HOUSTON – Two defendants in a nearly $3 million fraudulent vestibular diagnostic testing scheme have been ordered to federal prison, announced U.S. Attorney Kenneth Magidson. Dr. Augustine Egbunike, 61, pleaded guilty Jan. 16, 2015, while Loretta Mbadugha, 58, also of Houston, entered a plea for her role in the scheme Dec. 12, 2014.
Today, U.S. District Judge Melinda Harmon ordered Egbunike to serve 57 months in prison and must pay $2 million in restitution to Medicare and Medicaid. Mbadugha was sentenced in May to 30 months and ordered to pay $404,157.12 in restitution. In addition, Mbadugha forfeited her home which was purchased with proceeds from the fraud.
Vestibular diagnostic testing is used to evaluate a person for vertigo or dizziness. Following diagnosis, patients usually undergo physical therapy, take medication or undergo surgery as treatment.
From approximately 2006 through 2010, Egbunike, Mbadugha and others falsely billed Medicare and Medicaid for numerous, unnecessary vestibular diagnostic tests. Some patients were tested more than 1,000 times. The evidence demonstrated that the testing was either not performed, not medically necessary or not performed by licensed individuals.
As a result of this unlawful scheme, Medicare and Medicaid were billed approximately $2.9 million and paid approximately $2 million. At the time, 88 percent of Egbunike’s Medicare and Medicaid income came from medically unnecessary vestibular testing.
This was the largest case among four, separate vestibular fraud indictments in the Houston area which totaled nearly $6 million.
To date, three physicians and four others have been sentenced in the four cases with $5,639,604.73 in restitution ordered returned to Medicare and Medicaid.
Egbunike has been detained since his arrest in 2014 where he will remain pending transfer to a U.S. Bureau of Prisons facility to be determined in the near future.
The cases are the result of the investigative efforts of the Texas Attorney General’s Medicaid Fraud Control Unit, Department of Health and Human Services - Office of Inspector General, Office of Investigations, and the FBI. Special Assistant U.S. Attorneys Suzanne Bradley and Justin Blan and Assistant U.S. Attorney Tina Ansari are prosecuting the cases.