Rajinder Singh Paul and Baljit Kaur Paul, Medicare Fraud, California 2012

Rajinder Singh Paul, 69, and his wife, Baljit Kaur Paul, 65, were arrested yesterday at Los Angeles International Airport in connection with a $16.6 million Medicare fraud scheme.

The couple, who owned and operated a durable medical equipment (DME) wholesale supply company called Major’s Wholesale Medical Supply Inc. in Ontario, California, were charged with conspiracy and health care fraud.

Between 2002 and 2009, Rajinder and Baljit Paul sold primarily high-end power wheelchairs to DME supply companies for approximately $850 to $1,000 per wheelchair. The DME companies, many of which were allegedly fraudulent, billed these power wheelchairs to Medicare at a cost of $3,000 to $6,000 per wheelchair.

According to the indictment, in order to attract and keep the DME companies’ business, Rajinder and Baljit Paul provided over 170 DME companies with backdated, altered, and fabricated invoices which reflected that the companies had purchased power wheelchairs and DME from Major’s earlier than they had.

The indictment alleges that the Pauls provided the DME companies with false inventory purchase agreements that showed the companies had credit limits with Major’s which were higher than the credit limits that Major’s actually extended to the companies.

The indictment alleges that as a result of this scheme, the Pauls and the owners and operators of certain of the companies that Rajinder and Baljit Paul provided with fraudulent invoices submitted approximately $16,662,143 in false claims to Medicare, and received approximately $9,743,609 on those claims.

Rajinder and Baljit Paul are each charged with one count of conspiracy to commit health care fraud and one count of making false statements. The conspiracy count carries a maximum potential penalty of 10 years in prison, and the false statements count carries a maximum potential penalty of five years in prison. Each count also carries a maximum $250,000 fine.

The case is ongoing, with Rajinder and Baljit Paul expected to appear in Los Angeles federal court today.

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