Dept. of Justice Indicts Eight for Fraud Scheme Involving Nearly $50 Million in False Claims for Student Substance Abuse Counseling in Long Beach

Eight people have been indicted for allegedly falsely billing a California state program for alcohol and drug treatment services that, in many cases, weren’t provided to high school and middle school students in Long Beach, the Department of Justice announced today.

The release states that the eight defendants are former employees of the Long Beach-based Atlantic Health Services (formerly Atlantic Recovery Services, or ARS), and six of those indicted were arrested this morning by federal authorities. Their arrests come after a dozen other former ARS employees pleaded guilty previously, and their sentences are pending.

“The defendants named in the indictment are accused of exploiting a program that was set up to help a particularly vulnerable population—young people who are confronting drug and alcohol abuse,” said United States Attorney Eileen M. Decker in a statement. “According to the indictment, ARS and its employees engaged in a long-running fraud scheme to steal tens of millions of dollars from a program with limited resources that was designed to help underprivileged youth in recovery. In the process, the defendants and ARS branded many innocent young people as substance abusers and addicts in order to boost enrollment numbers and billings.”

The indictment alleges ARS billed $46 million to California’s Drug Medi-Cal program to provide substance abuse services to schools throughout Los Angeles County over the course of a decade. The defendants are charged with making false and fraudulent claims, specifically committing aggravated identity theft and health care fraud.

The 40-count indictment that prompted the arrests was ruled by a federal grand jury on August 26 and unsealed this morning. Each defendant potentially faces decades in prison, if convicted. ARS folded in 2013, when the state discontinued payments to the company.

The individuals named in the indictment are:

  • Lori Renee Miller, 54, of Lakewood, the program manager at ARS who supervised substance abuse recovery managers and counselors.
  • Nguyet Galaz, 41, of Montclair, who oversaw services provided at approximately 11 schools in Los Ang eles County.
  • Angela Frances Micklo, 56, of Palmdale, who managed counselors at approximately nine schools in Los Angeles County, including several in the Antelope Valley.
  • Maribel Navarro, 48, of Pico Rivera, who managed counselors at approximately 10 schools in Los Angeles County.
  • Carrenda Jeffery, 64, of the Mid-City District of Los Angeles, who managed counselors at approximately three schools.
  • LaLonnie Egans, 57, of Bellflower, who managed counselors at three schools.
  • Tina Lynn St. Julian, 51, of Compton, who worked as a counselor at two schools.
  • Shyrie Womack, 33, Egans’ daughter, also of Bellflower, who worked as a counselor at three schools.

According to the release, Micklo and Galaz have yet to be arrested and are expected to self-surrender “without incident” in the coming weeks.

The indictment alleges the company committed the following crimes:

  • ARS billed for services provided to students who did not have substance abuse disorders or addictions and therefore did not qualify to receive Drug Medi-Cal services.
  • ARS billed for counseling sessions that were not conducted at all.
  • ARS billed for counseling services that were not conducted in accordance with Drug Medi-Cal regulations regarding length, number of students, content and setting.
  • ARS personnel falsified documents, including treatment plans, group counseling sign-in sheets, progress notes and update logs (which listed the dates and times of counseling sessions). 
  • ARS personnel forged student signatures on documents.

“For counselors and supervisors to risk stigmatizing students as substance abusers, as alleged in this case, just to enrich themselves at taxpayer expense is outrageous,” said Special Agent in Charge Christian Schrank, U.S. Department of Health and Human Services, Office of the Inspector General in a statement. “This decade-long conspiracy to defraud Medi-Cal while disregarding the true health care needs of children will not be tolerated.”

The indictment of the 20 total defendants (including the dozen who previously pled guilty) is the result of investigations by the U.S. Department of Health and Human Services, Office of Inspector General; the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse and IRS - Criminal Investigation.



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