Former DME Company Owner Lands in Federal Prison for 12 Years

HOUSTON—Benjamin Essien, the former owner of durable medical equipment (DME) companies Logic World Medical and Roben Medical in Houston, has been sentenced to 145 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 morning, 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, 34, of Houston, previously pleaded guilty to one count of conspiracy to commit health care fraud, five counts of health care fraud, and two counts of aggravated identity theft prior to a trial earlier this year. In addition to the 12-year sentence, Judge Miller also ordered Essien to pay $1,455,837.91 back to Texas Medicaid.

Essien’s father and sister, Bassey Essien, 60, and Rose Essien, 31, were found guilty on April 7, 2011, following an eight-day trial. Bassey Essien was convicted of all 19 counts including conspiracy, health care fraud and aggravated identity theft, while Rose Essien was convicted of 11 counts of health care fraud and five counts of aggravated identity theft. They are scheduled to be sentenced by Judge Miller in January 2012 and have been released 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 defendants 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, 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.