Sold Used Power Wheel Chairs and Hospital Beds as if They Were New
INDIANAPOLIS - September 30, 2015 - United States Attorney Josh J. Minkler announced today the sentencing of an Indianapolis man for defrauding Medicare, Medicaid and Anthem Blue Cross as well as identity theft. Ronald Reed, 47, of Indianapolis was sentenced by U.S. District Judge Jane Magnus-Stinson to 46 months in federal prison.
“Mr. Reed, and others like him, cost American taxpayers billions of dollars every year through waste, fraud and abuse,” said Minkler. “He took advantage of individual patients and left one victim stranded on the roadside but now he will spend nearly four years in federal prison to think about his crime.”
Reed, through his company Benchmark Mobility, provided power wheelchairs and hospital beds to disabled Hoosiers through Medicare, Medicaid, and Anthem. In 2009, Reed and Benchmark were in financial difficulty and no longer able to purchase inventory from manufacturers. Reed devised a scheme where he purchased used wheel chairs and beds from eBay, Craig’s List, and similar sights at significant discounts. Reed then directed that the equipment have its serial numbers stripped, and be repainted in an attempt to hide its used nature. These products were then given to beneficiaries and billed to the insurance companies as if new. This conduct continued from 2009-2011.
Often times this equipment was in severe disrepair. On multiple occasions, disabled beneficiaries were stranded when their “new” equipment broke down and the Indianapolis Metropolitan Police Department even had to assist on one occasion. As a result of this scheme, Reed stole over $400,000 from the public insurance programs.
While pending trial for the health care fraud charge, Reed continued his criminal activity. Reed sent multiple false documents as well as a stolen identity to a finance company in an attempt to obtain an additional $30,000. Reed did so while falsely representing he was the owner of a company he was not, and purported to pledge that company’s accounts as collateral for the loan.
In sentencing Reed, District Court Judge Jane Magnus-Stinson focused on the harm perpetrated on Reed’s customers, and his continuing criminal conduct in saying that Reed had failed to demonstrate a respect for the law and needed a strong sentence to deter him from further fraudulent behavior.
This case was investigated by the Federal Bureau of Investigation, U.S. Department of Health and Human Services, Office of Inspector General, and the Indiana Attorney General’s Office.
“This case not only emphasizes the cooperation between federal, state and local law enforcement agencies to investigate and prosecute those who engage in this type of crime, but also reveals the damaging effects of such crimes on our community which will not be tolerated,” said FBI Special Agent in Charge W. Jay Abbott.
“Today’s sentencing sends a clear message to those who would exploit federally funded health care programs that they will be held accountable,” said Lamont Pugh III, Special Agent in Charge of the U.S. Department of Health & Human Services, Office of Inspector General, Chicago Region, which oversees the State of Indiana. “The OIG will continue to work with our Federal and state partners to protect valuable taxpayers’ resources and ensure the integrity of the Medicare and Medicaid programs.”
“The investigative work by my office’s Medicaid Fraud Control Unit and our federal colleagues determined this defendant violated the public trust by billing the Medicaid program for ‘new’ equipment that was in fact used. This conduct will not be tolerated, and we appreciate U.S. Attorney Minkler’s office resolving this case and holding this defendant accountable through requiring restitution,” said Indiana Attorney General Greg Zoeller, whose office operates the MFCU where fraud complaints can be filed at this link: http://www.in.gov/attorneygeneral/2453.htm
According to Assistant U.S. Attorney Bradley P. Shepard who prosecuted this case for the government, Reed faces two years of supervised release following his sentence.
U.S. Attorney’s Office
Southern District of Indiana
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