A former CPA who now owns a medical supply company has been charged in a $7.6 million health care fraud scheme, along with three other defendants.
Eli Gichon, owner of Airport Medical Supply, operated the business from within the premises of a dry cleaning business he also owned in Van Nuys, Calif. He was arraigned on charges contained in a 61-count indictment alleging health care fraud, false statements affecting health care programs, obstruction of a criminal investigation of health care offenses, and subscribing to false tax returns.
According to the indictment, Gichon employed co-defendants Christopher Hill, Leroy White and Feliciano Dy to work as marketers for AMS. Hill, White and Dy were each indicted on multiple counts of health care fraud.
From January 2003 through December 2006, Gichon allegedly obtained beneficiary information needed to bill Medicare for durable medical equipment by paying kickbacks to Hill, White, Dy and others to recruit beneficiaries for AMS, according to prosecutors.
To recruit the Medicare beneficiaries for AMS, the marketers would promise the beneficiaries cash and free medical equipment such as electric wheelchairs and hospital beds. In addition, they would transport the recruited beneficiaries to AMS.
When the beneficiaries visited AMS, Gichon and others at the business would have them pre-sign blank paperwork for medical equipment, including a delivery ticket/patient receipt indicating that the equipment had been delivered to the beneficiarys residence.
Gichon used the recruited beneficiaries information to prepare false claims for durable medical equipment, such as power wheelchairs and accessories, hospital beds, and mattresses that were not provided to the beneficiaries or were not medically necessary. He and others created false invoices from a non-existent medical supply company to substantiate that AMS had purchased the non-existent durable medical equipment.
Between April 2004 and January 2007, AMS submitted false claims to Medicare for durable medical equipment totaling approximately $7.6 million, according to prosecutors. In addition to the health care fraud scheme, Gichon was indicted on three counts of subscribing to false tax returns. For the tax years 2004, 2005 and 2006, Gichon failed to report approximately $3.8 million in receipts from Medicare he received through AMS on his personal income tax returns. He faces up to 23 years in prison.
Gichon is currently free on bond pending trial. Hill was also arraigned Tuesday in Los Angeles and pleaded not guilty to the charges in the indictment. He was ordered detained. Dy has been summonsed to appear and will make his initial appearance on March 22, 2010. White is expected to surrender later this week.
A trial is scheduled for April 13, 2010.
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