Fake Farmington Addresses Used in $27M Obamacare Fraud Scam: Feds

HARTFORD, CT — A father and son from California entered guilty pleas in Hartford federal court Friday in a multi-state Obamacare fraud case, prosecutors said. Four localities in Connecticut were involved, including Farmington, federal officials said.

Jeffrey White, 60, and Nicholas White, 33, pleaded guilty to conspiring to defraud Affordable Care Act programs in at least 12 states of more than $27 million, prosecutors said.

U.S. Attorney John H. Durham of the District of Connecticut, Special Agent in Charge Phillip Coyne of the Boston Regional Office of the Office of the Inspector General of the Department of Health and Human Services, Special Agent in Charge Brian C. Turner of the FBI’s New Haven Division, Special Agent in Charge Kristina O’Connell of Internal Revenue Service Criminal Investigation in New England, and Inspector in Charge Joseph W. Cronin of the Boston Division of the U.S. Postal Inspection Service made the joint announcement.

According to court documents and statements made in court, Jeffrey White and his son, Nicholas White, conspired to defraud health care plans operating under the Affordable Care Act, commonly referred to as “Obamacare,” in Connecticut and other states by fraudulently enrolling individuals in ACA plans in states where the individuals did not live.

In order to "further the conspiracy," the Whites created phony residential leases using fictitious landlords in various states, including locations in Danbury, Farmington, Hartford and Norwalk in Connecticut, prosecutors said.

The Whites also used online applications to obtain false cell phone numbers for the individuals with area codes that made it appear that the individuals lived at the fictitious addresses, and provided the false cell phone numbers to the ACA plans.

If anyone at the ACA plan called the false local number, the call would ring through to a phone controlled by the Whites.

In order to enroll the individuals in an ACA plan, the Whites paid the insurance premiums for the individuals, and also paid to have the individuals transported to California where the individuals were placed in expensive residential substance abuse treatment programs, prosecutors said. The treatment programs then billed the ACA plans for thousands of dollars of treatment each week, including claims for expensive laboratory tests such as blood or urine toxicology screenings, procesutors said.

The treatment programs paid the Whites thousands of dollars for each referral, and some programs arranged for the Whites to receive a percentage of the money the treatment programs received from the ACA health insurance plans, according to prosecutors. In order to maximize their proceeds from the fraud scheme, the Whites enrolled the individuals in ACA plans in states that paid the highest amount for substance abuse treatment, even though the individuals did not live in those states, prosecutors said.

In pleading guilty, the Whites admitted that their scheme resulted in more than $27 million in losses to ACA plans across the country, including plans in Connecticut, Arizona, California, Delaware, Indiana, Kentucky, New Jersey, Ohio, Oregon, Pennsylvania, Tennessee, and Texas.

“This case is believed to be the first of its kind involving fraudulent enrollment of individuals in ACA plans on a national scale,” Durham said. “Health care fraud on ACA plans results in higher insurance premiums for residents in the affected state who are seeking health insurance. We greatly appreciate the outstanding work by the federal law enforcement agencies in identifying and investigating this fraud scheme that cost insurers more than $27 million. This investigation is ongoing.”

Added O’Connell of the IRS, “Schemes of this magnitude ultimately hurt the taxpaying citizens who suffer from higher insurance premiums and reduced patient services. IRS will continue to lend our financial expertise to identify and prosecute those offenders who corrupt our health care system.”

Jeffrey White and Nicolas White each pleaded guilty to one count of conspiracy to commit health care fraud, an offense that carries a maximum term of imprisonment of 10 years.

U.S. District Judge Alvin W. Thompson scheduled sentencing for Jan. 4, 2019. The Whites are released on bond pending sentencing.

Photo Credit: Shutterstock

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