Like Father, Like Son

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Stethoscope on 100 dollar bills symbolizing financial surveillance

A father-son duo has been sentenced for their roles in defrauding Affordable Care Act (ACA) programs in at least 12 states. California residents Jeffery White, 63, and Nicholas White, 35, admitted to participating in a scheme that resulted in more than $27 million in losses.

Jeffery and Nicholas White conspired to fraudulently enroll individuals in ACA plans in states where the individuals did not live. The White’s case is believed to be the first of its kind involving fraudulent enrollment of individuals in ACA plans on a national scale. (I’m sure they’re beaming with pride over their achievement.)

The Whites furthered their conspiracy by creating fraudulent residential leases which listed fictitious landlords in various states. They also used a website to obtain false cell phone numbers that made it appear as if the enrolled individuals lived at the addresses listed. If someone were to call one of the numbers, it would reroute to a phone being monitored by the Whites. (Sadly, the internet makes it easy for fraudsters to run a scheme from the privacy of their own homes.)

As part of their fraudulent healthcare scheme, the Whites paid to have the enrolled individuals transported to California and placed in expensive residential substance abuse treatment programs. (Not exactly an “all expenses included” dream vacation.) The treatment programs then billed the ACA plans for thousands of dollars of treatment each week. This included claims for expensive and unnecessary laboratory tests such as toxicology screenings.

The individuals were illegally enrolled in ACA plans in states that paid the highest amount for substance abuse treatment. (They wanted to get the highest return on their investment.)  The substance abuse treatment programs would pay the Whites thousands of dollars in kickbacks for each referral. Some of the treatment programs also gave the Whites a percentage of the money they received from the ACA insurance plans.

The Whites have admitted that their scheme resulted in more than $27 million in losses to ACA plans across the country. States affected include Connecticut, Arizona, California, Delaware, Indiana, Kentucky, New Jersey, Ohio, Oregon, Pennsylvania, Tennessee, and Texas.

Both Jeffrey and Nicolas White pleaded guilty to one count of conspiracy to commit health care fraud October 12, 2018. Jeffery White was sentenced to 36 months of imprisonment and three years of supervised release. Nicholas White was sentenced to 13 months of imprisonment and three years of supervised release.

Although the Whites personally profited approximately $1 million through this scheme, they were ordered to pay restitution in the approximate amount of $27,617,000. The Whites were released on bond and are required to report to prison later this year. (Who knows, maybe the father-son duo will get to be cellmates to keep family together. Then again, probably not.)

Today’s Fraud of the Day comes from a Department of Justice press release, “Father and Son Who Defrauded Numerous State Affordable Care Act Programs Sentenced to Prison,” dated February 23, 2021.

Two California residents were sentenced today by U.S. District Judge Alvin W. Thompson in Hartford for defrauding Affordable Care Act programs in at least 12 states of more than $27 million.  JEFFREY WHITE, 63, was sentenced to 36 months of imprisonment and three years of supervised release, and NICHOLAS WHITE, 35, was sentenced to 13 months of imprisonment and three years of supervised release.  Both defendants reside in Twin Peaks, California.

Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), the sentencings occurred via videoconference.

 

 

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.