Saturday, May 11, 2013

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Former Fugitive Sentenced to Prison Following State and Federal Investigation of a $45 Million Medicare and Medicaid Health Care Fraud Conspiracy

The U.S. Attorney for the Southern District of Texas issued the following news release on May 10, 2013:

Former Nigerian Fugitive Heads to Prison in Multi-Million Dollar Fraud Scheme

HOUSTON Godwin Chiedo Nzeocha, 56, a naturalized United States citizen originally from the Federal Republic of Nigeria, has been sentenced to 109 months in federal prison for his role in the multi-million dollar City Nursing health care fraud scheme, United States Attorney Kenneth Magidson announced today.

Nzeocha entered a guilty plea on Oct. 19, 2012 to one count of conspiracy to commit health care fraud and one count of money laundering. Nzeocha is the 8th person to be convicted in the $45 million Medicare and Medicaid health care fraud conspiracy.

Today, U.S. District Judge Melinda Harmon, who accepted the guilty plea, handed Nzeocha the more than nine-year sentence after giving him credit for 12 months in custody in the Federal Republic of Nigeria. Judge Harmon cited the huge financial loss to the Medicare program as a significant factor in her sentencing decision, along with the use of mass-marketing and the defendant’s role as a manager and supervisor at the fraudulent physical therapy clinic. Nzeocha was further ordered to pay more than $26 million in restitution to Medicare and Medicaid, jointly and severally with his convicted co-conspirators. As part of his October plea, Nzeocha agreed to forfeit to the United States $1,098,320 given to him by the owner of City Nursing.

According to the plea agreement, Nzeocha left the United States in 2009 to avoid arrest after receiving a telephone call from a City Nursing co-conspirator the day Umawa Imo, owner of City Nursing Services of Texas Inc., was arrested. Nzeocha admitted he had an agreement with Imo to sign his name on City Nursing patient documents as the provider of physical therapy services that he knew he was not qualified nor did provide to Medicare beneficiaries. The documents included blank treatment data forms, progress notes and daily physical therapy records. Nzeocha further admitted to knowing Imo was buying Medicare beneficiary information from recruiters and paying Medicare beneficiaries cash in order to bill for physical therapy services that were not provided. Nzeocha received approximately $1,098,320 from City Nursing.

Between Dec. 3, 2007, and June 26, 2009, when Nzeocha worked at City Nursing, the company billed Medicare and Medicaid for approximately $35,819,508 worth of physical therapy services that were not provided and received approximately $26,233,122 as payment for those services from Medicare and Medicaid.

Nzeocha is the 8th person to be convicted in relation to the City Nursing health care fraud scheme, including Imo, who was sentenced to 327 months in federal prison.

Nzeocha will remain in custody pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.

This case has been investigated by the FBI, Internal Revenue Service Criminal Investigation, the Department of Health and Human Services' Office of Inspector General and the Texas Attorney General's Medicare Fraud Control Unit. Assistant United States Attorney Julie Redlinger is prosecuting the case.