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Press Release

Former Durable Medical Equipment Company Owner Sentenced For Defrauding Medicare

For Immediate Release
U.S. Attorney's Office, Southern District of Texas

HOUSTON – Emeka Daniel Orji, 43, of Richmond, has been sentenced to federal prison and ordered to pay restitution following his conviction for conspiracy to commit and committing health care fraud, announced United States Attorney Kenneth Magidson. Orji pleaded guilty July 29, 2013.

Today, U.S. District Judge Lynn Hughes handed Orji a sentence of 48 months in prison. He was also ordered to pay $1.5 million in restitution to the Medicare program.
During his plea, Orji admitted that between January 2006 and March 20, 2008, he agreed with Aghaegbuna "Ike" Odelugo, of Supar Land, to split the profits of a scheme to defraud Medicare and Medicaid. Orji opened the Durable Medical Equipment (DME) company Spectrum Foundation Inc. and obtained a Medicare provider number. He admitted he worked with Odelugo and, through Spectrum, submitted approximately $4.4 million in false claims to Medicare and received payments totaling approximately $1.5 million.

Orji said that most items billed to Medicare and Medicaid, including “Artho kits” and power wheelchairs, either were not delivered at all, not medically necessary, not prescribed by a physician or upcoded from what was actually delivered. The items in the kit primarily consisted of a double shoulder brace, a lower back brace, left and right elbow braces, left and right wrist braces, gloves, left and right knee braces, left and right ankle braces and left and right foot braces. While Medicare may cover some of the items in this kit individually based on medical necessity, they are not recognized nor authorized to be provided as a kit. At Spectrum, approximately 96% of the items billed were the Artho Kits and lymph edema pumps, 3% were power wheelchairs and accessories and the remainder was various other DME.

In addition, several of the items were upcoded ‑ that is, the item billed to Medicare is paid at a higher rate than the actual item delivered. The upcoding was most prevalent in the back braces and heating pads. Using Spectrum, Orji and Odelugo submitted approximately $700,000 in claims to Medicare for the thoracic lumbar sacral orthotic brace - a full torso, rigid clamshell brace.  If a beneficiary received any lumbar brace, it was usually a small flexible neoprene brace.

Orji admitted Odelugo obtained Medicare beneficiary information by paying recruiters, then created paperwork and patient files to give the appearance of a valid claim. Odelugo electronically filed the claim with Medicare or Medicaid and sent the patient files to Orji. Spectrum submitted 157 claims for dead beneficiaries. The Medicare money was then split between Orji and Odelugo with 25% going to Orji and 75% going to Odelugo. In total, Orji received approximately $375,000.

Odelugo also pleaded guilty and was sentenced last year to 72 months in prison.

Orji was permitted to remain on bond and voluntarily surrender to a U.S. Bureau of Prisons facility to be determined in the near future.

The criminal charges are the result of an investigation conducted by agents of the United States Department of Health and Human Services-Office of Inspector General. The case is being prosecuted by Assistant United States Attorney Al Balboni.

Updated April 30, 2015