Texas judge throws book at convicted durable medical equipment fraudster

by Ben Vernia | December 1st, 2010

On November 30, Southern District of Texas Judge Lynn Hughes sentenced Oliver Nkuku to ten years in federal prison following his conviction by a jury of health care fraud and conspiracy. Nkuku’s scheme involved false claims for durable medical equipment fraud submitted to Medicare, totaling over $1.1 million. In addition to the ten years (and three years of supervised release), Judge Hughes ordered Nkuku to pay over $400,000 in restitution. Nkuku’s partner in the conspiracy, Callistus Edozie, pleaded guilty before trial, and was sentenced to 41 months in prison and ordered to pay $80,000 in restitution.

Nkuku’s sentence is the maximum provided under the health care fraud statute (without taking into consideration multiple counts).

According to the Department of Justice’s press release:

Houston-area residents Oliver Nkuku and Callistus Edozie were sentenced to 120 months in prison and 41 months in prison, respectively, for their roles in a durable medical equipment (DME) Medicare fraud scheme, the Departments of Justice and Health and Human Services (HHS) announced today.

Nkuku was sentenced yesterday by U.S. District Court Judge Lynn Hughes to 120 months in prison and three years of supervised release. Nkuku was also ordered to pay $453,112 in restitution jointly and severally with Edozie. Edozie was sentenced today by Judge Hughes to 41 months in prison and three years of supervised release. Edozie was ordered to pay $80,000 in restitution jointly and severally with Nkuku.

According to court documents, Nkuku was the manager of and controlled the day-to-day operations of KO Medical Inc., a Houston-area DME company. Edozie was a delivery driver for KO. Nkuku was convicted of one count of conspiracy to commit health care fraud and three counts of health care fraud after a week-long trial in July 2010. Upon conviction, Judge Hughes ordered Nkuku detained prior to sentencing and he has remained in federal detention since his trial. Edozie pleaded guilty prior to trial to one count of conspiracy to commit health care fraud and one count of defrauding a health care benefit program.

KO began billing Medicare for fraudulent DME in 2007, according to court documents. According to evidence introduced at trial, Nkuku submitted over $1.1 million in claims to Medicare on behalf of KO for DME, including power wheelchairs, that was medically unnecessary. The wheelchairs and accessories were billed as catastrophe-related in connection with Hurricanes Katrina, Rita, Ike and Gustav, even though many of the Medicare beneficiaries, including some who testified at trial, had never owned a power wheelchair during these catastrophes or had owned one that was not damaged during these catastrophes. According to court documents and evidence introduced at trial, Nkuku was previously convicted of fraud, and he failed to admit that previous conviction on documents he submitted to Medicare.

Edozie, as a part of his plea, admitted to delivering medically unnecessary DME, including power wheelchairs, to Medicare beneficiaries whom he knew did not need, and in some cases did not even want, the DME.

The case was brought as part of the Houston Medicare Fraud Strike Force.

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