Justice Department Prosecutes a Half-Billion Dollars in Healthcare and COVID Fraud Schemes Exploiting Taxpayer Funded Programs

The Justice Department announced today three separate civil and criminal actions to hold two companies and two individual defendants accountable for schemes that attempted to fraudulently bill taxpayer-funded programs of over $500 million.

Department of Justice efforts support President Trump's Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

"Thanks to the leadership of President Donald Trump, the Department, working closely with the Task Force to Eliminate Fraud, is supercharging efforts to take down every fraudster and bring them to justice," said Acting Attorney General Todd Blanche. "In one day, the Department prosecuted the theft of a half-billion in taxpayer dollars. All those ripping off the American people are on notice."

National Partnership of Insurance Brokers and its Former Subsidiary Agree to Pay Over $160 Million For Affordable Care Act Enrollment Fraud Scheme

AP of South Florida, LLC (APSF), an insurance brokerage company headquartered in Florida, has agreed to plead guilty for its role in an Affordable Care Act (ACA) enrollment fraud scheme. APSF, through its highest-ranking executives, preyed on thousands of vulnerable consumers to fraudulently enroll them into fully subsidized ACA plans, for which the federal government awarded $141.5 million in unwarranted subsidies. In a parallel civil resolution, AssuredPartners, Inc., a national partnership of insurance brokers and the then-parent company of APSF, agreed to pay $135 million to resolve allegations that it violated the False Claims Act by submitting fraudulent ACA health insurance plan applications. AssuredPartners, Inc., is not charged in the criminal information.

The Criminal Case

The federal government offers subsidies to help eligible beneficiaries pay for health insurance plans. These subsidies are offered as tax credits to beneficiaries or as payments to insurers as Advanced Premium Tax Credits (APTCs). APTCs are paid directly to insurance plans by the federal government in the form of a payment toward the beneficiary's applicable monthly premium.

A criminal information was filed yesterday charging APSF with one count of major fraud against the United States. APSF has agreed to resolve the criminal charge by pleading guilty and paying restitution of $27.6 million. As part of its plea agreement, APSF admitted that, through certain of its executives and employees, APSF knowingly and intentionally defrauded the federal government. According to court documents, APSF targeted vulnerable, low-income individuals experiencing homelessness, unemployment, and mental health and substance abuse disorders, and, through "street marketers" working on APSF's behalf, sometimes offered cash and gift cards to induce those individuals to enroll in subsidized ACA plans. APSF enrolled these vulnerable consumers in ACA plans that were fully subsidized by the federal government by submitting false and fraudulent applications for individuals whose income did not meet the minimum requirements to be eligible for the subsidies. As a result of being enrolled in subsidized ACA plans for which they did not qualify, some of these consumers experienced serious disruptions in their medical care or prior insurance coverage under Medicaid or other programs. Some consumers who APSF fraudulently enrolled into fully subsidized ACA plans lost access to free health benefits through Medicaid or local assistance programs, and as a result, these consumers faced increased costs in accessing HIV medication, medication to treat opioid dependence and medication to treat mental health disorders. At times, consumers faced unaffordable co-pays and other costs because APSF enrolled these consumers in plans without regard to the consumers' medical needs, the availability of other programs (including Medicaid and local assistance programs) and the consumers' ability to pay out-of-pocket costs.

FBI, HHS-OIG and IRS-CI are investigating the criminal case.

The Civil Case

The False Claims Act settlement resolves allegations that, from February 2021 through September 2022, APSF knowingly submitted false or fraudulent applications for subsidized ACA plans on behalf of thousands of consumers in order to obtain commissions and bonus payments from insurers. APSF contracted with "street marketers" who targeted homeless shelters, bus stops, drug treatment clinics and similar locations. The marketers offered incentives, such as cash or gift cards, to individuals to enroll in subsidized ACA plans or to provide their personal information so that APSF could submit applications on their behalf. APSF employees then submitted applications falsely representing that the consumers would make a minimum income amount just over the federal poverty line in order to cause the government to pay the highest subsidy amount.

APSF employees also knowingly submitted false information to Florida's Medicaid program in order to generate letters stating that the applicant was denied Medicaid coverage and then used these letters as a qualifying event to trigger a Special Enrollment Period, which allowed APSF to submit applications for ACA plans outside of the normal enrollment periods. APSF employees also evaded the federal government's attempts to verify information in consumers' ACA applications by submitting false information in response to inquiries from the Centers for Medicare and Medicaid Services when it sought to verify the false information (including income information) submitted by APSF. Some consumers experienced disruptions in their medical care as a result of being enrolled by APSF in subsidized ACA plans that did not provide coverage for their medical needs. APSF received commissions, bonuses, and/or other payments for consumers it enrolled in ACA plans, and a significant portion of APSF's revenues from these fraudulently obtained payments flowed up to its then-parent corporation, AssuredPartners.

