Two California residents were sentenced for defrauding Affordable Care Act programs in at least 12 states of more than $27 million.
63 year old Jeffrey White was sentenced to 36 months of imprisonment and three years of supervised release, and 35 year old Nicholas White was sentenced to 13 months of imprisonment and three years of supervised release. Both defendants reside in Twin Peaks, California.
Jeffrey White and his son, Nicholas White, conspired to defraud health care plans operating under the Affordable Care Act (commonly referred to as “Obamacare”) by fraudulently enrolling individuals in ACA plans in states where the individuals did not live.
The Whites created phony residential leases using fictitious landlords in various states.The Whites also used an online application to obtain false cell phone numbers for the individuals with area codes that made it appear that the individuals lived at the fictitious addresses, and provided the false cell phone numbers 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.
In order to enroll the individuals in an ACA plan, the Whites paid the insurance premiums for the individuals, and also paid to have the individuals transported to California where the individuals were placed in expensive residential substance abuse treatment programs. The treatment programs then billed the ACA plans for thousands of dollars of treatment each week, including claims for expensive laboratory tests such as blood or urine toxicology screenings.
The treatment programs paid the Whites thousands of dollars in kickbacks 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.
In order to maximize their proceeds from the fraud scheme, the Whites enrolled the individuals in ACA plans in states that paid the highest amount for substance abuse treatment, even though the individuals did not live in those states.
The Whites have admitted that their scheme resulted in more than $27 million in losses to ACA plans across the country, including plans in Connecticut, Arizona, California, Delaware, Indiana, Kentucky, New Jersey, Ohio, Oregon, Pennsylvania, Tennessee, and Texas.