Dozens Indicted in SoCal Medi-Cal Fraud Scheme

In a crackdown billed as the largest case of Medi-Cal fraud ever filed in the state, 20 people in four Southern California counties were arrested Thursday for allegedly taking part in a ring that made nearly $4.6 million by using untrained and unlicensed nurses to provide care to disabled patients.

Prosecutors said the organizer of the 44-person fraud operation was Priscilla Villabroza, a registered nurse who ran a Santa Fe Springs-based company called Medcare Plus Home Health Providers.

Villabroza pleaded guilty in federal court last year to five counts of health care fraud and is awaiting sentencing, according to the U.S. Attorney's Office.

According to court documents, Villabroza and others hired unlicensed people to provide care to disabled Medi-Cal patients, many of whom were children and young adults suffering from cerebral palsy or developmental disabilities.

None of the patients suffered life-threatening injuries due to the substandard care, Special Assistant U.S. Attorney Anthony Montero said.

The indictment alleges that from August 2004 through the end of 2007, Villabroza and others fraudulently billed the state as if the people they hired were licensed professional nurses.

Some of the unlicensed individuals had foreign training, but never passed a nursing exam here, the indictment alleges. Some had no medical training at all, according to prosecutors.

"Greed, at the expense of our most vulnerable citizens and their quality of care, will not be tolerated," said Glenn R. Ferry of the state Health and Human Services Department.

The federal grand jury indictment unsealed Thursday was part of a two-year multi-agency probe called Operation License Integrity. Charges include conspiracy to commit health care fraud, fraud and aiding-and-abetting.

"We believe this is the largest single case alleging Medi-Cal fraud ever filed in the state," said U.S. Attorney Thomas P. O'Brien. "The nearly four dozen people associated with this fraud ring not only cheated taxpayers, they endangered the lives of young people they promised to protect and care for."

More than 150 agents from local and federal law enforcement agencies took part in the 20 arrests Thursday in Los Angeles, Orange, Riverside and San Bernardino counties, Montero said. Those arrested range in age from 25 to 63, records show.

Prosecutors contend that as part of the alleged scheme, Villabroza instructed the unlicensed caregivers to lie about their qualifications if questioned, Montero said, adding that the company's record books were also falsified.

"If anyone showed up, all their records looked nice and clean," he said.

Villabroza's assistant, Susan Bendigo, was indicted in the scheme last year, but fled the country during the investigation and is considered a fugitive, O'Brien said.

Villabroza faces a maximum of 50 years in prison when she is sentenced, O'Brien said. A sentencing date has not yet been set, and prosecutors declined to comment on whether she was cooperating in the investigation.

The ring "not only cheated taxpayers, they endangered the lives of young people they promised to protect and care for," O'Brien said.

All of those indicted are charged with conspiracy to commit health care fraud, a felony count that carries a statutory maximum penalty of 10 years in federal prison, O'Brien said. The same suspects are also named in at least one substantive count of health care fraud, which also carries a maximum penalty of 10 years.

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