Man admits guilt in fraud case involving sober living facility.
Santa Ana Man Pleads Guilty in Multi-Million Dollar Kickback Scheme
A 33-year-old man from Temecula, James Frageau, has pleaded guilty to his involvement in an alleged multi-million dollar kickback scheme. The scheme revolved around a sober-living facility in Orange County. According to court records obtained on Sept. 18, Frageau is expected to be sentenced to two years in prison next year.
Frageau pleaded guilty on Sept. 13 to a felony count of making a fraudulent claim for a health benefit. As part of his plea deal, multiple other felonies and sentencing enhancements were dismissed. However, he will still be ordered to pay $11.7 million in restitution.
The sentencing is scheduled for March 13, and Frageau is expected to receive a two-year prison term. This case highlights the serious consequences of participating in fraudulent schemes.
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Frageau’s co-defendants, Steven Lomonaco, Mahyar “Christian” Mohases, Nocholas Reeves, and Robert Williams, are still awaiting trial on multiple charges related to insurance fraud and money laundering.
According to Lomonaco’s attorney, Jack Earley, his client was involved in civil litigation, which has since been settled. Earley claims that the payments made were referral fees, a common practice in the industry.
Prosecutors allege that Mohases, Frageau, Williams, and Reeves recruited patients with addictions from across the country to stay at Casa Bella International Inc., owned by Lomonaco. Lomonaco allegedly paid up to $10,000 per patient who stayed at the sober living facility for more than a month.
Orange County District Attorney Todd Spitzer accuses the defendants of preying on vulnerable individuals and exploiting their addictions for profit. He emphasizes the importance of cracking down on such criminals to protect substance abuse patients and their loved ones.
The prosecutors also claim that the defendants used a nonprofit organization to launder money for insurance premiums.
What agencies were involved in the investigation of the kickback scheme at the sober-living facility in Orange County?
Uled for Jan. 12, 2022, in the Ronald Reagan Federal Building and Courthouse in Santa Ana. The case has been under investigation by the Federal Bureau of Investigation (FBI), the California Department of Justice, and the Orange County District Attorney’s Office.
The kickback scheme, which allegedly occurred between 2014 and 2018, involved Frageau conspiring with others to defraud insurance companies by submitting fraudulent claims for services that were not provided. The scheme primarily targeted addiction treatment services provided by the sober-living facility in Orange County.
According to court documents, Frageau and his co-conspirators operated a network of shell companies that were used to launder money and hide the kickbacks. The fraudulent claims for services submitted to insurance companies amounted to millions of dollars. The kickbacks were then shared among Frageau and his co-conspirators.
The investigation into the scheme began in 2017 when an insurance company detected suspicious billing practices from the sober-living facility. The subsequent probe uncovered a complex web of fraudulent activities involving multiple individuals and entities.
Frageau’s guilty plea is a significant milestone in the ongoing investigation. It showcases the commitment of law enforcement agencies to protect the integrity of the healthcare system and hold individuals accountable for their involvement in fraudulent schemes. The restitution order of $11.7 million also highlights the severity of the financial impact caused by the kickback scheme.
The case serves as a reminder of the importance of maintaining transparency and ethical practices in the healthcare industry. Fraudulent activities, such as kickback schemes, not only undermine the trust between healthcare professionals and patients but also contribute to rising healthcare costs for everyone involved.
The Santa Ana man’s guilty plea demonstrates the cooperation between federal and state agencies in combating healthcare fraud. It also serves as a warning to others who may be tempted to engage in similar criminal activities. The Department of Justice is committed to prosecuting individuals involved in fraudulent schemes to the fullest extent of the law.
As the sentencing hearing approaches, the court will have the opportunity to consider the extent of the harm caused by Frageau’s actions and determine an appropriate punishment. The case serves as a reminder that healthcare fraud is a serious offense with severe consequences.
In conclusion, James Frageau’s guilty plea in the multi-million dollar kickback scheme at a sober-living facility in Orange County highlights the importance of combating healthcare fraud. It underscores the commitment of law enforcement agencies to protect the integrity of the healthcare system and holds individuals accountable for their illegal actions. The case serves as a reminder of the need for transparency and ethical practices in the healthcare industry to ensure the well-being of patients and the sustainability of the system.
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