Prosecutors charge 18 Miami residents in connection with $125 million scheme

South Florida prosecutors busted an intricate, 18-person healthcare insurance fraud ring that used more than 30 different companies to submit $125 million in false claims to various private insurers, according to a release from the U.S. Attorney's Office in the Southern District of Florida.

Fourteen of the 18 co-conspirators were arrested Wednesday, March 11; the other four remain at large. The individuals are charged with defrauding a slew of privately insured healthcare plans, including Cigna, Blue Cross Blue Shield (BCBS) and UnitedHealth.

Prosecutors allege that Reynaldo Castillo, Hendris Castillo Morales, Lisbet Castillo Batista and Maite Garcia owned 30 different companies throughout Southern Florida, ranging from medical director staffing companies to medical clinics. The group submitted false claims to private insurance plans through these companies by obtaining names and licensing information for physicians. Numerous others allegedly agreed to set up companies and bank accounts under their names in order to deposit checks from Cigna, BCBS and UnitedHealth.

Claims submitted through these companies totaled more than $125 million; the insurance companies paid out nearly $14 million of that. The group used that money to purchase real estate under the company Investors Group of Florida Corp., of which Reynaldo Castillo was listed as the president.

The indictment included a number of the other high profile companies, incluing Pepsi Co., BJ's Wholesale Club Inc., Macy's Inc., RadioShack Corp. and Miami-Dade County Public Schools. All were self-insured employers offered administrative services only plans, which reimbursed Cigna, BCBS and UnitedHealth for any health benefits paid by the insurance companies. As a result, these companies reimbursed the private insurers for false claims submitted by the fraudsters.

This case strengthens South Florida's reputation as a hotbed of fraud, particularly among Cuban-born immigrants. Legal experts have said that tighter controls will help mitigate a problem that has become endemic in the region, FierceHealthPayer: AntiFraud previously reported--so much so that prosecutors have often described it as a constant game of Whac-A-Mole.

For more:
- here's the U.S. Attorney's statement

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