Federal Grand Jury Indicts North Texas Men for Running Medicare Fraud Scheme
Defendants Allegedly Submitted More than $500,000 in Fraudulent Claims

DALLAS—Okey F. Nwagbara, 45, Plano, Texas, and Jerry C. Bullard, 55, Mesquite, Texas, were indicted on felony charges related to a health care fraud scheme they allegedly ran that defrauded Medicare of more than $500,000, announced U.S. Attorney Sarah R. Saldaña of the Northern District of Texas. Nwagbara appeared in federal court today and was detained, pending a detention hearing set for Wednesday, October 19; Bullard is scheduled to have his initial appearance on October 21.

Specifically the indictment, unsealed today, charges Nwagbara and Bullard each with one count of conspiracy to commit health care fraud and six substantive counts of health care fraud. Nwagbara is the owner/operator of Advanced MedEquip and Supplies Limited, located at 331 Melrose Drive in Richardson, Texas. Bullard is a former employee of Medistat Group Associates, P.A., an association of health care providers located in Desoto, Texas.

The indictment alleges that from June 2008 through March 2010, Nwagbara and Bullard conspired together to defraud Medicare by 1) submitting false and fraudulent claims to Medicare; 2) concealing the submission of those false and fraudulent claims, as well as the receipt and transfer of the fraud proceeds; and 3) diverting the fraud proceeds for their personal use. Bullard worked in the Durable Medical Equipment (DME) section of Medistat where he was in charge of handling physicians’ prescriptions for equipment. Bullard and Nwagbara had a kickback arrangement and Bullard placed orders for DME with Nwagbara’s company, Advanced.

The indictment further alleges that Bullard, using a Medistat physician’s name, would sign prescriptions, DME information forms and certificates of medical necessity for Medicare beneficiaries falsely indicating, among other things, that a beneficiary had a feeding tube when in fact, the beneficiary did not. The enteral nutrition products which were billed to Medicare are consumed by a patient through a feeding tube. The associated feeding supply kits include tubing and syringes. Both the enteral formula and the kits that Advanced billed to Medicare were not medically necessary because the beneficiaries were not receiving nutrition through a feeding tube. Instead, beneficiaries were receiving flavored nutritional supplements such as Ensure® and Glucerna® that would be consumed orally—Medicare does not reimburse orally ingested nutritional supplements. In addition, Nwagbara supplied only a fraction of the enternal products for which he billed Medicare and many of the beneficiaries never received the feeding supply kits for which he also billed Medicare.

The indictment alleges that Nwagbara and his co-conspirators caused the submission of more than $500,000 in claims to the Medicare program for enternal nutrition DME, when in fact such DME was not medically necessary and in many cases, not provided.

An indictment is an accusation by a federal grand jury, and a defendant is entitled to the presumption of innocence unless proven guilty. If convicted, however, the conspiracy to commit health care fraud count and the six substantive health care fraud counts each carry a maximum statutory sentence of 10 years in prison and a $250,000 fine. The indictment also includes a forfeiture allegation which would require the defendants, if convicted, to forfeit proceeds traceable to their offenses.

The case is being investigated by the Dallas Health Care Fraud Prevention and Enforcement Action Team (HEAT) Strike Force, which includes the U.S. Department of Health and Human Services - Office of Inspector General, the FBI and the Texas Attorney General’s Medicaid Fraud Control Unit. To learn more about the HEAT Strike Force, please visit: http://stopmedicarefraud.gov

Assistant U.S. Attorneys Michael Elliott and Mindy Sauter are in charge of the prosecution.