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Post date: July 20 2015

A.G. Schneiderman Announces Prison Term Of Up To 21 Years For NYC Medical Supply Company Operator In Medicaid Fraud Scheme

Humphrey Udeh, Owner Of Brooklyn-Based Advanced Medical Supply, Convicted Of Illegally Billing Medicaid For Expensive Pediatric Nutritional Formula; Judge Orders Udeh Pay $1.7 Million Fine

NEW YORK – Attorney General Eric T. Schneiderman today announced the conviction and sentencing of Humphrey Udeh, 43 of Baldwin, NY, for defrauding Medicaid of over $1 million. Udeh billed the state for over three thousand units of a highly-specialized and expensive liquid pediatric nutritional formula, when he actually dispensed over-the-counter nutritional supplement formulas. New York State Supreme Court Acting Justice John G. Ingram presided over Udeh’s jury trial in Supreme Court, Kings County, and today sentenced Udeh, who was convicted of grand larceny and other healthcare fraud-related charges, to serve 7 to 21 years in state prison and pay a $1.7 million fine.

“This defendant had a formula for fraud, filing inflated claims for nutrition designed to help needy children with rare illnesses,” Attorney General Schneiderman said. “The scam drained over a million dollars of taxpayer money, ultimately hurting our most vulnerable and neediest citizens.  This sentencing makes it clear: Those who defraud Medicaid will face justice.”

The Attorney General’s investigation found that, between January 2010 and September 2012, Advanced Medical Supply, which is owned by Udeh and located in Crown Heights, fraudulently received funds from Medicaid and HealthFirst, a Medicaid Managed Care Organization, for dispensing a high-priced liquid pediatric formula to Medicaid recipients who cannot chew or swallow food, and must obtain nutrients via a feeding tube. In reality, Udeh dispensed an over-the-counter formula, Pediasure, which is much cheaper than the specialized formula he falsely claimed to be providing.

The investigation revealed that, in order to perpetuate the scam, Udeh utilized generic prescriptions of pediatric formula and false letters of medical necessity, obtained by employees of Advanced Medical Supply from unsuspecting physician and medical facilities. He used the generic prescriptions and false letters to support his fraudulent claims.

Co-Defendant Keva Johnson also pled guilty to crimes relating to the false billing scheme.

In addition to the $1.7 million fine imposed by the court, an asset forfeiture and civil lawsuit brought by the Civil Enforcement Division of the Medicaid Fraud Control Unit is pending against Humphrey Udeh and other defendants.

Charges are pending against other defendants. They are presumed innocent unless and until proven guilty.

The Attorney General would like to thank the New York State Department of Health and the New York State Office of the Medicaid Inspector General for assistance during the investigation. The Attorney General would also like to acknowledge the cooperation and assistance provided by HealthFirst, a New York State Medicaid Managed Care contractor.

This case was tried before the jury by New York City Region Deputy Regional Director Twan V. Bounds and Special Assistant Attorney General Mark Cannon of the Medicaid Fraud Control Unit, with the assistance of Regional Director Christopher M. Shaw.  The investigation was conducted by Special Investigator Dominick DiGennaro and Senior Special Investigator David Ryan with the assistance of Supervising Investigator Victor Maldonado and Deputy Chief Investigator Kenneth Morgan.  Associate Special Auditor Investigator Patricia Iemma conducted the financial analysis with the assistance of of Regional Chief Auditor Thomasina Smith.  Thomas O’Hanlon is the Chief of Criminal Investigations-Downstate, Amy Held is the Acting Director of the Medicaid Fraud Control Unit, and Kelly Donovan is the Executive Deputy Attorney General for Criminal Justice.