DME Owner Convicted of Health Care Fraud and Aggravated Identity Theft

February 25, 2010 - HOUSTON—The owner and operator of Logic World Medical has been convicted of conspiracy, health care fraud, and aggravated identity theft arising from an adult diaper fraud scheme, United States Attorney José Angel Moreno and Texas Attorney General Greg Abbott announced today.

Benjamin Essien, 34, of Houston, has pleaded guilty to conspiracy to commit health care fraud, five counts of health care fraud, and two counts of aggravated identity theft at a hearing before United States District Judge Gray Miller this afternoon. He faces a maximum of 10 years' imprisonment and a $250,000 fine for the conspiracy conviction and each of the five counts of health care fraud. Essien also faces two mandatory two-year terms of imprisonment for each count of aggravated identity theft which must be served consecutive to any other prison terms imposed.

Essien, who owned and operated Logic World Medical—a Houston durable medical equipment (DME) company—used the names, addresses, and account numbers of Medicaid beneficiaries he had unlawfully obtained from others to routinely file false claims for payment for adult urinary incontinence supplies he did not deliver to the Medicaid beneficiaries. In other instances, Essien billed for delivering supplies in amounts significantly less than the amounts billed to Medicaid. Additionally, Essien routinely billed Medicaid for adult urinary incontinence supplies provided to Medicaid beneficiaries who either did not need the supplies or whose physicians had not prescribed them. Adult incontinence supplies includes adult diapers, underpads, wipes, and pull-up briefs.

Even after his delivery staff and/or delivery contractors were told by the beneficiaries they did not need or want the incontinence supplies, Essien continued to bill Medicaid for the maximum allowed amount of incontinence supplies each month per beneficiary and for extra large size diaper briefs, which have the highest Medicaid reimbursement rate, without consideration to the actual size needed by the beneficiary. He even billed Medicaid for delivering a quantity of adult diapers far in excess of the amount he purchased from wholesale suppliers.

The scheme to defraud began in April 2004, with the last false claim having been filed in August 2006. Essien billed Medicaid for claims totaling approximately $1,782,861.88 and received payments for those claims totaling approximately $1,101,865.37.

Essien remains free on bond pending his sentencing hearing scheduled for May 14, 2010.

The investigation leading to the charges filed against Essien in April 2009 were the result of an investigation conducted by the FBI and the Texas Attorney General’s Medicaid Fraud Unit in Houston. Special Assistant United States Attorney Justo A. Mendez prosecuted the case.