North Carolina man sentenced to prison time, supervised release and more than $1.1 million in restitution for Medicaid fraud conspiracy

Published 11:33 am Sunday, December 26, 2021

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Luis Angel Lozada, of Clayton, was sentenced Wednesday, December 15, 2021 to 70 months in prison and three years of supervised release for conspiracy to commit health care fraud, according to a press release from the U.S. Attorney’s Office, Eastern District of North Carolina. Lozada pleaded guilty to the charge on September 18, 2020. 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. a federally funded health care benefit program that helps pay for medical-related services for low-income individuals and their families, is administered in North Carolina by the North Carolina Department of Health and Human Services, Division of Health Benefits.

In March 2016, Lozada formed a behavioral health business in North Carolina known as Cornerstone Family Services Group (“Cornerstone”). The company was headquartered in Zebulon initially, later opening offices elsewhere in the district.

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“Cornerstone submitted high-volume Medicaid claims for services that were never rendered; the false claims relied on stolen beneficiary and clinician information that was incorporated into the fraudulent billings. Between 2016 and 2017, for example, Lozada partnered with co-conspirators Reginald Van Reese, Jr., and Ruben Samuel Matos to source and integrate the stolen Medicaid beneficiary data into Cornerstone’s billings,” stated the release. “The beneficiary information, in turn, was used to back-bill Medicaid for the maximum number of units allowed, notwithstanding the fact that the beneficiary had never been treated by Cornerstone. Another co-conspirator, Humberto Mercado, was recruited to fabricate treatment records and began to do so before the first billings were submitted to Medicaid.”

Reese, Matos and Mercado each pleaded guilty to conspiracy to commit health care fraud in separate related cases. Mercado was sentenced December 15 to 15 months imprisonment, three years of supervised release and restitution in the amount of $494,688. Reese and Matos were previously sentenced.

Michael F. Easley Jr., United States Attorney for the Eastern District of North Carolina, made the announcement after sentencing by United States District Judge Louise W. Flanagan. The Federal Bureau of Investigation and the North Carolina Medicaid Investigations Division investigated the case and Assistant United States Attorney Adam F. Hulbig prosecuted.