Four more charged in $110 million hospice fraud scheme

Editor's Note:
This matter occurred on date indicated, but not published at that time due to government shutdown. Press release posted and made available following the return to normal operations.

HOUSTON - Seven Houston residents are now charged in a superseding indictment for their roles in a Medicare fraud scheme involving patients not terminally ill, announced U.S. Attorney Nicholas J. Ganjei.

Authorities have arrested Hattie Banks, 49, Humble; Lydia Obere, 59, and Cheryl Brooks, 64, both of Houston; and Ena Cowart, 50, Missouri City. They join Dera Ogudo, 40, Victoria Martinez, 36, both of Richmond, and Evelyn Shaw, 52, Houston, who were previously taken into custody.

According to the 43-count superseding indictment, returned Oct. 5, all seven conspired to fraudulently bill Medicare and Medicaid for more than $110 million for hospice services provided to patients who were not terminally ill.

The charges allege Ogudo and Martinez operated United Palliative & Hospice Company, a business that misled elderly patients and their families about services billed to Medicare and Medicaid.

Court documents allege UPHC marketers told Medicare and Medicaid beneficiaries and their families they qualified for hospice care even though many patients were not terminally ill, as required. Ogudo allegedly paid kickbacks to group homeowners and others who helped enroll patients and to Shaw, a hospital discharge coordinator, for referrals. Ogudo also bribed a physician to falsely certify and re-certify patients as terminally ill, according to the charges.

The indictment further alleges that after authorities searched UPHC, Ogudo and Martinez opened new hospice companies - Residential Hospice and Cedar Hospice - under straw ownership to continue the fraud. They then allegedly conspired to launder Medicare reimbursements from those companies through accounts Martinez and others controlled before transferring the funds into other accounts to conceal Ogudo's ownership and control.

All are charged with conspiracy to commit health care fraud, multiple counts of health care fraud, conspiracy to pay and receive kickbacks and substantive violations of the Anti-Kickback Statute. Ogudo is additionally charged with 14 counts of engaging in monetary transactions involving criminally derived property. Any of these counts could result in up to 10 years in prison. Ogudo and Martinez also face one count of conspiracy to commit money laundering which carries a penalty of up to 20 years. Each conviction also carries a possible $250,000 maximum fine.

The FBI, Department of Health and Human Services-Office of Inspector General and Texas Attorney General's Medicaid Fraud Control Unit conducted the investigation. Assistant U.S. Attorneys Kathryn Olson and Brad Gray are prosecuting the case.

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