Wheels of Misfortune

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One of the most wanted fugitives responsible for a Medicare power wheelchair fraud scheme has been nailed and will be jailed for the next nine years. He was not featured on a ”Most Wanted” television show, but according to today’s Fraud of the Day from MSN Online, he definitely made the top of the ”Health Care Fraud Most Wanted” list maintained by the Office of the Inspector General at the U.S. Department of Health and Human Services (HHS). He was even on the U.S. Postal Inspection Service’s Top 10 Most Wanted Fugitives’ list.

In the fall of 2008, a jury convicted the criminal of conspiracy and health care fraud for submitting false claims to Medicare, the U.S. government’s health-care program for the elderly and the disabled. After failing to show up for his sentencing in 2009 (he had already fled California and was on the lam), he was sentenced in absentia to nine years in federal prison in 2010 and ordered to pay back more than $525,000 in restitution , $25,000 in fines and forfeit more than $525,000 in stolen Medicare funds to the federa? government. He was also ordered to serve three years of supervised release following his prison term.

So how did he do it? Through his Los Angeles-based durable medical equipment (DME) company, the fraudster used Los Angeles-area physicians’ Unique Provider Identification Numbers, which appear on prescriptions to file fraudulent beneficiary claims mostly for motorized wheelchairs costing $7,000 on average. After his conviction, the fraudster admitted to paying a co-conspirator up to $1,300 per prescription to support his fraudulent Medicare claims (Still a pretty swell profit margin). Other claims were for big ticket items such as scooters and hospital beds – all expensive accessories that beneficiaries did not need.

During the trial, multiple beneficiaries testified that they had been approached by ”marketers” on the street, in their homes or even in church (now that’s low) and were encouraged to hand over their Medicare numbers and personal information in exchange for free power wheelchairs (Don’t they know that nothing is free?). Evidence showed that the DME company owner submitted claims for more than 170 beneficiaries, including one blind man who testified that he couldn’t see to operate the wheelchair. Other beneficiaries stated that they had been threatened by individuals claiming to represent Medicare; however, they were actually associated with the fraudster’s company. They were told that their Medicare benefits would be terminated if they did not accept the power wheelchairs (that they didn’t need). The fraudster was reported to have paid ”patient recruiters” $100 for each reference provided for other Medicare patients who would take a power wheelchair.

Today, fraudulent DME equipment companies are utilizing forceful direct marketing tactics to obtain patients. This fugitive and his co-conspirators were bullies and their guerilla marketing tactics are detestable.

The Office of Inspector General at HHS started the list of 170 health fraud fugitives about 18 months ago to raise awareness about the importance of combating health care fraud. Since its inception, 18 have been arrested.

To avoid being a victim of DME Medicare fraud, patients should be cautious of providers who solicit business by offering kickbacks for taking an exam. Be wary of medical professionals or sales representatives who try to push expensive tests, procedures, or medical equipment procedures. Also, check all medical bills to verify the accuracy of charges.

The DME company owner was a master at paperwork and kept elaborate paper files, including the fake prescriptions and client photos in their wheelchairs. Investigators knew something was awry when they discovered that most of the beneficiaries lived nearly 200 miles from the Los Angeles-area store.

Source: Today’s ”Fraud of the Day” is based on an article titled, ”Cops: Fugitive Behind $1 million Medicare Fraud Nabbed in Canada,” published in MSN Online on January 3, 2013.

TORONTO — An American fugitive convicted in a $1-million health-care fraud scheme in California was arrested Wednesday in Canada.

Police said Leonard Nwafor was detained on an extradition warrant at his Toronto residence. The U.S. Marshals Service contacted Toronto authorities in August to seek their help in finding Nwafor and issued the extradition warrant last month.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.