Cornerstone of Fraud

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Cropped shot of a medical professional filling out paperwork

Luis Angel Lozada, of Clayton, North Carolina, was the cornerstone of a healthcare fraud scheme that stole more than a million dollars from the North Carolina Medicaid system through the submission of false and fraudulent behavioral health claims. It is ironic that Lozada used his behavioral health business, aptly named Cornerstone Family Services Group, to carry out the Medicaid fraud scheme.

In 2016, the behavioral health business was formed and opened in Zebulon. The practice later opened additional offices in nearby areas. Court documents state that a high volume of Medicaid claims was submitted to the government healthcare program for reimbursement. (There was just one teeny problem, o.k., maybe two. The services were never rendered, and the fake claims used stolen beneficiary and clinician information.)

Fraudsters can usually be found in packs, kind of like wolves who work together to stalk, attack, and consume their prey. (Perhaps that is a bit of a violent image, but fraudsters work in a similar fashion to victimize mostly unsuspecting and unlucky individuals.) Lozada’s pack of co-conspirators included Reginald Van Reese, Jr., and Ruben Samuel Matos, who sourced and integrated stolen Medicaid beneficiary data into Cornerstone’s billings. (That beneficiary information was used to back-bill Medicaid, even though the those beneficiaries had never been treated by the behavioral health practice.) Another deceptive comrade, Humberto Mercado, helped Lozada with fabricating treatment records to back up the bogus claims that were submitted to Medicaid.

While it may seem like Lozada had a concise plan to make millions off the North Carolina Medicaid program, it ultimately did not work out for him or his cronies. The four men pleaded guilty to conspiracy to commit health care fraud. Lozado received 70 months in prison, three years of supervised release, and must pay $1,130,137 in criminal restitution to the North Carolina Fund for Medical Assistance.

Matos and Reese each received a prison sentence of 42 months to be followed by three years of supervised release. Both are required to pay $1,997,883 in restitution. Mercado will serve 15 months in prison, followed by three years of supervised release. He will also pay restitution in the amount of $494,688. (It looks like the justice system has pulled away the cornerstones of this fraud scheme, which has caused their entire plan to collapse.)

Today’s Fraud of the Day comes from a Department of Justice press release, “Clayton, NC Resident Sentenced for Conspiring to Defraud the North Carolina Medicaid System,” dated December 15, 2021.

NEW BERN, N.C. – A Clayton, North Carolina man, Luis Angel Lozada, was sentenced today to 70 months in prison and three years of supervised release for conspiracy to commit health care fraud.  On September 18, 2020, Lozada pleaded guilty to the charge.  As part of sentencing, Lozada was also ordered to pay $1,130,137 in criminal restitution to the North Carolina Fund for Medical Assistance.

According to court documents and other information presented in court, between 2016 and 2020, Lozada conspired with multiple individuals to defraud the North Carolina Medicaid system by submitting over $1 million in false and fraudulent claims for the reimbursement of behavioral health services.  Medicaid is a federally funded health care benefit program that helps pay for medical-related services for low-income individuals and their families.  In North Carolina, Medicaid is administered by the North Carolina Department of Health and Human Services, Division of Health Benefits.

 

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.