Brothers convicted in $6M health care fraud conspiracy

Pair ran ambulance company KMD Healthcare Services

By Michelle Ganley - Graham Media Group

HOUSTON - Two brothers were convicted Friday of health care fraud, conspiring to commit health care fraud and money laundering, in an elaborate scheme involving Medicare, according to the U.S. Attorney’s Office.

Melvin Olusola Davies, 28, and Kevin Olufemi Davies, 29, owned and operated KMD Healthcare Services Inc., from their home in a gated townhouse community in Houston, according to a news release from investigators.

They admitted to using stand-in emergency medical technicians who weren’t affiliated with the company, in order to pass the state inspection necessary to enroll in the Medicare program, officials said. The admission came as part of the Davies’ guilty pleas.

“Medicare and Medicaid only pay for medically necessary ambulance services in vehicles designed and equipped to respond to medical emergencies and for patients who cannot be safely transported by any other means of transportation,” said a news release from the office of U.S. Attorney Kenneth Magidson. “Medicare also requires two individuals to staff ambulance transports, including at least one licensed EMT.”

Only one EMT was present when KMD transported Medicare beneficiaries in private passenger vans, the brothers admitted, according to officials.

Still, the EMTs wrote up ambulance run sheets, despite the fact that those receiving Medicare benefits didn’t travel by ambulance or need ambulance services, the news release said.

The passengers were not bed-bound, could walk and routinely used non-ambulance transport in their daily lives, Magidson said. One patient even walked to her own therapy session, but KMD billed Medicare $51,952 for her ambulance transportation, according to officials.

Melvin Olusola Davies and Kevin Olufemi Davies paid a Houston physician $500 per medical necessity order so that they could bill Medicare, the brothers admitted.

KMD billed Medicare, Medicaid and Tricare, which is another government health program, about $6,293,108 in false claims for ambulance services that weren’t provided or medically necessary, investigators said.

In turn, the brothers received at least $2,201,137 from Medicare, $219,924 from Medicaid and $16,735.29 from Tricare.

The brothers will have to pay full restitution to the programs. They’ve also agreed to give up vehicles they purchased with the fraudulent proceeds, including a 2010 Porsche Panamera and a 2012 Mercedes Benz CLS.

The Davies’ sentencing is set for March 13. They each face up to 10 years in federal prison on each count, as well as a possible $250,000 fine. They’ve been in federal custody since their arrest on May 25.

2016 Click2Houston/KPRC2