Feds: Father, son defrauded ACA programs out of over $27 million
A father and son out of California pleaded guilty Friday to conspiring to defraud Affordable Care Act programs out of more than $27 million in at least 12 states, the Department of Justice said.
Jeffery White, 60, and Nicholas White, 33, of Twin Peaks, Calif., appeared in Hartford federal court Friday. The two were health care professionals, said FBI Special Agent in Charge Brian C. Turner.
“The ACA was not enacted to fill the coffers of greedy health care professionals,” Turner said.
In pleading guilty, the Whites admitted that their scheme led to more than $27 million in losses to ACA — also known as Obamacare — plans across the country, including plans in Arizona, California, Connecticut, Delaware, Indiana, Kentucky, New Jersey, Ohio, Oregon, Pennsylvania, Tennessee and Texas.
The investigation into the fraud is ongoing, the DOJ said.
U.S. Attorney John H. Durham of the District of Connecticut said this case is believed to be the first of its kind involving fraudulent enrollment of individuals in ACA plans on a national scale.
“Health care fraud on ACA plans results in higher insurance premiums for residents in the affected state who are seeking health insurance,” Durham said. “We greatly appreciate the outstanding work by the federal law enforcement agencies in identifying and investigating this fraud scheme that cost insurers more than $27 million.”
Court documents showed that Jeffery White and Nicholas White conspired to defraud health care plans that operate under the ACA in Connecticut and at least 11 other states by fraudulently enrolling people in plans in states where they did not live.
The Whites created fake residential leases using fake landlords in various states to further their conspiracy, including Danbury, Farmington, Hartford and Norwalk, court documents showed. There were also fake addresses and cell phone numbers given to the ACA plans.
“If anyone at the ACA plan called the false local number, the call would ring through to a phone controlled by the Whites,” the DOJ said.
After fraudulently enrolling the people in the ACA plans, the father and son indicated that the individuals had to be flown to California to be put into expensive residential substance abuse treatment programs. Court documents showed that they billed the plans thousands of dollars of treatment every week.
“The treatment programs paid the Whites thousands of dollars for each referral, and some programs arranged for the Whites to receive a percentage of the money the treatment programs received from the ACA health insurance plans,” the DOJ said.
The agency said the duo enrolled people in plans in states that paid the highest amount of substance abuse treatment in order to maximize their profits from the scheme.
Jeffery White and Nicholas White each pleaded guilty to one count of conspiracy to commit health care fraud. The offense carries a maximum term of 10 years in prison.
The two were released on bail pending sentencing, the DOJ said. They’ll face sentencing on Jan. 4, 2019.