Federal Jury Convicts Houston Doctor and Others in Medicare Fraud Scheme

HOUSTON—After approximately 12 hours of deliberation, a Houston jury has convicted Umawa Imo, 57, a citizen of the Federal Republic of Nigeria; Kenneth Anokam, 56, a naturalized citizen; and Houston physician Dr. Christina Clardy, 61, United States Attorney Angel José Moreno announced today. Clardy, previously released on bond, was taken into custody after the verdict was returned. Imo and Anokam, already in federal custody since 2009, were ordered to remain in custody. Dr. Thaddeus Hume, 63, another Houston-area physician, was acquitted of all charges.

Today’s verdict found Imo guilty of conspiracy to commit health care fraud, 39 counts of health care fraud, three counts of mail fraud, and five counts of money laundering; Anokam was found guilty of conspiracy, 27 counts of health care fraud, and four counts of structuring; while Clardy was found guilty of conspiracy, 14 counts of health care fraud, and three counts of mail fraud.

The second superseding indictment, returned on March 25, 2010, charged Imo, Anokam, Clardy, Hume, and two others—who are believed to have fled the United States—with various federal crimes, including one count of conspiracy to commit health care fraud and 39 substantive health care fraud counts. Three counts of mail fraud were also charged which related to paper checks valued at approximately $180,448 that were mailed by the Medicaid contract administrator, Texas Medicaid and Healthcare Partnership, to City Nursing Services of Texas Inc., a business owned by Imo, in lieu of electronic fund deposits. The charged also included five counts of money laundering related to five transactions totaling $2,805,195 from a City Nursing bank account for referrals, the purchase and shipping of tankers to Lagos, Nigeria, as well as a check for more than $1 million payable to Imo himself and four counts of structuring financial transactions to avoid reporting requirements related to a series of bank withdrawals over a two-week period by Anokam. Another co-defendant, Joann White, pleaded guilty to conspiracy to commit health care fraud on Feb. 12, 2010 and was called to testify at the trial by the United States.

During the 13-day trial beginning May 9, 2011, the jury learned that City Nursing Services of Texas Inc., a clinic located on the 9800 block of Bissonnet Street in Houston, billed Medicare and Medicaid for approximately $45 million worth of physical therapy services they did not provide over a two-and-a-half-year period. By March 2009, Medicare and Medicaid had paid approximately $30 million on the physical therapy claims. Between March 2009 and June 2009, approximately $4 million in payments were withheld by Medicare due to lack of documentation of services rendered.

Jurors heard testimony from numerous Medicare and Medicaid beneficiaries about how they were paid for coming to the clinic and signing undated blank treatment forms. One beneficiary testified that when she asked for physical therapy she was told the clinic did not provide that type of services and was instructed to go to her primary care physician for a referral. Another beneficiary described the clinic as looking like an unemployment office with people just hanging out and referred to a day when he saw an employee direct a patient to make a pot of coffee. There was no licensed physical therapist working at the clinic and “treatments” were predominantly limited to short massages and hot packs. Beneficiaries could use the treadmills and other exercise equipment at their own will. Three former employees of the clinic testified about how they handed out cash given to them by Imo and Anokam to beneficiaries and to “recruiters” or “marketers” who brought beneficiaries to the clinic. Beneficiaries were paid once a month when they came to see the doctor; however, those beneficiaries who took Medicare Explanation of Benefit statements into the office to complain about the fraudulent billing were given extra payments, sometimes $200 - $300, to “settle” matters. The employees also testified about how the clinic billed Medicare for treatment that was not provided, including treatment for numerous individuals who were deceased. According to the employees, Imo and Anokam enlisted their help to create false and fraudulent patient file documents to reflect physical services that had not been provided.

Medicare and Medicaid experts explained to the jury that when physical therapy services are billed under a physician’s Medicare provider number, as was the case here, the physician must be qualified to provide physical therapy and either personally provide the services, or be present in the office directly supervising the provision of the services.

Clardy took the stand and testified that she did not sign certain Medicare and Medicaid documents; however, she was unable to recall whether or not she had authorized anyone else to sign the documents. The United States introduced a letter sent by Clardy to the owner of the clinic, Imo, in July of 2007—a year before she left the clinic. The letter showed her knowledge of the fraudulent activities at the clinic and requesting that Imo immediately cease billing Medicare under her physician provider number. In it, Clardy also threatened to notify Medicare of the fraud. The United States also introduced evidence showing that not long after the July 2007 letter, Clardy began receiving substantial monthly payments from Imo along with evidence that Clardy allowed Imo to fraudulently bill an additional $21 million under her number between August 2007 and August 2008. A total of $29 million was billed under Clardy’s Medicare number by City Nursing.

United States District Court Judge Melinda Harmon, who presided over the case has scheduled sentencing for Sept. 9, 2011, for the defendants. The possible punishment for health care fraud, conspiracy to commit health care fraud, and money laundering is a maximum 10 years in prison and a $250,000 fine, while mail fraud carries a possible punishment of up to 20 years in prison. Structuring carries a possible punishment of up to 10 years in prison and a $500,000 fine.

The investigation into Imo, Anokam, White, Hume, Clardy, and City Nursing was the result of a joint investigation by agents of the FBI, Internal Revenue Service-Criminal Investigations, the Department of Health and Human Services-Office of Inspector General, and the Texas Attorney General’s Office-Medicare Fraud Control Unit. Assistant United States Attorneys Julie Redlinger and Mark Donnelly are prosecuting the case.