Imprisoned for Medicare Fraud, Bucks Man Also Accused of Online Retail Scam

Matthew Kolodesh has become quite familiar with Pennsylvania’s criminal justice system this year. The 52-year-old Churchville man was sentenced in U.S. District Court in Philadelphia on May 27 to 14 years in prison, and ordered to pay $16.2 million in restitution to Medicare, for defrauding the government through his home hospice business.

And on Friday, Pennsylvania Attorney General Kathleen Kane said her office’s Bureau of Consumer Protection filed a lawsuit against two online furniture retailers and their owners — one of who is Kolodesh — on behalf of consumers across the country whose orders were allegedly unfulfilled by the companies. The lawsuit seeks an injunction against the owners to stop their alleged misconduct.

Defendants named in the complaint include MIG Enterprises Inc., which operated under the name Furniture XO; Salada Enterprises Inc., which operated under the name Furniture PM; and their owners, Kolodesh and Nellie Tsan of Holland, Pa.

Kane said that between August 2011 and January 2013, the Philadelphia-based companies allegedly took money from dozens of consumers for furniture purchased on their websites but failed to deliver the furniture. According to the complaint, filed in the Philadelphia County Court of Common Pleas, Furniture XO suffered cash flow problems and, as a result, the defendants used money from new consumers to pay for orders they placed with the manufacturers and/or distributors to fulfill orders from earlier customers or to provide refunds to earlier customers. This ultimately caused significant delays in the order fulfillments.

The defendants also allegedly opened Furniture PM in an attempt to fulfill outstanding orders from Furniture XO and to provide refunds to the consumers.

Prosecutors said Kolodesh and Tsan never recovered from their cash flow problems and in many cases failed to submit the furniture order to the manufacturer or distributor, failed to deliver the consumers’ furniture and failed to provide refunds to the consumers who paid for furniture but did not receive it.

In the complaint, Kolodesh’s address is listed as Old NC Highway 75, Butler, N.C., which happens to be a federal prison. That has been his home since he was sentenced in federal court less than two months ago to 176 months in prison for Medicare fraud.

A federal jury in October found Matthew Kolodesh, 52, or Churchville, Pa., guilty of conspiracy to commit health-care fraud, 21 counts of health-care fraud, 11 counts of money laundering, and two counts of mail fraud.

According to the U.S. Attorney’s Office in Philadelphia, Kolodesh’s now-defunct business, Home Care Hospice Inc. on Grant Avenue in Northeast Philadelphia, submitted false claims to Medicare totaling approximately $16.2 million for patients that were either not eligible for hospice services or never received the level of hospice services billed by the hospice to Medicare.

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Source: Biz Journals