Two Los Angeles medical suppliers implicated in multimillion dollar wheelchair fraud

The owners of two Los Angeles-based medical supply companies were convicted of Medicare fraud in two separate jury decision handed down on Friday last week, both of which involved unnecessarily supplying beneficiaries with power wheelchairs.

In the first case, a jury convicted Sylvia Walter-Eze of multiple counts of healthcare fraud for a scheme in which she was paid $1.9 million of $3.5 million in false claims submitted to Medicare, according to the Department of Justice (DOJ). Walter-Eze, who owned Ezcor Medical Supply, paid kickbacks to patient recruiters and physicians to obtain patient referrals and fraudulent prescriptions. She used those prescriptions to bill Medicare and Medi-Cal for medically unnecessary power wheelchairs between 2007 and 2012.

On the same day, Hakop Gambaryan was convicted for a nearly identical scheme that fraudulently billed Medicare $3.3 million between 2006 and 2012. Gambaryan owned Colonial Medical Supply in Los Angeles and paid cash kickbacks to medical clinics in exchange for fraudulent prescriptions for power wheelchairs and other durable medical equipment (DME).

Prosecutors revealed evidence that Gambaryan personally delivered the wheelchairs to beneficiaries who could walk without assistance, including a woman who lived in a second-story apartment without an elevator. Gambaryan also falsified home health assessments and photocopied patient signatures to make it seem as if patients consented to ongoing rentals. In two cases, the patients had passed away prior to the date they signed the rental agreements.

The federal government has kept a close eye on DME fraud schemes over the last year, routinely busting scammers who partner with physicians to submit false claims. Power wheelchairs have been particularly problematic, since fraudsters can buy motorized chairs for approximately $900 and then bill Medicare for $6,000, FierceHealthPayer: AntiFraud previously reported. In South Florida, tighter controls on DME suppliers have led to a reduction in equipment claims.  

For more information:
- here's the statement on the $3.5 million conviction
- read the statement on the $3.3 million conviction

Suggested Articles

The HHS OIG is asking for an additional $23.7 million to support fraud oversight that has benefited from an emphasis on data analytics.

A New York surgeon was sentenced to 13 years in prison for fraud and more physician practice news from around the web.

A federal judge has ruled that the U.S. government’s remaining fraud case against UnitedHealth can move forward.