Tuesday, June 22, 2010

Power Wheelchair Fraud Investigations Continue: Recent Los Angeles Case Illustrates What Type Of DME Investigations Go Criminal

There are a number of investigations in Southern California regarding Medicare fraud involving power wheelchairs. The task force by the Health and Human Service's Office of Inspector General (OIG) began in 2003 with "Operation Wheeler Dealer" and now the criminal investigations and prosecutions are in full bloom. It takes years for these cases to be investigated and prosecuted.

A recent Los Angeles case involving a DME billing Medicare for power wheelchairs shows what type of investigations can end up in a criminal courtroom.

Some DME companies mistakenly take the position that if there was a physician prescription and the wheelchair was delivered -- there can be no fraud case.  This recent Los Angeles federal criminal case illustrates why that approach alone may not be a sound defense at trial unless there is medical necessity and valid physician prescriptions. If there was marketing directed to patients or Medicare beneficiaries, that causes additional concerns that need to be addressed at the investigative level.

This recent case also shows what the government is investigating in a number of these cases. On March 25, 2010, U.S. District Judge John F. Walter of the Central District of California sentenced the owner and operator of a Los Angeles-area durable medical equipment (DME) company, Leonard Nwafor (age 44) in absentia to nine years in prison for an alleged power wheelchair fraud.

Mr. Nwafor was convicted by a jury at trial in September 2008 of conspiracy to commit health care fraud and health care fraud. After his conviction, Nwafor fled the jurisdiction and is considered a fugitive. After over 18 months, the court decided to sentence him "in absentia" meaning while he is absent.

In addition, Nwafor was ordered to serve three years of supervised release following his prison term, pay $526,243 in restitution and $25,000 in fines, and forfeit more than $526,000 in stolen Medicare funds to the U.S. government.

At trial, the evidence produced by the government was that Mr. Nwafor, through his company, Pacific City Group Inc., aka Pacific City Medical Equipment, submitted $1,109,438 in claims to Medicare, primarily for expensive, high-end power wheelchairs and wheelchair accessories for 170 Medicare beneficiaries. The government alleged that these wheelchairs were not needed by these beneficiaries.

The trial focused on the marketing used to recruit Medicare beneficiaries and how there was no "medical necessity" for the wheelchairs. At trial, elderly and disabled Medicare beneficiaries (who could walk without a wheelchair) testified that individuals known as “marketers” approached them on the street, at home or in church and encouraged the beneficiaries to give the marketers their Medicare numbers and other personal information in exchange for "free" power wheelchairs. The government next presented evidence at trial established that Mr. Nwafor's company billed Medicare for power wheelchairs for 170 beneficiaries for up to $7,000 per wheelchair.

The testimony included one blind beneficiary or patient, who testified that he could not see to operate the wheelchair and never used it. The same beneficiary also testified that a delivery driver working for Mr. Nwafor and the delivery driver’s girlfriend paid him $200 to refer them to other Medicare beneficiaries.

Another beneficiary testified about the aggressive techniques marketers used to recruit her and her husband into obtaining a "free" wheelchair.  This beneficiary testified that an individual purporting to be from Medicare, but who was actually associated with Mr. Nwafor and his co-conspirators, threatened to terminate the Medicare benefits of the beneficiary and her husband unless they accepted two power wheelchairs that the beneficiary and her husband did not need.

The government also had Los Angeles area physicians testify that they did not write many of the prescriptions or orders for wheelchairs that were in the files of Mr. Nwafor's company. The physicians testified that the prescriptions were forged. One of these physicians, a psychiatrist, testified that he does not prescribe power wheelchairs as part of his practice, and had never written a prescription for one. Other physicians testified that the prescriptions bearing their names were phony and that their handwriting was not on any of the prescriptions.

After his conviction, Mr. Nwafor admitted in sentencing documents he filed with the court that he purchased the prescriptions and documents he used to support his false claims to Medicare from a co-conspirator for approximately $1,300 per prescription. One of Mr. Nwafor’s alleged co-conspirators, Ajibola Sadiqr (owner of Cooper Medical Supply), admitted that he purchased fraudulent prescriptions and documents from Mr. Nwafor to perpetrate his own fraudulent power wheelchair Medicare fraud scheme. Mr. Sadiqr pleaded guilty and was sentenced in May 2010 to 55 months plus three years of supervised release by Judge Walter.

Posted by Tracy Green, Esq.  Any questions should be directed to Tracy Green, a very experienced health care fraud attorney, Medi-Cal fraud attorney and Medicare fraud attorney. You can email her at tgreen@greenassoc.com or call her at 213-233-2261.

Posted by Tracy Green, Esq. Please email Ms. Green at tgreen@greenassoc.com or call her at 213-233-2260 to schedule a complimentary 30-minute consultation. 

Tracy Green is a very experienced California health care fraud attorney, power wheel fraud attorney, California Durable Medical Equipment attorney, and California DME attorney.

The firm focuses its 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 and in health care fraud related matters in California and throughout the country. Their website is: http://www.greenassoc.com/


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