Three Convicted Over $18.5M In Fraud For Teen Substance Abuse Treatment: The U.S. Attorney’s Office Central District of California announced on May 9, 2022 the convictions of three defendants who participated in an $18.5 million scheme that submitted fraudulent claims to California’s Drug Medi-Cal program for alcohol and drug treatment services for high school and middle school students.

The three defendants convicted by a federal jury of health care fraud charges are:

  • Gregory Hearns, 66, of Compton, the billing supervisor for ARS who compiled the monthly billing and arranged for its submission to Medi-Cal (guilty of one count and acquitted on 10 others);
  • LaLonnie Egans, 64, of Bellflower, a former manager at ARS (guilty of three counts);
  • Tina Lynn St. Julian, 58, of Inglewood, a former counselor at ARS (guilty of four counts).

All three defendants face up to 10 years in prison for each count of conviction.

The convictions of the three defendants brings the total to nineteen people convicted of federal criminal charges stemming from fraudulent bills submitted by a Long Beach company – the non-profit Atlantic Recovery Services (ARS), later called Atlantic Health Services – that provided substance use disorder treatment services to students at local high schools and middle schools through Medi-Cal and its Drug Medi-Cal program.

According to court documents and the evidence presented during the 12-day trial, the participants in the ARS scheme defrauded the Drug Medi-Cal program by submitting bills for services to students who did not medically need alcohol or drug treatment. ARS also billed Drug Medi-Cal for group and individual counseling sessions that were not provided or did not meet the requirements for reimbursement as to size, length, or setting. To support the false billings, ARS employees falsified numerous documents.

During the four-year period that ended in March 2013, ARS submitted false and fraudulent claims of just over $18.5 million, and Drug Medi-Cal paid approximately $17,635,100 on those claims.

The former president and chief executive officer of ARS – Richard Mark Ciampa, 68, of Commerce – pleaded guilty last year and was sentenced in September 2021 to seven years in federal prison. (In March 2009, Drug Medi-Cal ordered ARS to repay an overpayment, which caused a significant amount of financial pressure on Ciampa and ARS. Ciampa, in turn, passed along this financial pressure to his employees and threatened the employees that they would lose their jobs with ARS or have their hours reduced to part-time if they did not generate significant billings. In response to Ciampa’s threats, ARS employees generated false and fraudulent claims for submission to Drug Medi-Cal.)

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If you have information regarding false claims having been submitted to Medicare, Medicaid, TRICARE, other federal health care programs, or to other federal agencies/programs, and the information is not publicly known and no actions have been taken by the government with regard to recovering the false claims, you should promptly consult with a False Claims Act attorney (also known as qui tam attorneys) in your U.S. state who may investigate the basis of your False Claims Act allegations and who may also assist you in bringing a qui tam lawsuit on behalf of the United States, if appropriate, for which you may be entitled to receive a portion of the recovery received by the U.S. government.

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