Los Angeles-area Church Pastor Pleads Guilty to Money Laundering and Conspiring with Doctors, Others to Defraud Medicare of More Than $11 Million

WASHINGTON — A Los Angeles-area church pastor pleaded guilty today to conspiring with doctors, the operators of fraudulent medical clinics, street-level patient recruiters and others to defraud Medicare of more than $11 million, announced Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division; U.S. Attorney André Birotte Jr. of the Central District of California; Glenn R. Ferry, Special Agent in Charge for the Los Angeles Region of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG); Bill L. Lewis, Assistant Director in Charge of the FBI’s Los Angeles Field Office; and Joseph Fendrick, Special Agent in Charge of the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse.

Charles Agbu, 58, of Carson, Calif., pleaded guilty before U.S. District Judge George Wu in the Central District of California to one count of conspiracy to commit health care fraud and one count of money laundering.
       
In court documents, Agbu, a church pastor, admitted that he owned and operated Bonfee Inc., a fraudulent durable medical equipment (DME) supply company located in Carson.  Agbu admitted that he paid patient recruiters or “marketers” to approach Medicare beneficiaries and convince them to provide their Medicare information in exchange for free DME that the beneficiaries did not need.  Often, the marketers told the beneficiaries that they would receive highly-specialized power wheelchairs (PWCs) because PWCs were among the most expensive items that Agbu and his co-conspirators could bill to Medicare and generated the most profit.
Agbu also admitted that he knew Medicare required him and his co-conspirators to maintain prescriptions and supporting medical documentation in their files for every PWC and item of DME that they billed to Medicare.  To meet these Medicare requirements, Agbu admitted that he paid the operators of fraudulent medical clinics to provide him with prescriptions and supporting medical documentation for the PWCs and DME that he and his co-conspirators billed to Medicare.  Agbu admitted that he knew these clinics used marketers to solicit Medicare beneficiaries, and that the prescriptions and medical documents that the clinics produced were fraudulent.  Agbu admitted that on average, he paid between $400 and $700 for each prescription he bought from these clinics.
      
In addition to paying the operators of fraudulent medical clinics for prescriptions, Agbu admitted that he paid doctors to write and provide him and his co-conspirators with prescriptions and medical documents needed to submit PWC and DME claims to Medicare.  Agbu admitted that he directed marketers to bring Medicare beneficiaries to the doctors or knew the doctors used marketers to solicit beneficiaries.  Agbu admitted that he paid the doctors or members of their staff approximately $100 to $400 for every prescription that the doctors wrote for and provided to him.  One of these doctors, Agbu’s co-defendant Dr. Juan Tomas Van Putten, pleaded guilty in November 2012 to conspiring to defraud Medicare and admitted that he accepted payment in exchange for writing medically-unnecessary PWC and DME prescriptions.
      
Agbu admitted that he and his co-conspirators submitted false claims to Medicare for PWCs and other DME by using the Medicare information obtained by marketers and the prescriptions and medical documentation that he purchased from doctors and operators of fraudulent medical clinics.  Agbu and his co-conspirators submitted these claims through Bonfee and Ibon, Inc., a fraudulent DME supply company that was located in the same building as Bonfee and owned by one of Agbu’s alleged co-conspirators.  Agbu admitted that with one exception, he and his co-conspirators supported every PWC claim that they submitted to Medicare with fraudulent or purchased prescriptions.  Agbu admitted to knowing that the DME claims submitted to Medicare were often for PWCs that were not medically necessary or never provided to beneficiaries.
According to court documents, Agbu and his co-conspirators submitted approximately $11,094,918 in false claims to Medicare and received approximately $5,788,725 on those claims.  Agbu admitted that he engaged in money laundering when he transferred over $10,000 of these illegally-obtained Medicare funds between his various bank accounts.
 At sentencing, scheduled for May 16, 2013, Agbu faces a maximum penalty of 20 years in prison and a $500,000 fine.  Dr. Van Putten’s sentencing is scheduled for March 28, 2012.  He faces a maximum penalty of 10 years in prison and a $250,000 fine.

Co-defendants Dr. Emmanuel Ayodele, Alejandro Maciel, Candalaria Estrada and Charles Agbu’s daughter Obiageli Agbu are scheduled for trial on Feb. 26, 2013, for their alleged roles in the conspiracy.  They are presumed innocent until proven guilty at trial.
      
The case is being prosecuted by Trial Attorney Jonathan T. Baum of the Criminal Division’s Fraud Section.  The case is being investigated by the FBI, HHS-OIG, the California Department of Justice and Internal Revenue Service-Criminal Investigation.

The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.  The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,480 defendants who have collectively billed the Medicare program for more than $4.8 billion.  In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.