Ex-CEO of defunct Long Beach substance abuse center indicted for $50M fraud scheme

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Four people were charged in a superseding indictment for allegedly participating in a scheme that submitted nearly $50 million in fraudulent claims to California's Drug Medi-Cal program, according to the Department of Justice.

Two of the defendants worked for the now-defunct Long Beach, Calif.-based Atlantic Health Services, including former President and CEO Richard Mark Ciampa and an associate.

The superseding indictment charges the defendants with healthcare fraud and aggravated identity theft. It also charges Mr. Ciampa with money laundering.

DOJ officials allege that Atlantic Health Services was paid more than $46 million after it submitted false and fraudulent claims to the Medi-Cal program for group and individual substance abuse counseling services during a 10-year period through April 2013.

The indictment also alleges Atlantic Health billed for services provided to students who did not have substance abuse issues and did not qualify for Medi-Cal, billed for counseling sessions that had not been conducted and falsified documents and forged student signatures on documents, among other allegations.

If convicted, Mr. Ciampa faces a maximum sentence of 194 years in federal prison. The three other defendants face anywhere from 32 to 134 years in prison.

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