LOS ANGELES – The operator of two now-defunct medical supply companies in Hawthorne and Ventura, as well as two former employees, have been arrested on federal healthcare fraud charges for allegedly billing Medicare well over $24 million for medically unnecessary power wheelchairs (PWC) and the repair of medical equipment.
The scheme is outlined in a 29-count indictment that was returned by a federal grand jury on December 14 and unsealed yesterday after the three defendants were arrested by special agents with the United States Department of Health and Human Services’ Office of Inspector General and the Federal Bureau of Investigation.
According to the indictment, Tamara Yvonne Motley operated Action Medical Equipment and Supplies, which was based in Hawthorne until 2014, and Kaja Medical Equipment & Supply, which was based in Ventura until late 2016. Motley allegedly orchestrated a scheme in which corrupt physicians prescribed medically unnecessary durable medical equipment (DME), such as PWCs, and Motley oversaw the submission of fraudulent bills to Medicare.
In January 2011, when Medicare changed the reimbursement rules for PWCs, Action largely stopped Medicare billing for PWCs and, instead, started billing Medicare for PWC repairs. Action and Kaja allegedly submitted bills for PWC repair or replacement services that were not medically necessary, were not needed to make the PWCs serviceable, and often simply were not performed. The majority of bills submitted in this case allegedly involve fraudulent repair work.
The defendants taken into custody yesterday are:
Tamara Yvonne Motley, also known as Tamara Ogembe, 49, of Redondo Beach;
Cynthia Karina Marquez, 42, of Paramount, who worked as an office manager at both Action and Kaja; and
Juan Roberto Murillo, 41, of Montebello, who worked at both medical supply companies as a repair technician.
According to the indictment, over a nearly eight-year period, Action billed Medicare more than $18.2 million for DME – most for PWCs, but also for PWC accessories, knee braces and back braces – and the repair or replacement of PWCs. Medicare paid Action nearly $10.3 million.
Between July 2013 and November 2016, Kaja billed Medicare $6.3 million for PWCs, PWC-related accessories, and the repair or replacement of PWCs. Medicare paid Kaja approximately $2.8 million for those claims, the indictment alleges.
The indictment charges all three defendants with 20 counts of healthcare fraud and one count of conspiring to launder money.
Motley and Marquez are further charged with two counts of aggravated identity theft in relation to the use of other persons’ names to operate the medical supply companies. Motley is additionally charged with six counts of structuring cash transactions to avoid federal reporting requirements for transactions of more than $10,000.
If convicted, each of the three defendants would potentially face decades in federal prison. Each count of healthcare fraud carries a statutory maximum sentence of 10 years in federal prison.
An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed to be innocent until and unless proven guilty in court.
At an arraignment yesterday afternoon in United States District Court, all three defendants entered not guilty pleas to the charges in the indictment and a trial was scheduled for February 13. A United States Magistrate Judge set bond for Motley and Murillo, and Marquez was ordered detained.
This case is the product of an investigation by the United States Department of Health and Human Services’ Office of Inspector General and the Federal Bureau of Investigation.
This case is being prosecuted by Assistant United States Attorney Julian L. André of the Major Frauds Section.