Opinion ID: 1085312
Heading Depth: 3
Heading Rank: 5

Heading: Investigation of Mr. Ohaka’s DME companies

Text: Mr. Ward, the Health Integrity investigator, testified that Medicare had received complaints from Medicare beneficiaries that (1) Mr. Ohaka’s companies had not -9- delivered promised products at all, (2) products delivered were not those ordered, or (3) equipment was received that they never ordered. Because of these complaints and because of Mr. Ohaka’s association with businesses that had submitted erroneous claims, Medicare began investigating all businesses in which Mr. Ohaka had an ownership or managing interest. Mr. Ward further testified that Mr. Ohaka’s use of Ms. Etinfoh as Luant’s straw owner was a common Medicare fraud practice. Under this practice, the fraudulent actors “identify other individuals that they can enter into a business arrangement with and get them to . . . apply for the [Medicare billing] number or put their name down as the registered agent for operating the business when . . . [the fraudulent actors are] the ones actually operating the business behind the scenes.” Trial Tr. at 51-52. 4. History of First Century a. Starting the business In 2007, Mr. Rufai introduced Mr. Adegboye to Mr. Ohaka in New York. The three discussed starting a DME company in Oklahoma. Although both Mr. Rufai and Mr. Adegboye planned to fly to Oklahoma City from September 12 to September 17, 2007, to begin setting up the business, Mr. Adegboye was too busy at the last minute and Mr. Rufai went alone. Mr. Ohaka picked up Mr. Rufai from the airport and showed him around Vitacare before taking him to the office of the Oklahoma Secretary of State to file papers setting up First Century. Mr. Rufai paid the incorporation fee, listed himself as the registered -10- agent of First Century Medical Supply, and signed as the incorporator. He also listed himself and Mr. Adegboye as First Century’s directors. First Century was incorporated on September 12, 2007. Mr. Ohaka’s name did not appear on the incorporation papers. Mr. Rufai stayed at Mr. Ohaka’s apartment in Oklahoma City and spent the rest of his time there filling out insurance paperwork for First Century, visiting Mr. Ohaka’s businesses, and looking for places to purchase goods to take to Trinidad and Nigeria. On September 17, Mr. Rufai flew from Oklahoma City to Houston, where he stayed at Mr. Ohaka’s home for four days. b. Opening bank accounts, signing service agreements, and leasing space On October 17, 2007, Mr. Rufai and Mr. Adegboye traveled to Oklahoma City. On October 18, they opened a Bank of America account for First Century. They listed themselves as the authorized signers on the account, with Mr. Adegboye listed as president of First Century and Mr. Rufai as vice-president. After opening the account, Mr. Adegboye emailed the account information to Mr. Ohaka and copied the email to Mr. Rufai. Mr. Adegboye signed a service agreement, dated October 17, 2007, between Vitacare and First Century, for Vitacare to repair First Century’s customers’ equipment. On the same day, Mr. Adegboye signed, as owner of First Century, an agreement that First Century would purchase equipment from Vitacare. Also that day, Mr. Rufai signed a general liability insurance agreement, which Medicare requires for all DME companies. Between November 20 and November 22, 2007, Mr. Rufai returned to Oklahoma -11- without Mr. Adegboye to conduct additional First Century business. Mr. Rufai and Mr. Adegboye had already begun arranging for First Century’s store space, and the leasing company gave Mr. Rufai a key to inspect the premises and see what repairs needed to be made. Mr. Rufai picked up bills at the post office in Oklahoma City and gave them to Mr. Adegboye when he returned to New York. He then spent the Thanksgiving holiday in Houston with Mr. Ohaka. The lease for First Century’s space was dated December 14, 2007, but Mr. Adegboye signed and notarized it on November 15, 2007. Mr. Rufai signed as the witness to Mr. Adegboye’s signatures. The lease listed Mr. Adegboye as First Century’s contact person. It also listed Mr. Adegboye and Med-Links Holdings Inc. (a company Mr. Ohaka and Mr. Rufai were using to buy a supermarket) as guarantors for the rent. For the guaranty by Med-Links Holdings, Mr. Rufai signed as its director of sales, and Mr. Adegboye signed as the witness. For the personal guaranty signed by Mr. Adegboye, Mr. Rufai signed as witness. c. Applying to Medicare Ms. Pratcher was sent from Vitacare to First Century in January 2008 to open the storefront and get the store running to prepare for the inspection necessary for Medicare billing approval. On January 8, 2008, Mr. Adegboye signed and submitted the Medicare enrollment application, which the NSC received on January 14, 2008. Section 6 of the application required First Century to list all individuals with a five percent or greater ownership, all -12- managing employees, anyone with a partnership interest, and authorized and delegated officials. The completed application mentioned only Mr. Adegboye. He was listed as a five percent