15 sentenced in California for $40M health insurance fraud scheme

The last of 15 defendants have been sentenced in Santa Clara, Calif. for their roles in a $40 million statewide insurance scam involving "overpriced and unneeded" telehealth prescriptions and medical devices.

The individuals called themselves "The Care Group," perpetrating a scheme called C.R.E.A.M. (Cash Rules Everything Around Me), according to a Jan. 30 news release. Seven defendants were sentenced to felonies and eight to misdemeanors.

From 2015 to 2020, the defendants operated an illegal call center in Los Angeles, a durable medical device company and six pharmacies across southern California. They billed patients across the state for thousands of false prescriptions for items such as neck braces and pain creams. The pharmacies only provided prescriptions signed by physicians who received "kick-backs," and the group would bill insurers with inflated prices.

At least five payers in the state were defrauded by $40 million dollars. The defendants have paid more than $8.3 million in restitution.

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