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Posted by Fay Arfa | Oct 12, 2018 | 0 Comments

Jeffrey White, 60, and Nicholas White, 33, both of Twin Peaks, California, pleaded guilty today in Hartford federal court to conspiring to defraud Affordable Care Act programs in at least 12 states of more than $27 million.

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 IRS 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 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 (“ACA,” 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, Connecticut.  The Whites also used an online application 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.  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.

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.  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.

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,” said U.S. Attorney Durham.  “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.”

“The ACA was implemented to expand health insurance coverage, not to line the pockets of crooks,” said HHS-OIG Special Agent in Charge Coyne.  “Healthcare fraud affects all Americans and we will continue working with our law enforcement partners to rid the system of fraud, waste and abuse.”

“The Whites conspired to defraud the Affordable Care Act, a program created to provide essential health care services to our nation's uninsured,” said FBI Special Agent in Charge Turner.  “The Whites exploited both the opioid epidemic and the ACA by enrolling people with serious drug addictions into insurance programs for the sole purpose of enriching themselves and so-called rehabilitation centers.  The ACA was not enacted to fill the coffers of greedy health care professionals.  The FBI is fully committed to investigating health care fraud in both government and private health insurance programs alike, and to bringing to justice those who commit such fraud.”

“Health care fraud is not a victimless crime,” said IRS Criminal Investigation Special Agent in Charge O'Connell.  “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.”

“The U.S. Postal Inspection Service continuously seeks to identify and stop complex fraud schemes,” said Postal Inspector in Charge Cronin.  “By circumventing the processes that are in place, the Whites created substantial losses to Affordable Care Act programs in multiple states.  We will continue our work with our law enforcement partners to stop those who are engaged in these types of fraudulent activities.”

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 January 4, 2019.  The Whites are released on bond pending sentencing.

About the Author

Fay Arfa

Fay Arfa has the distinction of being Certified as a Specialist in two separate areas of law – Criminal Law as well as Appellate Law – by the California State Bar, Board of Specialization. The National Board of Trial Advocacy has also awarded her a board Certification in Criminal Trial Advocacy. ...


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