Attorney General James Announces State Prison Sentence Of Former Owner Of Brooklyn Medical Supply Company In Million Dollar Medicaid Fraud Scheme

   Attorney General Letitia James today announced the state prison sentence of Kester Atumonyogo, 49, of Baldwin, New York, for defrauding the State Medicaid program of over one million dollars.  Today, the Honorable Danny Chun of Brooklyn Supreme Court sentenced the defendant to one-and-one-third to four years following the defendant’s September 5th guilty plea to Health Care Fraud in the First Degree, a class B felony; Grand Larceny in the Second Degree, a class C felony; and Welfare Fraud in the Third Degree, a class D felony. 

“It is unconscionable that an individual would use a Medicaid fraud scheme as a means to exploit children with disabilities and their families for their own personal gain,” said Attorney General Letitia James. “My office will continue to hold fraudsters accountable for stealing from the Medicaid program and anyone else who tries to take advantage of our State's vulnerable families. This behavior will never be tolerated.”

The defendant’s conviction and sentence concludes the second half of a long-term investigation by the Attorney General’s Medicaid Fraud Control Unit (“MFCU”) into fraudulent durable medical equipment providers in Brooklyn, New York.  In pleading guilty, the defendant admitted to stealing over one million dollars from Medicaid and from HealthFirst, a Medicaid funded Managed Care Organization, by filing false claims alleging to have dispensed a highly specialized -- and expensive -- enteral nutritional formula to Medicaid recipients, when in reality he only dispensed PediaSure and other inexpensive over-the-counter nutritional supplements.  This type of scheme is often referred to as “up-coding.” The defendant further admitted to having illegally obtained a social security number and using that number to illegally apply for and receive welfare benefits.

In the first half of the investigation, MFCU prosecuted five individuals and three corporations for defrauding Medicaid based on a similar upcoding scheme that falsely billed for dispensing inexpensive over-the-counter nutritional supplements as if they were highly specialized and expensive enteral formula. That investigation resulted in the conviction of four individuals by guilty plea -- Keva Johnson, Yolane Fouche, Nkem Ude and Erter Brown, the conviction of three corporations -- First Billing Options, Inc., One Source Medical Supply, Inc., and Y Love Jewelry, Inc., and the conviction by jury trial of Humphrey Ude.  Ude was convicted of Grand Larceny in the First Degree and other crimes and was sentenced to 7 to 21 years in state prison.  Through a parallel asset forfeiture civil action, MFCU also obtained several high end vehicles that were purchased by defendants with stolen Medicaid funds:  a 2012 Audi A7 sedan, a 2013 Mercedes Benz Model G63, a 2021 Porsche Cayenne, a 2007 Lamborghini and a 2008 Toyota Tundra.  All of the vehicles were subsequently sold at auction and the proceeds returned to the State Medicaid program as restitution.

The Attorney General would like to thank the New York State Department of Health, the New York State Office of the Medicaid Inspector General, the New York City Department of Human Resources, the Office of the Inspector General of the Social Security Administration, and the New York State Department of Motor Vehicles for assistance during the investigation. The Attorney General, in particular, would like to acknowledge the cooperation and assistance provided by HealthFirst throughout the investigation.