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Sept. 11, 2009

HOUSTON MAN SENTENCED TO PRISON IN ADULT DIAPER FRAUD CASE

(HOUSTON) – Ene Etim Hogan, of Houston, has been sentenced to two years in federal prison without parole and ordered to pay restitution for defrauding Medicaid of more than $680,000 through an adult diaper fraud scheme, United States Attorney Tim Johnson and Texas Attorney General Greg Abbott announced today.

Hogan, 60, aka Ernest Hogan, owned and operated Shanet Medical Source, a durable medical equipment company. He routinely billed Medicaid for adult urinary incontinence supplies that he did not deliver to the Medicaid beneficiaries or for an amount of supplies provided which were significantly less than the amounts stated in the claims. Finally, Hogan routinely billed Medicaid for adult urinary incontinence supplies when the supplies were provided to Medicaid beneficiaries who did not need the supplies and whose physicians had not prescribed the supplies. Adult incontinence supplies includes adult diapers, underpads, wipes and pull-up briefs.

Beginning in 2004 through the filing of his last claim in March 2006, Hogan billed Medicaid for incontinence supplies even after his delivery staff and/or delivery contractors were told by the beneficiaries they did not need or want the incontinence supplies. He regularly billed Medicaid the maximum allowed amount for incontinence supplies each month per beneficiary for extra large size diaper briefs which have the highest Medicaid reimbursement rate without consideration to the actual size needed by the beneficiary and for delivering a quantity of adult diapers far in excess of the amount he purchased from wholesale suppliers. Hogan billed Medicaid for a total of $1,108,667 and received payments for those fraudulent claims totaling $683,360.

At the sentencing hearing this afternoon, United States District Judge Sim Lake denied Hogan’s request for a lower sentence stating that his conduct was not a single event but a systematic scheme to defraud the Medicaid program. In addition to the prison term, the court imposed a three-year-term of supervised release and further ordered Hogan to pay $550,000 in restitution to the federal medical benefits program finding that Hogan had already paid $133,360 of the total $683,360 he fraudulently received in payments following the filing of a state civil suit to recover an overpayment. 
 
This case was the result of the investigative efforts of the Texas Attorney General’s Medicaid Fraud Unit in Houston and the FBI. Special Assistant United States Attorney Justo A. Mendez prosecuted the case.

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