The Federal Bureau of Investigation special agent responsible for arresting couple Melvin and Leyda Ada in 2012 for alleged healthcare fraud exceeding $1.7 million testified in federal court yesterday.
Special agent Edmund Harrison Ewing said Melvin Ada “almost had a look of resignation,” when he was arrested with his wife, Leyda, in the backroom of their Island Trendz business in Garapan. Leyda, on other hand, was more “aggressive,” asking a lot of questions about what was happening and what the charges were.
Ewing also said the Leyda Ada appeared upset and later, without being asked, told him that the business was not in her name but in the name of Melvin Ada’s father, and their residence was also not in their name but in the name of Melvin’s father.
Leyda Ada is accused of conspiring with her husband, Melvin, to perpetrate healthcare fraud exceeding $1.7 million. Melvin Ada, a former employee of the Commonwealth Health Center, has since pleaded guilty to 56 charges for misappropriating and diverting CNMI Treasury checks made payable to a medical supplier company totaling over $1.7 million. Leyda Ada, who is facing charges of conspiracy to commit laundering, money laundering, and perjury, has pleaded not guilty to all charges.
Ewing, now working in the FBI’s San Francisco division, was the original case agent for the Ada investigation. He lived in the CNMI from approximately 2010 to 2013.
Ewing testified yesterday that in August 2011, Commonwealth Healthcare Corp. officials Esther Muna and Joseph Villagomez informed him of possible theft at CHC.
The officials had observed abnormality with the billing for Midwest Medical Supply, or MMS, who CHC contracts with. He said they at first indicated losses of about $300,000.
He then issued subpoenas for documents at CHC, the Department of Finance, and MMS and compared these documents. The agent said he also talked to MMS representatives.
He recalled that Finance had several copies for checks intended for MMS. The MMS representative, Bill Munson, gave him a complete list of banks where the checks were to be cashed, he said.
He compared that list to Finance documents to find that the checks from Finance were not actually deposited into the bank accounts provided by MMS.
He said the “burning question” then was: how could Melvin Ada cash checks that weren’t made out to him?
He was informed by MMS that Melvin’s wife, Leyda, was briefly employed by MMS and as result got an employment contract with MMS.
He said that contract was the basis for opening accounts with MSS and enabled Melvin Ada to deposit those checks. He said the grand jury subpoenaed bank records that included signatures, which led him to realize the amount of checks to Melvin’s account was $1.4 million. Finance later determined that this loss amount was $1.79 million.
Ewing said he believes that the timeframe of the “risk of loss” was between the time Melvin Ada was employed under his father-in-law Joe Ichihara in CHC’s Material and Supply Office before transferring to the accounting section due to a conflict of interest.
He said that was his estimate when the transfer occurred.
He said in 2011 he worked closely with financial analysts in Honolulu, conducted interviews with CHC, Finance, and MMS to understand thoroughly of the couple’s role in theft, loss amount, and where the money went.
In September 2012, this culminated in charges being presented to the couple. On Sept. 25, 2012 an arrest warrant was issued and Ewing went to Island Trendz Business store to arrest the couple.
He said he met an employee standing behind a counter, and asked him if Melvin Ada was there. The employee, who was not identified, did not answer, he said, but looked in the direction of the store’s backroom.
Walking into this room, Ewing saw a male, which he identified as Melvin Ada, and then proceeded to arrest him. A female entered the area, who was identified as Leyda Ada, and asked what was going on. She was also placed under arrest, Ewing said.
Ewing said Melvin Ada was submissive and immediately cooperative. He said he “almost had a look of resignation.”
Ewing described Leyda Ada as “aggressive,” asking a lot of questions, asking to know her charges, and what was happening.
The couple was then transported to the Marshall’s office in federal court, he said, and kept separate.
The prosecution asked Ewing if Leyda Ada made any statement to him. He said yes, and was then asked if these were in response to any questioning. Ewing said it wasn’t.
Ewing said her first statement was that she was upset, and that she never has been in trouble with law before, and this was new to her.
Ewing said Ada told him that the business was not in her name but in the name of her husband’s father.
When asked by the prosecution, Ewing said he interpreted this as her saying that the business couldn’t be associated with her.
Ewing also said Leyda Ada told him that their residence or house was also under the name of her husband’s father.
To this, he said, “I understand,” Ewing recalled, but said he proceeded to refrain from speaking further to as her statements were becoming more material to the case.
During cross-examination, defense counsel Mark Hanson asked if Ewing showed any documents that indicated they were going to seize her house or business. Ewing said her statements were not in response to any questions.
Ewing said Leyda Ada requested to see her private counsel before he could even question her in the Marshall’s conference room.
The FBI also searched the Ada couple’s house and business the day they were arrested.
On Monday this week, testimony from an FBI agent revealed that among other items and documents, they seized “expensive” handbags and $4,000 cash “hidden” in a basket filled with lingerie.
The FBI agent, Haejun Park, said on Monday that the handbags found were a Celine bag, Louis Vuitton wallet, Louis Vuitton cross-body bag; Celine leather bag, Givenchy black cloth wallet, Prada black cloth handbag, Louis Vuitton handbag, and Louis Vuitton brown/gold handbag.