Owner of Two Houston Health Care Companies Pleads Guilty to Defrauding Medicare of $6.3 Million

WASHINGTON—An owner of two Houston health care companies pled guilty today in connection with a $6.3 million Medicare fraud scheme, announced the Departments of Justice and Health and Human Services (HHS).

Clifford Ubani, 52, pled guilty before U.S. District Court Judge Gray Miller in Houston to conspiracy to commit health care fraud. In his plea, Ubani admitted that he defrauded Medicare of $6.3 million.

According to court documents, Ubani was an owner and operator of Family Healthcare Services (Family Services). Family Services maintained a valid Medicare provider number in order to submit Medicare claims for the costs of durable medical equipment (DME) and purported to provide orthotics and other DME to Medicare beneficiaries. According to court documents, Ubani hired co-conspirators to recruit Medicare beneficiaries for the purposes of filing claims with Medicare for DME. Once Medicare beneficiary numbers were obtained by Ubani, Family Services submitted claims to Medicare for DME, including orthotic devices, which were medically unnecessary and/or not provided. Many of the orthotic devices were components of what was referred to as an “arthritis kit,” and purported to be for the treatment of arthritis-related conditions, although they were not medically necessary and appropriate for such conditions. The arthritis kit generally contained a number of orthotic devices including braces for both sides of the body and related accessories such as heat pads. Ubani admitted that he paid kickbacks to the recruiters for their referrals. In total, Family Services submitted approximately $1.1 million in fraudulent claims to Medicare.

Additionally, Ubani was an owner and operator of Family Healthcare Group (Family Group), a home health care company. Family Group purported to provide skilled nursing to Medicare beneficiaries. According to court documents, Ubani hired co-conspirators to recruit Medicare beneficiaries for the purposes of filing claims with Medicare for skilled nursing. Family Group then used the Medicare beneficiary numbers to submit claims to Medicare for skilled nursing that was medically unnecessary and/or not provided. Ubani admitted that he paid kickbacks to the recruiters for their referrals. In total, Family Group was paid approximately $5.2 million by Medicare for the submission of fraudulent claims.

At sentencing, scheduled for Feb. 25, 2011, Ubani faces a maximum sentence of 10 years in prison.

Today’s guilty plea was announced by Assistant Attorney General of the Criminal Division Lanny A. Breuer; U.S. Attorney José Angel Moreno of the Southern District of Texas; Special Agent-in-Charge Richard C. Powers of the FBI’s Houston Field Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS Office of Inspector General (HHS-OIG), Office of Investigations; and the Texas Attorney General Greg Abbott.

This case is being prosecuted by Trial Attorneys Charles D. Reed and Sam S. Sheldon of the Criminal Division’s Fraud Section. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.

Since their inception in March 2007, Medicare Fraud Strike Force operations in seven districts have obtained indictments of more than 810 individuals who collectively have falsely billed the Medicare program for more than $1.85 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.