DME Company Owner and Marketers Convicted of Defrauding Medicare of Millions

HOUSTON—A federal jury has convicted a durable medical equipment (DME) company owner and two marketers of defrauding both federal health care programs—Medicare and Medicaid—United States Attorney José Angel Moreno announced today.

Lia St. Junius, 25, the owner of The Mobility Store—a Houston area DME company—and Devon Spicer, 48, and Martha Ramos, 57, all of Houston, were found guilty late Friday afternoon by a jury following a two-week trial. Medicare and Medicaid are health care benefit programs funded by the federal government which pay for health care services provided to the elderly, the blind and disabled.

The indictment, returned in October 2010, charged St. Junuis, Spicer, and Ramos, along with James Claude Reese Jr., Brenda Lopez, and Lily Johnson, with the commission of various federal crimes including conspiracy to commit health care fraud, health care fraud, paying or receiving kickbacks, money laundering, and tax evasion. Today’s verdicts found St. Junius guilty of conspiracy to commit health care fraud and paying kickbacks for the referral of Medicare beneficiaries and Medicaid recipients, health care fraud, and conspiracy to commit money laundering. Ramos and Spicer were convicted of receiving kickbacks for referring Medicare beneficiaries and Medicaid recipients to The Mobility Store.

St. Junius was convicted of conspiracy to commit health care fraud, counts 10 through 16 of substantive health care fraud, and conspiracy to commit money laundering, but acquitted on substantive health care fraud counts two through nine. Through their verdicts, the jury found that St. Junius conspired to defraud Medicare and Medicaid by billing Medicare and Medicaid for orthotic braces and devices, referred to as “The Artho Kit” that were different than equipment that was provided to Medicare beneficiaries or not ordered by a physician. During the trial, several witnesses testified that in May 2004, St. Junius had submitted an application with Medicare to become enrolled as a DME company called The Mobility Store. Although the application requested the name of all persons who had an ownership interest in the company, St. Junius failed to reveal that co-defendant James Reese was involved in the company. Reese, who pleaded guilty to health care fraud and tax evasion before trial, had previously operated a DME that had been suspended for submitting fraudulent claims. Between 2005 and 2008, St. Junius submitted fraudulent documents to Medicare indicating that Reese was not involved in the operation of The Mobility Store and that marketers were not soliciting Medicare beneficiaries. The jury also heard testimony that St. Junius paid marketers 10 percent of the amount received from Medicare for each orthotic brace or device billed.

Spicer was convicted on all substantive counts of receiving kickbacks based upon evidence presented that showed her referral of Medicare beneficiaries in 2005 to The Mobility Store resulted in $750,000 being paid by Medicare. Spicer received approximately $75,000 during 2005. The jury acquitted Spicer of conspiracy to commit health care fraud. Ramos was also acquitted of the conspiracy charge but found guilty on all substantive counts of receiving kickbacks based upon evidence that as a result of referrals by her, The Mobility Store was paid $40,000 and Ramos received approximately $4,000.

In 2008, Medicare revoked The Mobility Store’s provider number because of its failure to provide accurate information about its operation procedures. As a result of the fraudulent scheme, The Mobility Store billed Medicare and Medicaid more than $10 million and was paid more than $5 million. Through testimony, the jury heard that St. Junius purchased several expensive cars and a home valued at more than $650,000 with proceeds from the fraudulent scheme.

Immediately following the return of the verdicts, United States District Judge David Hittner, who presided over the trial, revoked each defendant’s bond and ordered that each be remanded into the custody of the U.S. Marshals Service.

St. Junius faces a maximum of 20 years in prison and a fine of up to $500,000 for his convictions. Spicer and Ramos each face up to a five-year maximum prison term and a $250,000 fine for their convictions. A sentencing date has not been set. The three others charged for their involvement in this health care fraud scheme—Reece, Lopez, and Johnson—pleaded guilty to conspiring to commit health care fraud in advance of trial. A sentencing date for these three defendants has yet been set.

This case was investigated by the FBI, the U.S. Department of Health and Human Services Office of Inspector General, Internal Revenue Service Criminal Investigations, and the Medicaid Fraud Control Unit of the Texas Attorney General’s Office. Assistant United States Attorney Samuel Louis and Special Assistant United States Attorney Suzanne Bradley tried the case before the jury.