Local News

Businessman pleads guilty to Medicare fraud

Posted September 8, 2009 10:44 a.m. EDT
Updated September 8, 2009 7:05 p.m. EDT

— A Raleigh man who federal investigators say was at the center of an operation that pocketed more than $12 million from false Medicare claims pleaded guilty Tuesday to fraud.

Kalu Kalu pleaded guilty to one count each of conspiracy to commit health care fraud and health care fraud. He will be sentenced Dec. 14, when he faces up to 15 years in prison.

Kalu, his wife, Kecia Kalu, and two others indicted in the case would recruit and train salespeople to establish relationships with Medicare patients to obtain their Medicare numbers and personal information, according to federal investigators.

Investigators allege that the couple used the Medicare provider number of co-defendant Martin Ifeani Iroegbu to submit bogus claims for scooters. The Kalus also are alleged to have used their Raleigh businesses, Enuda Healthsource and Universal Medical Supplies, to bill Medicare for health care aids that were never provided to beneficiaries.

As part of a plea agreement, 15 counts of health care fraud will be dismissed against Kalu Kalu when he is sentenced, defense attorney Paul Sun said.

"Consistent with this plea agreement Mr. Kalu is cooperating fully (with authorities)," Sun said.

Iroegbu has already pleaded guilty to health care fraud and aiding and abetting. He is expected to begin serving a 26-month prison sentence in November.

Kecia Kalu is scheduled for arraignment on Sept. 28.

The fourth defendant in the case is Nnenna K. Cornett, who operates States Medical Products LLC in Raleigh. She faces 16 counts of health care fraud and one count of conspiracy to commit fraud, but it's unclear whether she has been arrested.

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

"This goes on all over the country. It's taking money from the taxpayers," Sun said.

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