Former DME Company Owner Lands in Federal Prison

HOUSTON—Bassey Essien, the former co-owner of durable medical equipment (DME) companies Logic World Medical and Roben Medical in Houston, has been sentenced to 99 months in federal prison for defrauding the Texas Medicaid program, United States Attorney Kenneth Magidson announced today along with Texas Attorney General Greg Abbott. During sentencing this afternoon, U.S. District Judge Grey Miller explained that the Medicaid beneficiaries whose identities had been unlawfully used to defraud the government, were also to be considered victims of the scheme to defraud.

Essien, 60, of Houston, was convicted after a jury trial in April 2011 of one count of conspiracy to commit health care fraud, 14 counts of health care fraud and four counts of aggravated identity theft. In addition to the prison term, Judge Miller also ordered Essien to pay $1,455,837.91 back to Texas Medicaid.

Essien’s son and daughter, Benjamin Essien, 34, and Rose Essien, 31, have also been convicted for their roles in the scheme to defraud Medicaid. Benjamin Essien pleaded guilty in January 2010 and was sentenced to 12 years and one month. Rose Essien was also convicted in the April 2011 trial, is set for sentencing later this month and remains on bond pending that hearing.

Through the operation of both DME companies, the Essiens unlawfully received Medicaid beneficiaries’ information—names, addresses, and Medicaid numbers—which they then used to file false claims with the Medicaid program. The evidence presented at trial demonstrated that the Essiens routinely billed Medicaid for adult urinary incontinence supplies they did not deliver to the Medicaid beneficiaries or for delivering supplies in amounts significantly less than the amounts billed to Medicaid. Additionally, the Essiens routinely billed Medicaid for adult urinary incontinence supplies provided to Medicaid beneficiaries who either did not need the supplies or whose physicians had not prescribed them. Adult incontinence supplies include adult diapers, underpads, wipes, and pull-up briefs.

Through their DME company, the Essiens continued to bill Medicaid for incontinence supplies even after their delivery staff and/or delivery contractors were told by the beneficiaries they did not need or want the supplies. They regularly billed Medicaid for the delivery of 300 diapers—the maximum allowed amount of incontinence supplies each month per beneficiary—and for extra large size diaper briefs—which have the highest Medicaid reimbursement rate—without consideration to the actual size needed by the beneficiary. They even billed Medicaid for delivering a quantity of extra large adult size diapers far in excess of the amount they purchased from wholesale suppliers. The evidence showed the defendants only purchased six percent of the amount of extra large diapers they claimed to have delivered. The scheme to defraud began in April 2004 under Logic World with the last false claim having been filed in February 2010 under the name Roben Medical. The Essiens billed Medicaid for claims totaling approximately $2,341,293.64, and received payments for those claims totaling approximately $1,455,837.91.

Following the sentencing hearing, Bassey Essien was remanded to federal custody where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

This case was the result of the investigative efforts of the Department of Health and Human Services-Office of the Inspector General, the Texas Attorney General’s Medicaid Fraud Unit in Houston and the FBI. Special Assistant United States Attorney Justo A. Méndez and Assistant United States Attorney Al Balboni prosecuted the case.