Florida Insurance Scam Leads to $1.6 Million Restitution and Incarceration
PORT ST. LUCIE, FL – The U.S. District Court for the Southern District of Florida has sentenced a Port St. Lucie resident to serve 161 months of imprisonment, followed by an additional three years of supervised release, and to make $1,665,348 in restitution for violating federal criminal statutes pertaining to plans covered by the Employee Retirement Income Security Act.
Miguel de Paula Arias previously pleaded guilty to three counts of a 28-count superseding indictment. The counts charged Arias with healthcare fraud, making false statements relating to healthcare matters, and aggravated identity theft.
An investigator with the U.S. Department of Labor’s Employee Benefits Security Administration (EBSA), working with the FBI and the U.S. Department of Health and Human Services, found Arias registered a fictitious company, HPA Trust, with the State of Florida Division of Corporations in 2013. This allowed HPA Trust to become the registered agent for Life Extensions Medical Group LLC, another company created by Arias. The case was prosecuted by the West Palm Beach Office of the U.S. Department of Justice, Southern District of Florida.
Between 2011 and 2016, Arias submitted and caused submissions of fraudulent Medicare and healthcare claims for services and procedures purportedly provided by four physicians, totaling $4,270,332, of which approximately $1,686,176 was paid.
“Fraudulent transactions like these have a severe impact on companies and individuals,” said Employee Benefits Security Administration Regional Director Isabel Colon, in Atlanta. “The actions can cause irreparable damages to the healthcare market and may cause rates to rise for individuals, placing significant stress on their ability to meet everyday expenses.”
Additionally, Arias used identifying information of the four physicians to create false means of identification, allowing him to appear to be the physicians. Arias used the identification to open pre-paid debit card accounts, traditional bank accounts, and mail boxes in the names of the physicians.
He then submitted Medicare enrollment applications and used this information to hijack an existing provider number within a physician’s Medicare profile. By doing so, Arias enabled himself to change the physician’s electronic funds transfer information to the mail boxes and accounts he created and controlled.
Arias also purchased and subscribed to the Social Security Administration’s death master file to obtain information on recently deceased individuals, which allowed him to prepare false claims for medical services rendered by the affected physicians to these individuals by backdating the date of services prior to their death. He later contracted with online medical billing services to transmit the false claims, causing Medicare and other private insurers to make substantial payments for the fraudulent claims by depositing the funds electronically into bank accounts he controlled.
Arias diverted proceeds of the fraud for his personal use and benefit, including the purchase of gold coins, which he later sold.
Employers and workers can reach EBSA toll-free at 866-444-3272 for help with problems related to private sector retirement and health plans. Additional information can be found at http://www.dol.gov/ebsa.