Thursday, October 22, 2009

Seven Federal Criminal Indictments In Los Angeles Target Durable Medical Equipment Owners, Employees And Marketers

On October 21, 2009, the U.S. Attorney's Office for the Central District of California in Los Angeles announced that over the past few weeks there have been seven separate criminal cases filed involving durable medical equipment (DME) providers. In addition to the arrests, on October 21 federal agents executed search warrants at four locations in Los Angeles County. These cases were the result of investigations by the Medicare Fraud Strike Force.

Here is a summary of three of the cases. A subsequent blog post will discuss the other four cases.

An indictment merely contains allegations that a defendant or defendants have committed a crime. Every defendant is presumed innocent unless and until proven guilty at trial.

1st DME Health Care Fraud Case: Seven people were charged with conspiracy to commit health care fraud and for making false statements to the government: (1) Michael Martinez, 30, of Long Beach; (2) Angel Michel, 36, of San Diego; (3) Guadalupe Alcaraz, 30, of Corona.; (4) Theresa Padilla, 23, of Moreno Valley; (5) Pedro Franco, 28, of Torrance; (6) Ricardo Navarro, 49, of Corona; and (7) Martin Padilla, 42, of Moreno Valley. This is Case No. 2:09-CR-0997.

The indictment alleges that Martinez recruited relatives and individuals linked to the Santa Ana-based Brook Street Gang to act as straw owners for four fraudulent DME companies. The six other defendants allegedly each received approximately $5,000 from a Martinez associate to act as the nominal owners of the fraudulent DME companies. In this way, they could allegedly deceive Medicare by concealing the true identities of those who actually owned the companies.

The indictment alleges that as part of the conspiracy, the fraudulent DME companies—Mercy Medical Supplies Inc.; Chatsworth Medical Equipment Inc.; All Your Needs Healthcare Products Inc.; and Global Meridian Management Inc.—submitted approximately $11.2 million in fraudulent Medicare claims for medically unnecessary power wheelchairs and orthotic devices.

This case may be related to another DME health care fraud case, U.S. v. Levon Sedrakyan, Case No. CR 08-1066-PSG which was filed in September 2008.

2nd DME Health Care Fraud Case: On October 15, 209, six persons were arrested (owners of four DME companies and two of their employees) after being indicted for allegedly submitting more than $12 million in false claims to Medicare for power wheelchairs, orthotics and other medical equipment that the conspirators either did not supply, supplied to beneficiaries who did not need the equipment, or allegedly supplied to deceased beneficiaries. This is Case No. :09-CR-1008.

Christopher Iruke, 57, of Los Angeles (the owner of Pascon Medical Supply) and employee Darawn Vasquez, 25, of Inglewood, Calif., are alleged to have acquired fraudulent prescriptions and documents from individuals who recruited Medicare beneficiaries or were associated with fraudulent medical clinics.

Mr. Iruke, Ms. Vasquez and Iruke’s wife, Connie Ikpoh, 47, also of Los Angeles; as well as Jummal Joy Ibrahim, 54, of Las Vegas; and Asia Fowler, 38, of Pacoima, Calif. (who were the alleged owners of Horizon Medical Equipment and Supply Inc., Contempo Medical Equipment Inc., and Ladera Medical Equipment Inc.) are alleged to have used the fraudulent prescriptions and documents Mr. Iruke and Ms. Vasquez acquired to submit approximately $12.1 million in false claims to Medicare.

The indictment also charges a sixth defendant, Aura Marroquin, 28, of Los Angeles, with participating in the scheme.

3rd DME Health Care Fraud Case: Maria Nela Moreno, 56, of Parlier, Calif., was arrested on October 21 after being indicted along with a codefendant for allegedly conspiring to submit approximately $828,835 in fraudulent claims to Medicare for medically unnecessary power wheelchairs through a DME company in Canoga Park, Calif. These defendants also are charged with six counts of submitting false claims to the Medicare program. The statutory maximum possible for these charges is 70 years.

Any questions or comments should be directed to: Tracy Green is a principal at Green and Associates in Los Angeles, California. They focus their practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers including, but limited to, DME providers. Their website is:


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