Businessman Admits To Fraud With Motorized Wheelchairs

Edem James Etuk, 54, the owner of PMS Medical Equipment Distributors

Etuk admitted that as the owner of PMS, a durable medical equipment company, he participated in a conspiracy that resulted in fraudulent billing of Medicare of approximately $3.8 million.

Medicare paid approximately $1,627,000 to PMS over the course of the conspiracy.

As part of his agreement with the federal government, Etuk has agreed to pay $1,627,053 in restitution to Medicare and to cooperate with the government in its continuing investigation and prosecution of individuals committing fraud against the Medicare and Medicaid programs.


HOUSTON, TEXAS—Edem James Etuk, 54, the owner of PMS Medical Equipment Distributors has pleaded guilty to conspiring to defraud Medicare and health care fraud through a “motorized wheelchair scheme”.

At a hearing before U. S. District Judge Lynn N. Hughes, Etuk admitted that as the owner of PMS, a durable medical equipment company, he participated in a conspiracy that resulted in fraudulent billing of Medicare of approximately $3.8 million.

Prosecutors say that during the course of a 14-month period, Etuk and several individuals, including a Houston doctor presently under separate indictment and pending trial in April 2008, conspired to commit health care fraud, wire fraud and to illegally pay kick-backs in relation to the Medicare program. Etuk admitted he engaged in a scheme to defraud Medicare by billing Medicare for motorized wheelchairs which were either not required by the Medicare beneficiary or not delivered, or both.
Etuk purchased falsified Certificates of Medical Necessity (CMN), which are required to bill Medicare, for $200 each from several doctors. The Medicare beneficiaries in this case were recruited illegally by marketers. Etuk admitted paying Houston marketers for recruiting beneficiaries and even purchased CMNs directly from the marketers for $600 to $1000 each. The fraudulent CMNs were used by Etuk to falsely bill Medicare for approximately $3,880,000 in power wheelchairs and accessories. Medicare paid approximately $1,627,000 to PMS over the course of the conspiracy.
As part of his agreement with the federal government, Etuk has agreed to pay $1,627,053 in restitution to Medicare and to cooperate with the government in its continuing investigation and prosecution of individuals committing fraud against the Medicare and Medicaid programs.
The health care fraud count carries a maximum penalty of 10 years in a federal prison and a $250,000 fine. The conspiracy carries a penalty of five years imprisonment and a $250,000 fine. Parole has been abolished in the federal prison system. Sentencing has been scheduled for Jan. 14. 10-17-07