Owner of Houston Health Care Company Sentenced to 41 Months in Prison in Connection with $1.3 Million Medicare Fraud Scheme

WASHINGTON – An owner and operator of a Houston durable medical equipment (DME) company was sentenced today in Houston federal court to 41 months in prison for his role in a Medicare fraud scheme, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).

Ekpedeme Obot, 35, of Houston, was sentenced by U.S. District Judge Lee Rosenthal in Houston.   In addition to his prison term, Obot was sentenced to three years of supervised release and was ordered to pay $945,637 in restitution.

Obot pleaded guilty on June 22, 2011, to one count of making false statements relating to health care matters and one count of health care fraud.

According to court documents, Obot was an owner and operator of Praise DME, a company that purported to provide orthotics and other DME to Medicare beneficiaries.  According to court documents, Praise submitted claims to Medicare for DME, including orthotic devices, which were medically unnecessary and/or not provided.  Many of the orthotic devices were components of an “arthritis kit,” and were purported to be for the treatment of arthritis-related conditions.   The arthritis kit generally contained a number of orthotic devices including braces for both sides of the body and related accessories such as heat pads.  From March 2007 through August 2008, Obot submitted claims of more than $1.3 million to Medicare and was paid approximately $945,637.

In addition, according to court documents, Obot admitted that he made false statements to Medicare in his supplemental Medicare Enrollment Application when he failed to provide information about a prior felony conviction.   Specifically, the Medicare Enrollment Application included a section entitled “Adverse Legal Actions/Convictions,” which required DME providers to list prior felony convictions.   Obot was convicted on March 5, 2007, in Harris County, Texas, on a felony theft charge.   In his application, he represented only that he had been subject to a recoupment action by Texas Medicaid in November 2006 that was resolved by entering into a payment plan.

Today’s sentence was announced by Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney Kenneth Magidson of the Southern District of Texas; Special Agent-In-Charge Stephen L. Morris of the FBI’s Houston Field Office; Special Agent-in-Charge Mike Fields of the Dallas Regional Office of HHS’s Office of the Inspector General (HHS-OIG), Office of Investigations; Joseph J. Del Favero, Special Agent-in-Charge of the Chicago Field Office of the Railroad Retirement Board Office of Inspector General; and the Texas Attorney General’s Medicaid Fraud Control Unit (MFCU).

This case was prosecuted by Special Assistant U.S. Attorney Justin Blan and Trial Attorney Laura M.K. Cordova of the Criminal Division’s Fraud Section.  The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Southern District of Texas and the Criminal Division’s Fraud Section.

Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,140 defendants who collectively have falsely billed the Medicare program for more than $2.9 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers..