Zambian man pleads guilty to identity theft of hospital patients

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A Zambian man who scribbled down the names, birth dates and Social Security numbers of 19 UPMC Shadyside patients, then gave them to a compatriot, faces possible jail time after his guilty plea in federal court Thursday.

The compatriot, who used that data to submit fake tax returns and claim $84,190 in refunds, has apparently fled back to Zambia, where the long arm of the law may not be able to reach him.

Paul C. Pepala, 35, of Murrysville was a permanent resident of the U.S. and a surgical instrument technician at the hospital in 2008. That February, he took down patients' identifying information, and passed on the names and numbers to Eric Sinyangwe.

That act is the first violation of the Health Insurance Portability and Accountability Act, or HIPAA, to be prosecuted in Western Pennsylvania, according to U.S. Attorney David J. Hickton's office.

Mr. Sinyangwe, along with fellow Zambian Gary Ndanga, ran a West Mifflin-based business called Oubani Taxes. That firm became an authorized tax preparer under the Internal Revenue Service's E-File program.

The firm made arrangements with an unnamed bank to get refund anticipation loans for clients, according to assistant U.S. attorney Gregory C. Melucci.

Mr. Pepala agreed to give the two tax preparers patient data in return for $3,000 or $4,000, Mr. Melucci said. He never got the promised money, said attorney Anthony Bittner, who represents Mr. Pepala.

Mr. Sinyangwe and Mr. Ndanga had "threatening personas," said Mr. Bittner. "Undue influence was exercised on him."

Mr. Sinyangwe prepared 2007 returns in the names of the 19 patients, claiming they were due refunds ranging from $1,170 to $6,273. He got refund anticipation loans for at least some of the returns, and put them in his own bank account, according to an indictment against him.

When some of the patients discovered that their tax returns already had been filed, they alerted the U.S. Postal Service, IRS and U.S. Secret Service. The investigation led to Oubani Taxes.

Mr. Sinyangwe pleaded guilty in May 2010 but had his sentencing postponed. In March, two weeks after a court-sanctioned trip to Orlando, Fla., and Chicago, he disappeared. The sentencing hearing, which had been reset for May 26, was postponed indefinitely.

Mr. Melucci said Mr. Sinyangwe and Mr. Nganda -- who was never charged -- appear to be back in their southern African homeland.

The United States takes the position that a 1931 extradition treaty with the British empire binds Zambia, a former colony. A Zambian embassy spokesman said that pact wasn't in force.

Mr. Pepala will be sentenced Oct. 20. His crime is a misdemeanor, but because he is not a citizen, it could trigger deportation.

Mr. Bittner said Mr. Pepala was a hard worker who sends money to his mother in Zambia and helps a disabled sister in Baltimore. He opted not to say whether Mr. Pepala knew, at the time, that what he was doing was wrong.

"He did not know that these numbers were going to be used for fraudulent tax returns," Mr. Bittner said. "He's ... almost a victim himself."


Rich Lord: rlord@post-gazette.com or 412-263-1542.


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