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April 22, 2009

HOUSTON BUSINESS OWNERS CONVICTED OF DEFRAUDING MEDICARE & MEDICAID OF $36 MILLION

(HOUSTON) – A Houston jury has convicted three Houston area residents of multiple counts of defrauding Medicare in a false billing scheme, announced acting United States Attorney Tim Johnson. After three hours of deliberation the jury returned its verdicts convicting Rhonda Fleming, 43, Bose Ebhamen, 45, and King Arthur, 54, of health care fraud for their roles in a far-reaching scheme to defraud Medicare of more than $36 million. Fleming, Ebhamen and Arthur were also convicted of conspiracy to defraud Medicare and wire fraud, and Fleming and Ebhamen were convicted of several counts of money laundering.

Evidence presented during the four-week trial proved that Fleming was the owner of three Durable Medical Equipment (DME) companies, Hi-Tech Medical Supply & Delivery (Hi-Tech), E&R Medical Supply (E&R) and Medical Equipment and Supply Center (MESC), and a Medicare billing company, Advanced Medical Billing Specialists, Inc. Arthur was the co-owner of Hi-Tech. Ebhamen was the owner of First Advantage Nursing, another DME company. Three other co-defendants involved in the scheme, Khira Guillory, 28, Bill Perkins, 49, and James Chaney, 46, pleaded guilty previously and testified during the trial regarding the multi-million dollar scheme.

Testimony and evidence proved that Fleming purchased Medicare beneficiary information, including names and Medicare numbers from James Chaney and others for use in the scheme. Bill Perkins and other employees of Fleming created fictitious delivery tickets to give the appearance that the DME had been delivered by Hi-Tech, First Advantage and E&R to the Medicare beneficiaries. Ebhamen and Arthur allowed Fleming to use their Medicare supplier numbers to execute the scheme. Virtually none of the $36 million of durable medical equipment billed to Medicare was ever purchased or delivered to the Medicare beneficiaries. Khira Guillory testified she billed Medicare $7.5 million for equipment that was never delivered. Fleming and her five co-defendants’ fraud scheme caused Medicare/Medicaid to pay out approximately $6.5 million in fraudulent claims.

During the fall 2005, the United States seized and forfeited approximately $1.8 million of the illegal Medicare/Medicaid proceeds obtained during the conspiracy to defraud Medicare.

Each health care fraud conviction carries a maximum penalty of 10 years in a federal prison and a $250,000 fine, each of the wire fraud convictions carries a maximum penalty of 20 years imprisonment and a $250,000 fine, the conspiracy conviction carries a penalty of five years imprisonment and a $250,000 fine and the money laundering counts carry either a 10 or 20-year maximum penalty and as much as a $500,000 fine. Parole has been abolished in the federal prison system.

United States District Judge Gray Miller, who presided over the trial, has set sentencing for June 26, 2009. Fleming has been and will remain in federal custody without bond pending sentencing. Ebhamen and Arthur have been continued on bond with GPS monitoring.

The criminal charges are the result of a joint investigation being conducted by agents of the U.S. Department of Health and Human Services-Office of Inspector General, the Internal Revenue Service Criminal Investigation Division, FBI, and the Medicare Fraud Control Unit of the Texas Attorney General’s Office into the rampant and flagrantly fraudulent billing of Medicare and Medicaid by unscrupulous DME company owners. This case was prosecuted by Assistant United States Attorney Al Balboni and Special Assistant United States Attorney Suzanne Bradley.

 

 

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