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A U.S. District judge last August convicted Imadeldin Awad Khair, 57, – also known as “Nadr Awad” – of 17 counts of an indictment that charged him with health care fraud, obstructing a federal audit, tax evasion and money laundering following a nine-day bench trial in Newark.
Khair was excluded from participating in any capacity in Medicare, Medicaid, or other federal health care programs for a minimum of 11 years in 2004, following a state health care fraud conviction, U.S. Attorney Paul J. Fishman said.
Khair began operating K&S Invalid Coach in his brother’s name and illegally received more than $9 million in claims from Medicare and Medicaid, Fishman said.
As part of the scheme, he “recruited a business associate to tell authorities that Khair was his full-time employee so that Khair could continue running K&S in violation of his exclusion,” the U.S. Attorney said. “Khair also used fraudulent paystubs provided by his business associate to convince authorities that he was not violating the terms of his exclusion.”
When federal agents raided the company’s office two year ago, Khair’s top managers “directed employees via group text message to tell the agents that Khair’s brother was really in charge at K&S,” Fishman said.
“In addition, on the first day of trial, Khair tried to influence a government witness just outside of the courtroom by claiming that he had over two dozen employees who were going to testify that his brother had really been in charge at K&S,” he said.
Khair also paid various K&S employees off the books, including all overtime wages, the judge found.
“To carry out the tax evasion scheme, Khair paid the wages in cash or handwritten check and directed K&S employees to keep two separate sets of books,” Fishman said. “Khair then directed company employees to send only the fraudulent set of books to the company’s payroll accountant.”
In response to a 2014 U.S. Department of Labor audit, Khair “held an employee meeting in which he directed K&S employees to lie to the Department of Labor by stating that they never worked more than 80 hours in a biweekly pay period,” the U.S. attorney said.
“Khair also directed K&S employees to alter and falsify K&S timekeeping records to match the false amounts previously reported to the company’s payroll accountant,” he said.
The money-laundering conviction “arose from K&S checks that were written and endorsed by Khair and made payable to ‘cash’ or Khair himself, which were used to pay the undisclosed wages and enrich Khair personally,” Fishman said.
In addition to the prison term, Wigenton ordered Khair to serve three years of supervised release and to pay $8.8 million in restitution.Fishman credited special agents of the FBI, the U.S. Department of Health and Human Services Office of Inspector General and special agents of IRS-Criminal Investigation. The trial was conducted by Assistant U.S. Attorneys Danielle M. Corcione and Osmar J. Benvenuto of the U.S. Attorney’s Office Criminal Division in Newark.
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