Houston Man Sentenced in Multi-State Health Care Fraud Scheme

SHERMAN, TX—A 55-year-old Houston man has been sentenced to federal prison for his role in a multi-state health care fraud scheme in the Eastern District of Texas, announced U.S. Attorney John M. Bales today.

Peter Pedro Egede pleaded guilty on April 4, 2013, to health care fraud and was sentenced to 87 months in federal prison today by U.S. District Judge Marcia A. Crone. Egede was also ordered to pay restitution in the amount of $1,635,447.60 to the Medicare and Medicaid programs and a fine of $12,500.

According to the indictment, from May 2002 to June 2003, Egede conspired with others to defraud Medicare and Medicaid through the mass marketing of motorized wheelchairs. As part of the scheme, the defendant and his co-conspirators recruited Medicare and Medicaid beneficiaries by representing that the government was “giving away” motorized wheelchairs. The recruiters would secure the beneficiaries’ protected health information, including names, dates of birth, and Medicare numbers from mostly elderly individuals. Egede and his co-conspirators created false medical necessity certificates for each beneficiary by drafting, without authorization, prescriptions from doctors who had never examined those beneficiaries. Often, Egede billed Medicare for motorized wheelchairs but instead delivered less expensive scooters to the beneficiaries. In other instances, Egede did not deliver anything, even though Medicare had paid for a motorized wheelchair. Claims were submitted by the defendant for more than 500 beneficiaries located in Texas, Oklahoma, Arkansas, Louisiana, and Mississippi. A great portion of the beneficiaries resided in counties within the Eastern District of Texas, including Smith, Bowie, Denton, and Lamar Counties. Egede submitted false and fraudulent claims to Medicare of more than $4.1 million and obtained more than $1.6 million in claims paid. Egede was indicted by a federal grand jury on June 15, 2006.

This case was investigated by the U.S. Department of Health and Human Services-Office of the Inspector General (HHS-OIG), the Federal Bureau of Investigation, and the Texas Office of the Attorney General-Medicaid Fraud Control Unit (OAG-MFCU). This case was prosecuted by Special Assistant U.S. Attorney Alma Hernandez.