or greater owner and managing employee. Section 14 of the application lists the possible consequences for providing false information, which include liability for executing a scheme to defraud a health care benefit program under 18 U.S.C. § 1347. Finally, in Section 15, Mr. Adegboye certified as the authorized official for First Century that all the information in the application was correct. He also certified that (1) he would notify the NSC of any changes to the information in the application within 30 days of the change; (2) no “owner, partner, officer, director, managing employee, authorized official, or delegated official . . . is currently sanctioned, suspended, debarred, or excluded . . . from supplying services to Medicare”;2 and (3) he would “not knowingly present or cause to be presented a false or fraudulent claim for payment by Medicare, and [would] not submit claims with deliberate ignorance or reckless disregard of their truth or falsity.” Suppl. Appx. at 61. Sometime in January 2008, the NSC conducted a site inspection and found 2 Section 3 of the Application also required that First Century indicate whether it or any of its owners had (1) in the previous ten years been suspended from participation in any federal health care program, (2) a current Medicare payment suspension under any billing number, or (3) a Medicare revocation of any Medicare billing number. By the time Mr. Adegboye filed the application, Optimed had been placed on prepayment review and had its privileges revoked. One possible motive for omitting Mr. Ohaka from the application, then, was to avoid the scrutiny that would result from Mr. Ohaka’s involvement in Optimed, but there was no evidence presented that Mr. Adegboye knew about Optimed’s status at that time. -13- paperwork and credit issues at First Century. On February 1, 2008, First Century received a letter from the NSC that identified these issues and stated that First Century could not be approved for Medicare billing because its application was incomplete. Ms. Pratcher was unable to contact Mr. Rufai about the credit issues raised in the NSC letter because he was out of the country, so she called Mr. Ohaka. He told her to go to Vitacare and get a letter stating that it was lending credit to First Century. On February 19, 2008, Mr. Adegboye sent the additional documents to the NSC that it had requested, including an electronic funds transfer agreement for Medicare to deposit funds directly in First Century’s accounts. He again signed the paperwork as the manager and authorized official for First Century. On March 28 or 29, 2008, Ms. Pratcher resigned from First Century to move to Georgia to care for her ailing grandfather. She told Mr. Rufai, however, that she had quit because of how poorly Mr. Ohaka treated her and because things at First Century did not seem “right to [her].” Trial Tr. at 344. In particular, she was concerned about calls to First Century from Vitacare customers complaining that they had not received their equipment and about the credit letter from Vitacare to First Century, which “seemed illegal to [her].” Id. at 345. On March 31, 2008, the NSC performed another site inspection of First Century. Sasha Rinker, who managed Mr. Ohaka’s other stores and was there that day, told the inspector that she was the manager and that the owner had other DME companies. When the inspector asked for a list of the other locations, she called Mr. Ohaka, who told her to -14- say that First Century had no other locations. After receiving the inspection report, the Medicare NSC contractor who was processing the application requested that First Century update the application to include Ms. Rinker as the managing employee and, because there was so little inventory on site, that it provide evidence of inventory contract agreements. On April 7, 2008, Mr. Adegboye updated the Medicare application by removing his status as managing employee. On April 17, 2008, he added Ms. Rinker—Vitacare’s manager—as managing employee and provided additional forms. On May 20, 2008, First Century received its approval letter from Medicare, allowing it to begin submitting claims. First Century’s original bank account was eventually closed for lack of activity. On May 30, 2008, Mr. Rufai and Mr. Adegboye opened three new accounts for First Century at Bank of America. Mr. Adegboye was again listed as president of First Century and Mr. Rufai as vice-president. They also requested debit cards to draw on the accounts. d. Billing Medicare From approximately May 2008 through September 2008, First Century submitted claims on behalf of beneficiaries to Medicare for approximately $1.2 million, for which it -15- received approximately $303,000.3 Mr. Ohaka used the same process to bill Medicare at all of his DME companies. He would choose an employee at one of the companies and send her a packet of information about a Medicare beneficiary. He would instruct the employee on the billing codes to enter, such as the CR modifier, and as to which company—Vitacare, Providence, or First Century—would submit the CMN. The employee would