California medical equipment company convicted of defrauding Medicare
A federal jury this week convicted the owner and operator of Pacific City Group, Inc., a Los Angeles-based durable medical equipment company, of defrauding the Medicare program of more than $1.1 million.
After a one-week trial, the jury found Leonard Uchenna Nwafor guilty on all counts, including conspiracy to commit healthcare fraud and healthcare fraud. U.S. District Judge John F. Walter of the Central District of California set Nwafor's sentencing for Dec. 1, 2008.
According to evidence presented at his trial, Nwafor owned and operated a DME supply company named Pacific City Group, Inc., also known as Pacific City Medical Equipment. Between January 2006 and May 2008, Nwafor billed Medicare $1,109,438 through Pacific City and was paid $526,243 as a result of that billing.
Thomas P. O'Brien, U.S. Attorney for the Central District of California, said evidence revealed that nearly all of the bills were for medically unnecessary motorized wheelchairs and wheelchair accessories. Even though Pacific City is a Los Angeles-area store, trial testimony indicated, the majority of the Medicare bills were submitted on behalf of Medicare beneficiaries in northern California and elsewhere who did not live near Pacific City.
Elderly and disabled Medicare beneficiaries testified on behalf of the government that they were encouraged to turn over their Medicare numbers and other personal identifying information in exchange for a free motorized wheelchair. Nwafor then billed Medicare for motorized wheelchairs on behalf of more than 170 beneficiaries, none of whom needed the wheelchairs for which Pacific City billed Medicare. The evidence also showed that some beneficiaries were not even able to use a wheelchair.
Los Angeles-area physicians also testified that phony prescriptions bearing their names were used to justify the bills to Medicare. The physicians testified that the prescriptions were for patients they had never seen, for diagnoses outside their area of specialty and in writing that was not their own. One doctor, a psychiatrist, testified that he had never written a DME prescription for a power wheelchair during his career.
The case is a victory for the U.S. DOJ's Medicare Fraud Strike Force. Since the inception of MFSF operations in 2007, federal prosecutors have indicted 103 cases with 175 defendants in Los Angeles and Miami. Collectively, these defendants fraudulently billed the Medicare program for more than half a billion dollars.
