WRAL Investigates

Businessman gets prison time for Medicare fraud

Posted March 2, 2010

— A Raleigh man who federal investigators say was at the center of an operation that pocketed more than $12.6 million from false Medicare claims was sentenced Monday to 7½ years in prison.

Kalu Kalu, who pleaded guilty in September to conspiracy to commit health care fraud and health care fraud, also was ordered to pay $4.6 million in restitution to the Medicare program.

Kalu was among four people indicted last year who federal investigators said would recruit and train salespeople to establish relationships with Medicare patients to obtain their Medicare numbers and personal information.

Investigators said Kalu used the Medicare provider number of co-defendant Martin Ifeani Iroegbu to submit bogus claims for scooters. Kalu also used his Raleigh businesses, Enuda Healthsource and Universal Medical Supplies, to bill Medicare for health care aids that were never provided to beneficiaries, authorities said.

“The Medicare system was enacted to assist retired and elderly citizens in obtaining needed health care. Unfortunately, this defendant targeted this system as an easy mark, bilking the American taxpayer out of millions of dollars," U.S. Attorney George Holding said in a statement.

As part of a plea agreement, 15 counts of health care fraud were dismissed against Kalu.

Iroegbu is serving a 26-month federal prison sentence after pleading guilty to health care fraud and aiding and abetting in the case.

Charges were dismissed against Kalu's wife, Kecia Kalu, and Nnenna K. Cornett, who operates States Medical Products LLC in Raleigh.

The U.S. Department of Health and Human Services Office of the Inspector General reported last May that more than 10 percent of the $920 million Medicare paid in 2005 for powered wheelchairs had been misspent.

To report Medicare fraud, call the state Department of Insurance weekdays at 800-443-9354.


This story is closed for comments.

Oldest First
View all
  • dogman1973 Mar 3, 2010

    Don't steal from the guvment, they don't like the competition!

  • BraveHeart Mar 2, 2010

    what a shame...

  • gman007 Mar 2, 2010

    jesmyopinion, you might want to read that article. It was supposed to be life under the three strikes law but they didn't do it, again. The man, a career criminal, has spent 22 of 27 years behind bars.

  • kiediss Mar 2, 2010

    would love to know where the $ has gone and why the co-conspirators who probably did the most bilking of dollars got off. Wonder if that money was wired out of this country and now lost...that would be a better story. WRAL... start investigating that. Do they keep a million dollar home now? Do they get off?

  • Just the facts mam Mar 2, 2010

    "A County judge on Monday sentenced a man who walked out of a store with a package of cheese in his trousers to seven years and eight months in prison."


    It is sad when someone who steals millions of taxpayers dollars is sentenced less time than someone who steals a package of cheese.

  • Just the facts mam Mar 2, 2010

    There is a tremendous amount of fraud in Medicare - I heard on NPR about 2 weeks ago that the conservative figure is about 1 in every 7 dollars spent on Medicare is fraudulent. And we want the federal government running all of our health care???

  • CSA.lifer. Mar 2, 2010

    "IT"s for the CHILDREN"

  • donnaferguson Mar 2, 2010

    Why does everything on here have to become political. What ignorant comments. Funny how to Dems, Reps are always criminals and visa versa. Topic...........for petes sake.

  • djbyrdnc Mar 2, 2010

    How much are thesee wheelchairs? I heard they are $5000. Does alot of people need these? I want people to be mobile, but do tax payers have to pay $5000 per chair and to see people ride them on street and roads? There has been some people killed on the streets, should not they be out lawed like everything else? Oh by the way the crook stole 12.6 million dollars and only had to pay 4.6 million back and got 7.5 years in prison. That is 1 million per year, more then Taylor will get for his 17 years in jail. Medicare ir medicaid fraud and you want the government to take over health care. He stole how much money before he was caught. I wonder how much his companies actually billed the government for total? Probably more then 12.6 million. Your tax dollars at work.

  • commonsensical Mar 2, 2010

    So, how much of the money was recovered? Or will he get out of prison and still get to keep his huge taxpayer funded bankroll like Kilpatrick did?