$24 million DME fraud scheme earns man 10 years in jail

SANTA ANA, Calif - An Orange County man who helped organize a giant durable medical equipment scheme that defrauded Medicare out of millions of dollars was sentenced last week to 10 years in prison. Phu Luong, 51, of Huntington Beach, was sentenced by United States District Judge Cormac J. Carney in Santa Ana. In addition to the prison term, Judge Carney ordered Luong to pay $6,417,000 in restitution to Medicare. Luong was convicted in April 2006 of 35 counts of health care fraud and five counts of money laundering. Luong was the owner of a DME company called United Medical Supply that submitted fraudulent claims to Medicare for DME that was not medically necessary and, in many cases, never delivered. Of $24 million in fraudulent claims submitted by United, Medicare paid approximately $14 million. The investigation into United's activities began when Medicare noticed that United was submitting an exorbitant number of claims for enteral nutrition and that the referring physician on almost all of the claims was the same. Furthermore, Medicare received 363 complaints against United, generally alleging that beneficiaries did not need or did not receive the items billed by United to Medicare. Three others also convicted at trial of 35 counts of health care fraud were, according to federal officials: Sareth Tath, 56, of Long Beach, Luong's partner, who recruited physicians to provide fraudulent prescriptions for DME; Mo Thi Pham, 50, of Westminster, Tath's partner, who hired drivers and marketers to recruit Medicare beneficiaries to receive DME that was not medically necessary; and Peter Kim, 82, of Los Angeles, who recruited and drove beneficiaries to the physicians.