Ambulance Company Owner and Brother Sentenced in $6 Million Health Care Fraud Conspiracy
HOUSTON – Two brothers have been sentenced to more than four years in federal prison for their convictions of conspiracy to commit health care fraud, health care fraud and money laundering, announced Acting U.S. Attorney Abe Martinez. Kevin Olufemi Davies, 29, and his brother Melvin Olusola Davies, 28, pleaded guilty Dec. 9, 2016.
Today, U.S. District Judge Lynn Hughes ordered Kevin Davies to serve a 57-month sentence, while his brother received 63 months in federal prison. Both will also be required to serve three years of supervised release following completion of the prison term. They were further ordered to pay a more than $2.3 million in restitution. In handing down the sentence, Judge Hughes said that stealing from tax-payers - including blue collar workers who work under difficult conditions such as out in the cold and snow to pay taxes intended to be used to provide health care services to the elderly and sick - was not acceptable. He further noted that probation was not an option for this conduct.
The brothers owned and operated KMD Healthcare Services Inc. (KMD) from their home in a gated townhouse community in Houston. As part of their guilty pleas, the pair admitted they submitted approximately $6 million in false and fraudulent claims to Medicare, Medicaid and Tricare (another government health program) for ambulance services that were not provided. The brothers admitted they transported Medicare beneficiaries with only one of the two required EMTs and in vans instead of ambulances. They also admitted they paid a Houston physician $500 for certificates of medical necessity and paid some of the Medicare beneficiaries to ride in the vans.
Medicare, Medicaid and Tricare only pay for medically necessary ambulance services in vehicles designed and equipped to respond to medical emergencies and for patients who cannot be safely transported by any other means of transportation. Medicare also requires two individuals to staff ambulance transports, including at least one licensed EMT.
According to the plea agreements, the EMTs working for the defendants wrote up ambulance “run sheets” even though the Medicare beneficiaries did not travel by ambulance and did not need ambulance services. The individuals transported were not bed bound, could walk and routinely used non-ambulance transport in their daily activities. One patient even walked to her own therapy session, but KMD billed Medicare $51,952 for her ambulance transportation.
In total, KMD billed Medicare, Medicaid and Tricare approximately $6,293,108 in false and fraudulent claims for ambulance services that were not provided and not medically necessary. They received at least $2,201,137 from Medicare, $219,924 from Medicaid and $16,735.29 from Tricare as payment for those claims.
The brothers have been in federal custody since their arrest on May 25, 2016. They have both forfeitted vehicles they purchased with the fraudulent health care proceeds, including a 2010 Porsche Panamera and a 2012 Mercedes Benz CLS.
The FBI, IRS – Criminal Investigation and Texas Office of the Attorney General’s Medicaid Fraud Control Unit conducted the investigation. Assistant U.S. Attorney Julie Redlinger prosecuted the case.