Yesterday, U.S. District Judge John F. Walter sentenced DME fraud conspirator Leonard Nwafor to nine years in prison, three years of supervised release, $526,243 in restitution, $25,000 in fines, and criminal forfeiture of more than $526,000. The only problem: he ran. Nwafor, the owner of Pacific City Group (a/k/a Pacific City Medical Equipment) is considered a fugitive and is being tracked by federal agents. Convicted at trial in September of 2008 of conspiracy to commit health care fraud and health care fraud, DoJ says the following about his DME scam:

“At trial, elderly and disabled Medicare beneficiaries testified that individuals known as “marketers” approached them on the street, at home or in church and encouraged the beneficiaries to give the marketers their Medicare numbers and other personal information in exchange for free power wheelchairs. Evidence presented at trial established that Nwafor billed Medicare for power wheelchairs on behalf of more than 170 beneficiaries, none of whom actually needed the wheelchairs.”

Such guerilla tactics all-too-frequently are becoming the norm in the loosely-patrolled world of direct-to-patient DME marketing. The Medicare rules regarding DME fraud specifically forbid cold-calls to patients and payments for customer referrals. The evidence in the Nwafor trial was particularly ugly:

One beneficiary, who was blind, testified that he could not see to operate the wheelchair and never used it. The same beneficiary also testified that a delivery driver working for Nwafor and the delivery driver’s girlfriend paid him $200 to refer them to other Medicare beneficiaries.

Deliberately misleading patients and bullying them has become a particular interest to HHS investigators and is one of the most obvious signs of a fraudluent, unscrupulous company. On March 3, FraudBlawg reported the conviction of a DME marketer with indirect ties to Nwafor who wore a badge with her picture on it to make herself look like a hospital official and gain credibility with hospital patients. The testimony against Nwafor demonstrated even worse deception and bullying of Medicare beneficiaries:

“Another beneficiary testified about the aggressive techniques marketers used to recruit her and her husband into the fraudulent scheme. This beneficiary testified that an individual purporting to be from Medicare, but who was actually associated with Nwafor and his co-conspirators, threatened to terminate the Medicare benefits of the beneficiary and her husband unless they accepted two power wheelchairs that the beneficiary and her husband did not need.”

If you are aware of such fraudulent marketing tactics or other DME fraud, contact Frohsin & Barger.