Three Houston Defendants Plead Guilty in Connection With “Arthritis Kit” Fraud Scheme

March 1, 2010 - Bassey Monday Idiong, Linda Eteimo Ere Kendabie and Modupe Babanumi each pleaded guilty today in connection with their roles in an "arthritis kit" Medicare fraud scheme, announced Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney José Angel Moreno of the Southern District of Texas; Richard C. Powers, Special Agent-in-Charge of the FBI’s Houston office; and Special Agent-in-Charge Mike Fields of the Dallas Regional Office of the Department of Health and Human Services (HHS), Office of Inspector General (OIG), Office of Investigations.

Idiong, 30, was the owner of B.I. Medical Supply LLC, a Houston-area durable medical equipment (DME) company. Kendabie, 27, was an administrative assistant at B.I. Medical and Babanumi, 42, was a patient recruiter. Kendabie and Babnumi each pleaded guilty to conspiracy to commit health care fraud. Idiong pleaded guilty to conspiracy to commit health care fraud and to five counts of health care fraud.

The defendants admitted that B.I. Medical billed Medicare for expensive, rigid orthotics and braces that were packaged together and referred to as an "arthritis kit," at a cost of approximately $4,000 per kit, when in fact, they were supplied with different, less expensive products. The defendants also admitted that the equipment supplied was not medically necessary. In one instance, according to the plea agreements, B.I. Medical billed Medicare for an arthritis kit that included two knee braces for a beneficiary who had only one leg. In total, B.I. Medical submitted approximately $846,000 in fraudulent claims to Medicare.

U.S. District Court Judge Vanessa Gilmore of the Southern District of Texas accepted the defendants’ guilty pleas and scheduled sentencing for June 14, 2010. The defendants each face a maximum penalty of 10 years in prison and a $250,000 fine, per count.

The case was prosecuted by Assistant Chief John S. (Jay) Darden and Trial Attorneys Jennifer L. Saulino, John Cunningham and Katherine Houston of the Criminal Division’s Fraud Section, and was investigated by the FBI, HHS-OIG and the Railroad Retirement Board, OIG.

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, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for more than $1.1 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.