WRAL Investigates

Businessman gets prison time for Medicare fraud

Posted March 2, 2010 10:23 a.m. EST

— 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.