An Ohio man convicted of targeting local seniors and defrauding government health care programs out of millions of dollars in a wheelchair scam was sentenced to seven years and eight months in prison Thursday in U.S. District Court in Lynchburg.
Michael Cowen, 52, operated Active Solutions, an Ohio company that advertised power scooters for seniors on local television stations. Instead, prosecutors said, Cowen’s company delivered heavy, less-mobile power wheelchairs in a bait-and-switch scheme that allowed the company to get more money from Medicare.
According to the U.S. Attorney’s Office in Roanoke, the company was paid $5,000 to $8,000 per power chair instead of $1,900 from the advertised scooter.
Customers who refused delivery were charged a 10-percent restocking fee prohibited by Medicare. In one incident cited by prosecutors, Active Solutions collected a nearly $800 restocking fee from a customer, then resold the wheelchair without telling Medicare until the customer complained.
“Those who prey on the elderly, simply to line their own pockets, will be prosecuted to the fullest extent,” U.S. Attorney Julia Dudley stated in a news release.
Money from the scheme financed gambling trips, retirement plans, a Boca Raton, Fla., condo and a quarter share in a private jet, prosecutors said.
Cowen, who pleaded guilty earlier this year to conspiracy to defraud the United States and health care fraud, told Judge Norman Moon on Thursday that he took responsibility for the crimes.
“I’ve lost everything in my life,” he said. “I’m 52. I worked very hard.”
Cowen told Moon he started the business in 2002 with good intentions, but “things got out of control and here we are today.” According to his indictment, the scheme concluded in 2004.
He has been jailed since November 2007, when he was arrested in Florida as a fugitive from unrelated criminal charges in Ohio.
Tony Anderson, Cowen’s lawyer, asked Moon to sentence his client to time served, citing codefendants who were sentenced to house arrest and probation. Anderson said factors such as DUI and reckless driving convictions in Ohio, and his flight to Florida, over-inflated Cowen’s sentence.
Anderson blamed some of Cowen’s problems on alcoholism and unconstructive legal advice from previous lawyers, who told Cowen he had not violated the law.
Moon, however, told Cowen he found his actions “rather egregious.” The judge said white-collar criminals deserved to be treated like everyone else, particularly because they often have opportunities in life not afforded to others.
Just how much Cowen will have to pay back will be decided within three months, the judge said. Anderson disputed whether the bulk of the restitution, the amount owed to Medicare, was $3.5 million or $4.5 million. Apart from that, the government has seized nearly $2 million in assets from Active Solutions.
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