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Five More Charged with Running Insurance Fraud Scheme

June 24, 2020

Four men from California and one from Maryland have been accused of participating in a scheme to lure individuals seeking addiction treatment with promises of free care and then fraudulently signing them up for private insurance, according to an Orange County Register report. The scheme is believed to have netted $60 million in billings and $11.7 million in insurance payouts.

The following individuals face felony charges of insurance fraud, money laundering and conspiracy:

  • Jeremy Ryan, 42, Orange, California
  • Daniel Reaman, 41, Mt. Rainier, Maryland
  • Richard Roberts, 61, Stockton, California
  • Reiner Nusbaum, 54, San Clemente, California
  • Michael Castanon, 56, San Juan Capistrano

The five men are suspected of running a plot similar to one that led to charges against another five individuals in California in January. Individuals seeking treatment were brought to California, where they were trafficked to one of 19 treatment centers. They were signed up for private plans through the insurer Health Net using the address of California residents who were paid $300 per fraudulent application. The conspirators are accused of then paying the health insurance premiums by using not-for-profits.

According to the OC Register, the operation involved 441 patients, and once their insurance benefits were maxed out, the individuals were given illicit substances so that they could fail a drug screening and start a new billing cycle.

“This horrifying case illustrates the lengths that rogue rehab operators and sober living home fraudsters will go to turn a buck — trafficking, multimillion-dollar fraud schemes, exploiting patients in recovery who desperately need help, and leaving a trail of human wreckage in their wake,” California Assemblywoman Cottie Petrie-Norris, D-Laguna Beach, said in an email to the OC Register.

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