Luxury cars seized amid alleged $30 million fraud ring involving children’s health services 02:30
Federal law enforcement officials on Thursday announced that two Ohio state employees and two co-conspirators were indicted in connection with an alleged $30 million Medicaid billing fraud scheme involving children’s behavioral health services that were never rendered.
At a press conference in Ohio, acting Attorney General Todd Blanche said the Medicaid fraud case was just one of several cases unsealed over the last week targeting some $50 million of fraud, including one case involving a $1.4 million COVID-19 loan fraud scheme.
All four defendants involved in the Medicaid fraud case turned themselves in to authorities this week, a source familiar with the investigation told CBS News.
As part of the investigation, 14 vehicles were seized, including a Maserati, a Mercedes, a Bentley and a McLaren, according to the source.
The defendants are alleged to have offered therapeutic behavioral services and psychotherapy to young adults and children who were attending summer camps, church groups and recreational programs, according to the source.
Fourteen luxury cars seized by authorities in a fraud investigation are seen in a photo combination provided by the Justice Department. / Credit: U.S. Department of Justice
The alleged ringleaders diagnosed every single recipient with a behavioral adjustment disorder, which allowed them to profit off the vulnerable children, according to the source. But no assessment testing was ever done, the behavioral services never occurred, and the kids never got any care.
Participants were required to complete “intake packets” and provide their Medicaid recipient number, which are required to bill for the services, according to the source.
A medical assessment was also required, but, according to the source, the defendants didn’t conduct a single test.
Thursday’s announcement came from the Justice Department, state officials and other members of President Trump’s Task Force to Eliminate Fraud, which is led by Vice President JD Vance as part of an effort to beef up efforts to combat fraud against federal and state government programs.
A spokesperson for Vance called the Medicaid fraud allegations disgusting in a statement to CBS News.
“It is disgusting that fraudsters were allowed to deprive essential developmental services from American children in need,” the spokesperson said. “Countless lives could have been made better by the millions of tax dollars stolen, but instead they were used to purchase luxury cars. This is another example of the type of fraud the Vice President’s task force is putting a stop to.”
Republicans and Democrats have traded barbs about who is responsible for creating circumstances that allow for fraud and who is doing more to fix it.
CBS News has been investigating multiple forms of fraud for months. One investigation into hospice fraud examined the business and financial records of every hospice currently operating in Los Angeles County, applying the same indicators identified by state auditors as potential red flags for fraud. The analysis revealed that over 700 of the roughly 1,800 hospices in Los Angeles County trigger multiple red flags for fraud as defined by the state.
Fraud in Minnesota has also been a focus of the Trump administration. CBS News has investigated the state’s biggest fraud scheme to date, and interviewed the alleged mastermind, 45-year-old Aimee Bock.
In an exclusive interview from her jail cell, Bock defended her conduct, admitted regrets and argued that state officials who she worked with should bear some of the blame. It was the first time Bock spoke publicly since she was arrested for her role in what prosecutors say was a $250 million COVID-era effort to defraud a federal program to feed hungry children.
In a series of other cases, meanwhile, the Justice Department secured indictments against several individuals who are accused of their involvement in romance fraud schemes that targeted older Americans on dating websites and social media platforms.
“It is the mission of this Department of Justice every single day to be relentless in the pursuit of law and order. Americans deserve to live free of violence and fraud,” said Blanche, who is expected to be formally nominated by Mr. Trump as soon as Thursday to be attorney general on a permanent basis.
At Thursday’s news conference, FBI Director Kash Patel unveiled a new type of list laying out what he called the “most wanted fraudsters.”
A poster from the FBI shows a group of people who the bureau says are the most wanted fugitives accused of fraud. / Credit: FBI
“It is live, officially on the FBI website,” he said. “I want all Americans to take a look at these most wanted individuals and look at the amounts — the tens of millions and billions of dollars in fraud that they have decimated our societies from.”
The Trump administration has focused on going after fraud targeting a variety of government programs, such as Medicaid, Medicare and small business loans.
As part of that effort, the Justice Department separately created a new National Fraud Enforcement Division which merged a number of Justice Department offices, including its healthcare fraud section.
Colin McDonald, the assistant attorney general who leads it, announced on Thursday that his division and the Ohio secretary of state had inked a new data-sharing agreement that will provide the Justice Department with access to corporate registration data.
“This data will be used in proactive data analysis to quickly identify ownership links between plants, labs, and billing entities that fraudsters use and hide behind to obscure control over healthcare fraud and other fraud schemes,” McDonald said.
At the same time, however, task force members on Thursday accused some Democratic-led states of failing to crack down on fraud and work well with federal partners.
Federal Trade Commission Chairman Andrew Ferguson announced that the federal government was formally decertifying Hawaii’s Medicaid Fraud Control Unit over allegations it had received “millions and millions of dollars to fight fraud, and has consistently been one of the lowest performing fraud units in the country.”
“This morning, the inspector general, in coordination with the task force, exercised his statutory obligation to end the grants being paid to Hawaii to make sure that money that goes out the door to the states is going to actually fight fraud,” he said.
CBS News has reached out to the Hawaii Medicaid Fraud Control Unit for comment.
Blanche also accused Minnesota of failing to cooperate.
“We’re seeing that in Minnesota,” he said, adding that the state’s governor, Tim Walz, claims to be cooperating with the Justice Department. “The truth is, he’s suing us. He’s not cooperating with us, OK?”