then send the CMN to Mr. Ohaka or directly to Reliance Billing, the company Mr. Ohaka used to submit CMNs to Medicare. e. Inspection and Medicare investigation Mr. Rufai and Mr. Adegboye were rarely on site—Mr. Adegboye spent most of his time in New York, and Mr. Rufai spent most of his time in New York or abroad—but they were reachable by phone and email. Sometime during September 2008, Mr. Adegboye visited First Century in Oklahoma and paid some bills. Also in September, Ms. Unsell began working at First Century. On September 22, 2008, the NSC conducted another inspection of First Century. For the NSC, it is a sign of fraud when a supplier submits many claims when it has little 3 All of the beneficiaries for whom First Century billed Medicare lived in Louisiana or Texas, areas potentially affected by hurricanes and thus where use of the CR modifier would be less suspicious. The five counts of health care fraud for which Mr. Rufai and Mr. Adegboye were convicted related to claims filed on behalf of five of these beneficiaries. For each of them, Medicare was billed for a power wheelchair using the CR modifier for storm-related losses. Testimony at trial established that at least three of the beneficiaries did not live in areas affected by Hurricanes Katrina or Rita. At least four of them received cheaper power scooters rather than the power wheelchairs for which Medicare was billed. At least four of them had never received a physician’s prescription for the equipment. -16- inventory. The First Century store had little inventory, and Ms. Unsell, who was managing the store at the time, could not tell the inspector if there were any contracts with another company to provide supplies. She also was unable to tell the inspector the owner’s name or how First Century obtained beneficiary referrals. The inspector reported a lack of files, apart from 10 files lying unsecured on top of a desk. On October 15, 2008, Gina Bertram, the NSC contractor employee who reviewed the inspection report, sent a deficiency letter to First Century listing the company’s violations of Medicare requirements and giving First Century three weeks to show compliance. Health Integrity, the Medicare contractor investigating Medicare fraud in Oklahoma, also opened an investigation of First Century based on Medicare’s practice of monitoring new DME providers. Because First Century was a new provider that had immediately started to bill Medicare for orthotics and power mobility devices, Health Integrity put it on prepayment review around October 2008. This meant that every time First Century submitted a claim, it received a letter asking it to provide supporting documentation before Medicare would pay the claim. First Century did not provide the required documents. On November 7, 2008, Ms. Unsell responded to the deficiency letter from NSC’s Mr. Bertram with a number of documents, including a form from Mr. Adegboye designating her as a delegated official for First Century. Ms. Bertram concluded that First Century had not provided all the information the NSC had required and, on January -17- 21, 2009, sent First Century a letter stating that the NSC had revoked First Century’s Medicare supplier number. f. First Century’s closure and post-closure investigations On January 4, 2009, Mr. Ohaka emailed his employees that all of the DME companies, including First Century, would be closing because of the economy. On August 18, 2009, attorneys for Mr. Adegboye sent a letter to the FBI requesting the return of First Century records that had been taken when FBI agents seized Luant’s company records. Sometime before, Medicare had asked First Century to produce records for post-payment review of numerous claims. The letter from Mr. Adegboye’s attorneys to the FBI stated that Medicare had requested the records to verify services that had been billed. The letter reported that the records had been “given to Mr. Ohaka for safe keeping when Mr. Adegboye was in the process of relocating to New York since Mr. Ohaka said he was coming to New York at a later date.” Government Trial Ex. # 5A, Aplee. Suppl. Appx. at 246; Trial Tr. at 63. The letter further stated that Mr. Ohaka had been unable to travel to New York to deliver the records because he had been indicted. On October 5, 2009, Medicare investigators received a notarized affidavit from Mr. Adegboye explaining why he was unable to produce the requested documents. He stated that he owned First Century and that he had earlier decided to move the “company back to New York.” Government Trial Ex. # 5B, Aplee. Suppl. Appx. at 248. He explained that he had “contacted a long time friend, who also runs a similar business in -18- Oklahoma by the name [of] Dr. Joshua Ohaka and requested him to help me box the files and other office equipments and ship them to me in New York. . . . [Mr.] Ohaka resides in Houston, Texas, so he moved the documents to Texas for onward mailing to New York.” Id. He further explained that he had learned that the FBI seized the files when Mr. Ohaka was indicted and that he had been unable to get the files back from the FBI.