Home Charlotte Press Releases 2010 Raleigh Man Sentenced for Making $12.64 Million in Fraudulent Medicare Claims
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Raleigh Man Sentenced for Making $12.64 Million in Fraudulent Medicare Claims

U.S. Attorney’s Office March 02, 2010
  • Eastern District of North Carolina (919) 856-4530

RALEIGH—United States Attorney George E.B. Holding announced that in federal court yesterday United States District Judge James C. Dever, III, sentenced KALU KALU, 46, of Raleigh, North Carolina, to 90 months’ imprisonment followed by three years supervised release. Restitution in the amount of $4,611,988 was also imposed.

A federal grand jury returned a criminal indictment on February 19, 2009. On September 8, 2009, KALU pled guilty to conspiring to commit health care fraud and aiding and abetting health care fraud.

According to the investigation, from approximately December, 2004, through July, 2008, KALU, d/b/a Enuda Healthsource, Universal Medical Supply, and States Medical Supply, along with a second co-defendant, Martin Ifeani Iroegbu, d/b/a Divine Medical Equipment, engaged in a scheme to bilk Medicare out of over $12.64 million by causing fraudulent payments to be made by Medicare for durable medical equipment (DME) that was either not necessary, not needed, or not delivered.

The investigation revealed that employees of the companies would give presentations at patient's homes or churches giving the impression that Medicare was giving DME to those patients that asked for it at no cost to the patient. The Medicare beneficiaries would then be asked about their medical conditions and the names of their physicians and their Medicare numbers would be obtained. A physician order/prescription form (“prescription”), would then be completed with the original being sent to the primary physician for the physician's signature and then returned. Often times the “prescriptions” were denied, or sometimes the physicians would mark through the items not needed and sign for other items that they felt were needed.

The defendants would still bill Medicare for DME that was denied by the physicians, that was not medically necessary, that was not requested by the patient’s physician, or, in some cases, that was not the correct item or that was never delivered to the patient. Often times, the defendants would bill Medicare for more expensive equipment than was delivered to the medicare beneficiaries.

Mr. Holding commented, “The Medicare system was enacted to assist retired and elderly citizens in obtaining needed health care. Unfortunately, this defendant targeted this system as an easy mark, bilking the American taxpayer out of millions of dollars. We stand committed to assist our federal investigative agencies in bringing to justice those who illegally benefit from a system in which hardworking, honest taxpayers have invested.”

Investigation of this case was conducted by the Office of Health and Human Services, Office of Investigations and the Federal Bureau of Investigations. This case is being handled by the Office’s Economic Crimes Section, with Assistant United States Attorney Felice McConnell Corpening assigned as prosecutor.
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