News and Press Releases

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Feb. 4, 2010


(HOUSTON) – The majority owner and operator of a Houston durable medical equipment (DME) company was arrested yesterday in connection with a $1 million health care fraud investigation, United States Attorney Tim Johnson and Texas Attorney General Greg Abbott announced today.

Fred Jessie Cole Jr., 44, of Houston, the majority owner and administrator of Crusade Integrated Health Care Services, was arrested on Feb. 3, 2010. Following an initial appearance before a U.S. Magistrate Judge, Cole was ordered released on $100,000 bond pending trial. Cole is charged with 14 counts of health care fraud in an indictment returned under seal by a grand jury on Jan. 19, 2010. The indictment was unsealed by the court following Cole’s arrest and appearance in federal court yesterday.

According to allegations in the 14 count-indictment, Cole engaged in a scheme to defraud the Texas Medicaid Program by submitting claims for incontinence supplies - namely diapers and briefs - that were not delivered, not wanted and not medically necessary. Forged delivery tickets with inaccurate quantities of supplies were allegedly created to cover up the fraud. Approximately $937,567 was paid by the Medicaid program for incontinence supply claims submitted by Cole to Medicaid through his DME company between May 3, 2003, and Sept. 1, 2006.

The maximum possible punishment upon conviction for health care fraud is 10 years in prison, a $250,000 fine and up to three years of supervised release.

The joint investigation leading to the charges against Cole was conducted by agents of the Texas Attorney General Medicaid Fraud Control Unit and the FBI. Special Assistant United States Attorney Julie Redlinger is prosecuting the case.

An indictment is an accusation of criminal conduct, not evidence.
All defendants are presumed innocent unless and until convicted through due process of the law.



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