Brookyln Medical Equipment Providers Charged in Alleged $13 Million Scheme to Defraud Government-Funded Health Plans
|U.S. Attorney’s Office May 13, 2014|
BROOKLYN—Earlier today, an indictment was unsealed charging Chikwere Onyekwere and Uchechi Onyekwere, registered owners and officers of purported durable medical equipment (DME) companies located in Brooklyn, New York, with executing a scheme to submit over $13 million in fraudulent claims to a New York-based, government-sponsored managed care organization. The defendants were arrested earlier this morning and will be presented for arraignment later today at the United States Courthouse, 225 Cadman Plaza East, Brooklyn, New York, before United States Magistrate Judge Joan M. Azrack.
The charges and arrests were announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; David O’Neil, Acting Assistant Attorney General of the Justice Department’s Criminal Division; George Venizelos, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office; and Thomas O’Donnell, Special Agent in Charge, Department of Health and Human Services-Office of Inspector General (HHS-OIG).
According to the indictment, beginning in approximately 2008 and continuing through at least the end of 2013, the defendants formed a series of sham DME companies which they used to submit fraudulent claims to the managed care organization for reimbursement for DME that was purportedly provided to the organization’s members, many of whom were elderly or disabled and had insurance through Medicare Part C Advantage Plans or New York Medicaid Managed Care plans. In an effort to make their sham companies appear legitimate, the defendants obtained Tax Identification Numbers from the Internal Revenue Service, opened bank accounts, and established phony business addresses for the sham companies at UPS Store locations and other addresses where the defendants lived. The defendants also gave names to the sham companies similar to DME companies that were approved providers in the managed care organization’s network of DME providers.
As part of the scheme, the defendants placed telephone calls in which they impersonated representatives of the approved DME providers to obtain preauthorization codes from the managed care organization for claim submissions. The defendants later submitted claim forms to the managed care organization referencing the preauthorization codes but sought payment in the name of the sham companies that they set up. The DME identified in the claim forms was not provided to the members of the managed care organization, many of whom called the managed care organization to complain. As alleged in the indictment, the sham DME companies associated with the defendants submitted over $13 million in fraudulent claims and were paid over $4 million for those claims.
“As alleged, the defendants used fictitious companies and fraudulent claims to steal very real health care dollars,” stated United States Attorney Lynch. “The Medicare and Medicaid systems serve our most vulnerable citizens, and those who seek to steal those tax dollars will be prosecuted to the fullest extent of the law.”
“Using cutting-edge, data-driven investigative techniques, we are bringing fraudsters to justice and saving the American taxpayers billions of dollars,” said Acting Assistant Attorney General David A. O’Neil of the Justice Department’s Criminal Division. “Overall, since its inception, the Department of Justice’s Medicare Fraud Strike Force has charged nearly 1,900 individuals involved in approximately $6 billion of fraud. We are committed to using every tool at our disposal to prevent, deter, and prosecute health care fraud.”
“Fraud against the government is fraud against every American taxpayer. We’ll continue to root out corruption wherever we find it,” stated FBI Assistant Director in Charge Venizelos
“The Brooklyn Strike Force will continue to vigorously investigate Medicare fraud at all levels,” said HHS-OIG Special Agent in Charge O’Donnell. “Sham DME companies need to be eradicated and the fraudsters need to be held accountable for their actions.”
The investigation has been conducted by the FBI and HHS-OIG, brought as part of the Medicare Fraud Strike Force, and supervised by the U.S. Attorney’s Office for the Eastern District of New York and the Criminal Division’s Fraud Section. The case is being prosecuted by Trial Attorney Turner Buford of the Criminal Division’s Fraud Section and Assistant United States Attorney Peter Baldwin of the U.S. Attorney’s Office for the Eastern District of New York.
The charges in the indictment are merely allegations, and the defendant is presumed innocent unless and until proven guilty. If convicted, the defendant faces a maximum sentence of 10 years.
Since their inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,900 defendants who have collectively billed the Medicare program for more than $6 billion. In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS- OIG, has removed over 17,000 providers from the Medicare program since 2011.
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