A one-time Houston club owner pleaded guilty Tuesday to masterminding an $8 million Medicare fraud scheme in which he used four private ambulance companies to ferry fake patients to mental health clinics.
Julian Vence Kimble, 46, pleaded guilty to one count of conspiracy to commit health care fraud, conspiracy to commit money laundering and tax evasion for a series of schemes involving kickbacks and medically unnecessary ambulance trips and clinic treatment for patients.
A Houston Chronicle investigation in October documented the unabated growth of private EMS companies in the Houston region, many of which were dubiously billing Medicare for passengers who likely did not qualify for transports to mental health clinics.
U.S. Attorney Justo Mendez detailed in court that Kimble bought four EMS companies – Monarch Ambulance, Universal Care EMS, XTRA Care EMS and Delta Care EMS – and then hid his ownership through “straw owners” so he could engineer the bilking scheme.
Kimble and his unidentified accomplices used a variety of vehicles – ambulances, vans and sedans – to transport people who were paid kickbacks in exchange for their Medicare number. They then paid between $25 and $75 a day to ride to mental health clinics, which then paid Kimble kickbacks.
None of the “straw owners” apparently knew of the scheme, which submitted more than $8.4 million in fraudulent bills to Medicare between 2008 and 2010.
Of that amount, Medicare paid $3.6 million to Kimble’s companies. Kimble had unnamed co-conspirators write checks from the companies’ accounts, cash them, pay kickbacks to patients out of the funds and return the rest to him.
The investigation concluded that Kimble paid the unidentified accomplices more than $1 million for cashing the checks.
When U.S. District Judge David Hittner pressed Mendez about the accomplices, the prosecutor would say only that “the investigation is continuing.”
Mendez also told the judge that neither the trips billed by Kimble’s companies nor the treatment provided by the clinics – both billed to Medicare – were medically unnecessary.
The tax evasion charges stem from another company Kimble owned, Pearl Ambulance. According to the criminal complaint, he reported his taxable income for 2003 was less than $200,000 and that he owed no taxes.
A subsequent Internal Revenue Service investigation revealed that Kimble’s taxable income for that year actually came to $2 million and that he owed $329,310 in taxes that year.
Kimble, who was out on an unsecured $30,000 bond, was ordered into federal custody until his sentencing hearing Feb. 22. He could face up to 35 years in prison.
In exchange for his guilty plea, Kimble will face no additional charges. He declined to comment.
Kimble was once the majority owner of the downtown club Grooves at 2300 Pierce, according to a lawsuit over debt the club incurred.
But shortly after he and his partners in the nightclub deal began renovating the building, federal agents notified his partners that Kimble was under investigation for Medicare fraud and money laundering and that his assets had been frozen. The lawsuit was withdrawn last week