DME Owner Sentenced to Prison for Health Care Fraud

Almost $1 Million in Restitution Ordered

HOUSTON—An owner of a durable medical equipment (DME) company has been sentenced to prison for defrauding the Medicaid health care program of approximately $1 million by submitting false and fraudulent claims for incontinence supplies, United States Attorney José Angel Moreno and Texas Attorney General Greg Abbott announced today.

Fred Jessie Cole Jr., of Houston, was sentenced on Wednesday, Sept. 15, 2010, to 46 months in federal prison by United States District Judge Lee H. Rosenthal. Cole, 44, who was a co-owner of Crusade Integrated Health Services, a DME company located in Houston, was indicted in January 2010 and pleaded guilty on April 5, 2010, to 14 counts of health care fraud.

Cole has admitted that between May 2003 through September 2006, he submitted false and fraudulent claims to the Texas Medicaid Program for incontinence supplies such as diapers and briefs that were not delivered to Medicaid beneficiaries, not wanted by Medicaid beneficiaries and not medically necessary.

In addition to the prison term, Judge Rosenthal has ordered Cole to pay $937,567.54 to the Medicaid program which represents the amount he was paid for the false and fraudulent claims he had submitted to the health care program and to serve a three-year term of supervised release upon completion of his prison term.

The investigation leading to the charges against Cole was a joint effort conducted by agents of the Texas Attorney General Medicaid Fraud Control Unit and the FBI. Special Assistant United States Attorney Julie Redlinger prosecuted along with Assistant United States Attorney (AUSA) Kristine Rollinson responsible for asset forfeiture issues and AUSA Carolyn Ferko, who represented the United States at yesterday’s sentencing hearing.