Ken Paxton

Wednesday, May 23, 2007

Three Starr County Medical Suppliers Sentenced Following Medicaid Fraud Investigations

RIO GRANDE CITY Three Starr County medical suppliers pleaded guilty to stealing more than $200,000 from the state’s Medicaid system. Texas Attorney General Greg Abbott’s Medicaid Fraud Control Unit (MFCU) investigated the two separate cases, which were prosecuted in cooperation with the Starr County District Attorney’s Office.

Linda Michelle Lopez, manager of Starr Medical Equipment in Rio Grande City, and Priscilla Gonzalez, 37, a company driver, each pleaded guilty Monday to one count of Medicaid fraud. The defendants fraudulently billed Medicaid for adult diapers that were never provided to Medicaid patients. The 381st Judicial District Court sentenced Lopez and Gonzalez each to three years deferred adjudication and ordered them to pay $105,000 in restitution to the Medicaid system. Each of the defendants was also ordered to pay a $1,000 fine and to perform 240 hours of community service.

In a separate case, Sergio Perez, 38, co-owner of La Paloma Medical Supply in Roma, Texas, pleaded guilty to one count of Medicaid fraud. Perez and an accomplice operated a scheme that illegally charged Medicaid more than $100,000 for incontinence supplies that were not provided to clients. The court sentenced Perez to three years deferred adjudication and 10 days in a state jail. Perez must also pay $8,000 in restitution, pay a $1,000 fine and perform 120 hours of community service.

Texans will not tolerate criminals who defraud the taxpayers, Attorney General Abbott said. The Medicaid program is designed to provide assistance to Texans who cannot afford health care. When criminals make fraudulent Medicaid claims, they are stealing from taxpayers and breaking the law. Thanks to an outstanding joint effort by our Medicaid Fraud Control Unit and Starr County District Attorney Heriberto Silva, scams that harmed Medicaid recipients and defrauded the taxpayers have been shut down.

According to evidence gathered by MFCU investigators, Lopez and Gonzalez used Starr Medical Equipment from 2004 to 2007 to bill Medicaid more than $100,000 for undelivered supplies. The defendants surrendered to MFCU investigators in November 2006 following their felony indictments the previous month. On Monday, the defendants paid the full, court-ordered restitution to Medicaid.

In October 2006, a Starr County grand jury indicted Perez and co-owner Juan Avila, 30, after MFCU prosecutors presented evidence that the two men used La Paloma Medical Supply from 2004 to 2006 to bill Medicaid more than $100,000 for undelivered incontinence supplies. The case against Avila is pending.

In 2005 alone, the costs of the Medicaid program in Texas totaled more than $17 billion. As the state’s chief law enforcement official, Attorney General Abbott has dramatically expanded the MFCU to save taxpayer dollars and increase protection for Texas seniors. The Unit has established field offices in Corpus Christi, Dallas, El Paso, Houston, Lubbock, McAllen, San Antonio and Tyler through authorization and funding from the 78th Legislature. Attorney General Abbott’s MFCU works with federal, state and local agencies to identify and prosecute those who defraud Medicaid.

The MFCU was honored in 2004 by the U.S. Department of Health and Human Services with the Inspector General’s State Fraud Award for effectiveness and efficiency during federal fiscal year 2003 in combating fraud, patient abuse and neglect in the Medicaid program.

To obtain more information about the Attorney General’s efforts to fight Medicaid fraud, access the agency’s Web site at