HOUSTON BUSINESS OWNERS ACCUSED IN $36.9 MILLION FRAUD OF MEDICARE & MEDICAID CLAIMS

(HOUSTON, Texas) - A 73-count indictment charging six persons-including the owners of four Durable Medical Equipment (DME) companies and a billing company-with conspiracy, health care fraud, wire fraud and money laundering in a scheme to defraud Medicare of nearly $37 million has been unsealed, United States Don DeGabrielle announced today.

The criminal charges are the result of a joint investigation being conducted by agents of the U.S. Department of Health and Human Services-Office of Inspector General (HHS-OIG), the Internal Revenue Service Criminal Investigation Division (IRS-CID), the FBI, and the Medicare Fraud Control Unit of the Texas Attorney General's Office (MFCU) into the rampant and flagrantly fraudulent billing of Medicare and Medicaid by unscrupulous DME company owners.

The indictment, returned under seal Thursday, Dec. 13, 2007, was unsealed today following the arrest of Rhonda Fleming, 42, Bose Ebhamen, 41, Khira Guillory, 27, Billy Perkins, 48, James Chaney, 44, and King Arthur, 53, by teams of investigating agents. Fleming was arrested in Dallas Tuesday, Dec. 18 and has been ordered temporarily detained pending a hearing in Dallas tomorrow for bond determination. Chaney is in state custody on unrelated charges and is expected to make his initial federal appearance in the near future. Ebhamen, Guillory, Arthur and Perkins all appeared before a U.S. Magistrate Judge in Houston today. Ebhamen, Guillory and Arthur have been ordered released from custody upon the signature of a co-signer on a $100,000 bond, while Perkins has been ordered temporarily detained pending a bond determination hearing also tomorrow at 2:00 p.m.

The scheme alleged in this 73-count indictment involved the filing of millions of dollars in claims with Medicare/Medicaid by DME companies for durable medical equipment, such as infrared heating systems, pressure reducing mattresses and lumbar supports, which they purportedly supplied to Medicare beneficiaries, but were never purchased by the DME company nor delivered to the beneficiary.

Fleming, Ebhamen, Guillory, Perkins, Chaney Arthur are all charged with conspiracy to defraud the Medicare and Medicaid programs of almost $37 million. All six defendants are also charged with multiple counts of healthcare fraud and wire fraud. Four of the defendants, Fleming, Ebhamen, Guillory and Chaney, are also charged with various counts of money laundering.

Fleming was the owner of three DME companies, Hi-Tech Medical Supply & Delivery (Hi-Tech), E&R Medical Supply (E&R) and Medical Equipment and Supply Center (MESC), and a Medicare billing company, Advanced Medical Billing Specialists, Inc. (AMBS). Arthur was a co-owner of Hi-Tech and Chaney was a co-owner of MESC. Ebhamen was the owner of First Advantage Nursing, another DME company and Guillory was the owner of KJB Medical Billing. Perkins was an employee of AMBS.
According to allegations in the indictment, Fleming purchased Medicare beneficiary information, including their names and Medicare numbers, from Chaney and others for use in the scheme. Perkins and other employees of Fleming created fictitious delivery tickets to give the appearance the DME had been delivered by Hi-Tech, First Advantage, and E&R. Perkins allegedly also mislead Medicare by pretending to be the person Medicare thought was the owner of E&R Medical Supply, located in Lake Charles, Louisiana. Guillory is alleged to have filed $1 million in false claims for 111 beneficiaries in one day. Fleming and her five co-defendants' fraud scheme caused Medicare/Medicaid to pay out approximately $6.5 million in fraudulent claims.

During the Fall of 2005, the United States seized and forfeited approximately $1.8 million of the illegal Medicare/Medicaid proceeds obtained during the alleged conspiracy to defraud Medicare charged in this indictment. The indictment also seeks to forfeit approximately $6.5 million from the six defendants as proceeds of the fraudulent scheme.

Upon conviction, each of the health care fraud counts carries a maximum penalty of 10 years in a federal prison and a $250,000 fine, each wire fraud count carries a maximum penalty of 20 years imprisonment and a $250,000 fine, conspiracy carries a penalty of five years imprisonment and a $250,000 fine and the money laundering counts carry either a 10 or 20 year maximum penalty and as much as a $500,000 fine. Parole has been abolished in the federal prison system. This case will be prosecuted by Assistant United States Attorney Al Balboni.

An indictment is a formal accusation of criminal conduct, not evidence. A defendant is presumed innocent unless and until convicted through due process of law.