of Houston Texas, and Paul Chijindu Osuji, 45, of Brooklyn, NewYork, were sentenced in U.S. District Court for the Western District of North Carolina on Thursday, November 20, 2008, in Asheville, to serve terms of 63 months and 211 months, respectively, by District Judge Lacy H. Thornburg. Today’s announcement is made by United States Attorney Gretchen C.F. Shappert of the Western District of North Carolina. Joining Shappert in the announcement is FBI Special Agent in Charge of North Carolina Operations, Nathan T. Gray; Assistant Special Agent in Charge Rick Burguieres, Office of Inspector General for the Department of Health and Human Services.
Also making today’s announcement is Commissioner Jim Long of the North Carolina Department of Insurance and Deputy Commissioner Al Koehler of the Investigations Division of the North Carolina Department of Insurance. Both defendants were convicted on January 15, 2008, following a seven-day jury trial, on charges of health care fraud, conspiracy to commit health care fraud, money laundering, and conspiracy to commit money laundering. Evidence introduced during the trial established that between August 2003 and February 2004, the defendants, along with others including a medical doctor from the Houston area, submitted more than $2.3 million in false claims to Medicare and other private insurance companies seeking reimbursement for the purchase and delivery of motorized wheelchairs. The claims were supported by false prescriptions and certificates of medical necessity supplied by the medical doctor who was paid a flat fee of $250.00 for each false document she supplied. (The doctor was convicted, following trial, in a separate case prosecuted in the Southern District of Texas and was sentenced to a prison term of 120 months).
The evidence further showed that rather than providing the motorized wheelchairs, the defendants delivered less expensive scooters or no equipment at all. In addition, after Osjui’s company, Chimatex Imports was barred from submitting claims for service after November 2004, the defendants created fictitious and backdated claims in an effort to continue their fraudulent scheme. In less than six months, the defendants received nearly $1.3 million in fraudulent reimbursements from Medicare and other insurance companies.
To conceal their scheme, defendant Varnado created a company called Medisource 2000 in Houston Texas to purchase the equipment, while Osuji’s company, Chimatex, served as the nominal purchaser in Charlotte and supplied the Medicare authorized purchasing number. A third company, First Choice Billing, created by another co-conspirator in Houston, was used to bill Medicare and the private insurance companies for the equipment purchases. Using complex financial arrangements and profit sharing agreements, Chimatex would receive all reimbursements for the equipment in Charlotte and then transfer funds through inter bank wire transfers and cashier’s checks to Varnado’s accounts in Houston.
The convictions were the result of a four-year investigation by agents from the Western District Health Care Fraud Task Force, including special agents from the Federal Bureau of Investigation, the Office of the Inspector General of the Department of Health and Human Services, and the North Carolina Department of Insurance, as well as attorneys from the United States Attorney’s Office. Both defendants were ordered to make restitution in the amount of $1,208, 256. In addition, nearly $180,000, seized from the defendants, was ordered forfeited to the United States by the Court.