MIAMI, FL (BocaNewsNow.com) (Source: USDOJ Media Advisory) — Three former co-owners and clinical directors of a group of purported substance abuse treatment centers and sober homes were sentenced to prison today for their roles in a conspiracy to commit health care fraud and wire fraud that resulted in an actual loss of more than $3.8 million, and through which the conspirators sought to obtain more than $21 million.
U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, and Special Agent in Charge Omar Pérez Aybar of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) made the announcement.
Ali Ahmed, 38, Hector Efrain Alvarez, 49, and Mauren Morel, 45, all of Broward and Palm Beach Counties, previously pled guilty to one count of conspiracy to commit health care fraud and wire fraud (Case No. 19cr60200). U.S. District Judge Federico A. Moreno of the Southern District of Florida sentenced Ahmed to 120 months in prison, Alvarez to 32 months in prison and Morel to 32 months in prison. In addition, the defendants were ordered to forfeit certain property and pay forfeiture money judgments, as well as to pay restitution. Specifically, Ahmed owes $4,204,336 in restitution; Alvarez owes $3,884,035; and Maurel owes $320,301 in restitution.
In recent years, South Florida has become the locus for drug and alcohol addicts seeking assistance in an effort to become and remain sober. Substance abuse treatment centers that assist such persons undergoing detoxification from an intoxicating or addictive substance are regulated under state and federal law. These substance abuse treatment centers, or detox centers, offer a continuum of care including, from most intensive to least intensive, as follows: inpatient detox, Partial Hospitalization Programs (PHP’s), Intensive Outpatient Programs (IOP’s), and Outpatient Programs (OP’s). Persons undergoing treatment on an out-patient basis, whether in PHP, IOP, or OP, typically elect to live in a “recovery residence,” also known as a “sober home” or “halfway house,” with other persons who are also in treatment and committed to a drug and alcohol-free lifestyle.
Jacob’s Well, Inc. (Jacob’s Well) was a Florida corporation, located at 7950 SW 30th Street, Suite 202, Davie, Florida. Jacob’s Well was a substance abuse treatment center licensed with the Florida Department of Children and Families that purportedly provided private insurance beneficiaries with substance abuse treatments and services.
Medi MD, LLC. (Medi MD) was a Florida corporation, located at 7950 SW 30th Street, Suite 200, Davie, Florida. Medi MD was a substance abuse treatment center licensed with the Florida Department of Children and Families that purportedly provided private insurance beneficiaries with substance abuse treatments and services.
Arnica Health was a Florida corporation, located at 7950 SW 30th Street, Suite 202, Davie, Florida. Arnica Health was a purported medical treatment center co-located with the purported substance abuse treatment centers. Together with Medi MD and Jacob’s Well, Arnica Health operated as a part of Serenity Living and was affiliated with sober homes known as Serenity Ranch.
Ali Ahmed was Treasurer of Jacob’s Well, Director of Operations for Medi MD, and co-owner of Jacob’s Well, Medi MD, and Arnica Health.
Sebastian Ahmed was the CEO and co-owner of Jacob’s Well, Medi MD, and Arnica Health.
Hector Efrain Alvarez was Clinical Director of Medi MD.
Mauren Morel was Clinical Director and co-owner of Jacob’s Well.
Medi MD, Jacob’s Well, and Arnica Health together operated as Serenity Ranch/Serenity Living.
According to court documents, from June 2016 through April 2019, Ali Ahmed, Sebastian Ahmed, and Mauren Morel, submitted and caused others to submit, via interstate wire communications, approximately $1,693,276 in claims which falsely and fraudulently represented that various health care benefits, primarily substance abuse PHP, IOP, and OP services, were medically necessary, prescribed by a doctor, and provided by Jacob’s Well to insurance beneficiaries of Aetna, BCBS, Cigna and UHC. As a result of such false and fraudulent claims, Aetna, BCBS, Cigna, and UHC made payments to the corporate bank accounts of Jacob’s Well in the approximate amount of $320,301.
Furthermore, during the same approximate time period, Ali Ahmed, Sebastian Ahmed, and Hector Efrain Alvarez submitted and caused others to submit, via interstate wire communications, approximately $21,899,439 in claims which falsely and fraudulently represented that various health care benefits, primarily substance abuse PHP, IOP, and OP services, were medically necessary, prescribed by a doctor, and provided by Medi MD to insurance beneficiaries of Aetna, BCBS, Cigna, Humana and UHC. As a result of such false and fraudulent claims, Aetna, BCBS, Cigna, Humana and UHC made payments to the corporate bank accounts of Medi MD in the approximate amount of $3,884,035.
Ali Ahmed, Sebastian Ahmed, Hector Efrain Alvarez, and Mauren Morel used the proceeds of the health care fraud for their personal use and benefit, the use and benefit of others and to further the fraud scheme.
As set forth in Court documents, the scheme involved not only financial exploitation but also sexual exploitation of vulnerable, drug-addicted patients, whom were attracted and induced to attend Serenity Ranch facilities with free flights, free housing, vapes, clothing, spa days, benzodiazepine medications, and even drugs. Indeed, the evidence showed that patients were permitted to keep using drugs, and even provided drugs – including heroin and cocaine – by conspirators such as Ali Ahmed. Ali Ahmed also engaged in sexual relationships with patients and, as a result of the destabilizing environment at the facilities, many patients did not get the treatment that they so desperately needed.
Co-defendant Sebastian Ahmed, the former CEO of Jacob’s Well, Medi MD, and Arnica, who was charged in the same indictment, has pleaded not guilty and is set for trial on February 18, 2020, before Senior U.S. District Judge James I. Cohn. He is presumed innocent of the charges.
The FBI and HHS-OIG investigated the case, with assistance from the Davie Police Department, Broward County Sheriff’s Office and U.S. Drug Enforcement Administration (DEA). Assistant U.S. Attorneys Christopher J. Clark and Lisa H. Miller are prosecuting the case, and Assistant U.S. Attorneys Nicole Grosnoff and Peter A. Laserna are handling the asset forfeiture issues related to this matter.
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