Federal prosecutors indict 42 for Medi-Cal fraud

A federal indictment unsealed this morning alleges that 42 people took part in a ring that defrauded the state’s Medi-Cal insurance program of four-and-a-half million dollars. KPCC’s Brian Watt has more on what prosecutors called an elaborate criminal enterprise.

Brian Watt: The alleged scheme involved unlicensed workers providing in-home services to disabled Medi-Cal patients. U.S. Attorney Thomas O’Brien said many of the patients were children with developmental disabilities, and some of the workers had no medical training at all.

Thomas O’Brien: In one case, a “nurse” was unable to replace a tracheotomy tube that had fallen out of a young patient’s neck. Fortunately in that case, the child’s mother was present and saved the child’s life.

Watt: The indictment says the employer of the "impostor nurses" – Medcare Plus Home Health Providers – billed Medi-Cal as if the workers were licensed vocational nurses. O’Brien told reporters that the owner of the Santa Fe Springs-based company, Priscilla Villabroza, paid the workers 8 to 12 dollars an hour and collected at least three times that from Medi-Cal.

To make the company’s records look right, the indictment says, Villabroza and others provided some workers with the identities of actual licensed vocational nurses. Assistant U.S. Attorney Anthony Montero explained how.

Anthony Montero: What we believe is they went to job fairs, they posted on Craigslist, and legitimate nurses would apply for employment. And as part of the employment process, they’d ask you to give a photocopy of your license, they’d ask you, you know, for a copy of maybe your social security card, whatever. They would get all that. They would never hire the nurse...

Watt: ... but they could use the nurses’ identification when they billed Medi-Cal. Priscilla Villabroza has already pleaded guilty. She faces up to 50 years in prison. On the same morning a grand jury unsealed the indictment, authorities arrested 20 people allegedly connected to the scheme. FBI Special Agent Dan McMullen said this scheme and others like it hit the state and citizens hard during difficult times.

Dan McMullen: The defendants took employment opportunities from legitimately trained and licensed professionals while exploiting government benefit programs to enrich themselves without regard to the ailing or disabled patients.

Watt: State and federal officials urged anyone who suspects Medi-Cal fraud to report it right away.

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