The settlement resolves allegations originally brought in a lawsuit filed by a whistleblower under the qui tam provisions of the False Claims Act, which allow private parties to bring suit on behalf of the government and to share in any recovery. The whistleblower will receive $24.3 million as their share of the recovery in this case.

The claims resolved by the civil settlement are allegations only and there has been no determination of liability in the civil settlement.

California Man Pleads Guilty to Orchestrating $270M Medication Reimbursement Fraud Scheme

A California man pleaded guilty yesterday to submitting nearly $270 million in fraudulent claims over an 11-month span to California's Medicaid program (Medi-Cal) for expensive prescription drugs that were medically unnecessary and, in many instances, not provided to the purported recipients.

According to court documents, Paul Randall, 66, of Orange, along with pharmacist and pharmacy owner Kyrollos Mekail, 37, of Moreno Valley, and nurse practitioner Patricia Anderson, 58, of West Hills, exploited Medi-Cal's suspension of its requirement that health care providers obtain prior authorization before providing certain medications at the beginning of 2022. Medi-Cal temporarily suspended the requirement as part of a transition to a new payment system. Using a business called Monte Vista Pharmacy, which Mekail owned, Randall and his co-schemers billed Medi-Cal tens of millions of dollars per month for purportedly dispensing high-reimbursement drugs containing cheap, generic ingredients that were manufactured in unique dosages, combinations or package quantities and were not included in the applicable maximum price lists that cap Medi-Cal reimbursements.

In furtherance of the scheme, Randall paid illegal kickbacks to patient marketers in exchange for Medi-Cal beneficiary information and thereafter paid illegal kickbacks to Anderson to sign pre-filled prescriptions for 19 high-reimbursement, non-contracted, generic drugs. Anderson never met the patients, reviewed their medical records or otherwise determined that the medications were medically necessary before signing the prescriptions. The medications, which included pain creams and Folite tablets, a vitamin available over the counter, were billed for thousands of dollars each, including approximately $13,424 for one prescription of meloxicam 5 mg, a generic drug that typically costs between $5 and $25 for a 30-day supply in larger dosages.

Randall received a portion of Monte Vista's reimbursements from Medi-Cal, at times equaling approximately 40% of Monte Vista's profit from the false and fraudulent claims. Randall admitted in his plea agreement that he caused at least $269,120,829 in false and fraudulent claims to Medi-Cal from May 2022 to April 2023, of which Medi-Cal paid at least approximately $178,746,556. Randall also admitted that he committed the offense while on release in another criminal case.

Randall and others laundered their illicit proceeds by transferring the money to a third party to pay kickbacks to Anderson in an attempt to conceal the crime from law enforcement.

In his plea agreement, Randall agreed to forfeit property obtained from the fraud, including bank account balances exceeding $17 million, three vehicles, seven real properties, and sports memorabilia. To date, the government has seized approximately $126.5 million in assets that Randall and his co-schemers accumulated from the scheme, including $111 million in bank funds and securities, nine luxury vehicles totaling approximately $1 million, nine luxury real properties totaling approximately $13.5 million, and more than $1 million worth of sports memorabilia.

Randall pleaded guilty to one count of wire fraud. He faces a maximum penalty of 30 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Relatedly, in August 2024, Mekail pleaded guilty to two counts of health care fraud and awaits sentencing. In April 2025, Anderson pleaded guilty to two counts of health care fraud and also awaits sentencing.

The FBI, HHS-OIG, and the California Department of Justice are investigating the case.

Business Owner Sentenced to Over Four Years in Prison for $100M COVID-19 Tax Credit Scheme

A Nevada woman was sentenced yesterday to 54 months in prison and three years of supervised release for conspiring to defraud the United States by fraudulently claiming nearly $100 million in COVID-19 related employment tax credits.

According to court documents and statements made in court, Candies Goode-McCoy, formerly of Las Vegas, conspired with others to file tax returns seeking fraudulent refunds based on the employee retention credit and paid sick and family leave credit, credits which Congress created to aid struggling businesses during the COVID-19 global pandemic. From approximately June 2022 through September 2023, McCoy filed more than 1,200 tax returns for her own businesses and those of others, which falsely claimed these credits and sought refunds totaling more than $98 million.

In total, the IRS paid out approximately $33 million as a result of the scheme. Personally, Goode-McCoy received over $1.3 million in fraudulent refunds. She also received approximately $800,000 from clients for filing fraudulent returns. McCoy used the proceeds to pay for vacations, luxury cars and other luxury goods, and to gamble at casinos.

Goode-McCoy pleaded guilty to one count of conspiracy to defraud the government with respect to claims. In addition to the term of imprisonment, McCoy was ordered to pay the IRS $26,022,188 in restitution.

IRS Criminal Investigation and the Treasury Inspector General for Tax Administration investigated the case.