Ken Paxton

Friday, November 5, 2010

Investigation by Texas Attorney General And Federal Officials Leads To Medicare And Medicaid Fraud Charges

The United States Attorney for the Southern District of Texas issued the following news release on Nov. 4, 2010:


(HOUSTON) A 47-count sealed indictment returned by a Houston grand jury in October 2010 has been unsealed following the arrest of five of six defendants charged with allegedly defrauding Medicare and Medicaid by filing false claims for orthotic equipment and devices, United States Attorney Jos Angel Moreno and Texas Attorney General Greg Abbott announced today.

This morning, James Claude Reese, 55, Lia St. Junius, 25, Brenda Lopez, 34, Lily Johnson, 36, and Devon Spicer, 46, all of Houston, were arrested by investigating agents with warrants that issued following the return of the indictment on Oct. 23, 2010. A warrant for the arrest of Martha Ramos, 57, also of Houston, remains outstanding. The five defendants arrested today appeared before U.S. Magistrate Stephen Wm. Smith this afternoon. Four of the defendants have been ordered released on bond while Brenda Lopez, who is allegedly illegally in the United States, has been ordered temporarily detained pending a detention hearing set for Tuesday, Nov. 9, 2010.

Medicare and Medicaid are health care benefit programs funded by the federal government which pay for health care services provided to the elderly, the blind and disabled. The 47-count indictment charges the defendants with the commission of various federal crimes including conspiracy to commit health care fraud, health care fraud, paying or receiving kickbacks, money laundering and tax evasion.

According to the indictment, Reese was the owner of a durable medical equipment company named The Mobility Store which submitted claims to Medicare and Medicaid for providing orthotic equipment and devices which were allegedly not medically necessary and in many instances not provided at all. St. Junius, Lopez and Johnson were involved in the operation of The Mobility Store and allegedly assisted in the submission of fraudulent claims to Medicare and Medicaid. Spicer and Ramos allegedly received kickbacks from Reese and others for referring Medicare beneficiaries and Medicaid recipients to The Mobility Store to receive the orthotic equipment.

The indictment alleges Medicare and Medicaid were falsely billed more than $10 million by Reese and co-defendants and paid out more than $5 million during the period of February 2005 through January 2010. Reece is charged with allegedly evading taxes on approximately $2.3 million in proceeds obtained through alleged false claims.

If convicted of offenses charged against them, Reese faces a maximum of 20 years in prison and a fine of up to $500,000; St. Junius, Lopez and Johnson each face a maximum of 10 years in prison and a fine of up to $250,000, while Spicer and Ramos face up to five years imprisonment and a $250,000 fine.

This case was investigated by the FBI, the Department of Health and Human Services - Office of Inspector General, the Medicaid Fraud Control Unit of the Office of the Texas Attorney General and Internal Revenue Service - Criminal Investigations. Assistant United States Attorney Samuel Louis is prosecuting the case.

An indictment is a formal accusation of criminal conduct, not evidence.

Innocent unless and until convicted through due process of law.