Ex-CEO of Defunct Long Beach Substance Abuse Treatment Provider Indicted for $50M Health Care Fraud Sheme

The president and CEO of a Long Beach-based substance abuse treatment provider was arrested Friday morning for allegedly stealing millions in a medical insurance fraud scheme, following the indictments and guilty pleadings of numerous employees associated with his business in the past few months, the U.S. Attorney’s Office announced.

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Long Beach resident Richard Mark Ciampa, 62, was indicted along with three other employees of Atlantic Health Services (formerly known as Atlantic Recovery Services) which is now defunct, including Gregory Hearns, 60, of Long Beach, LaLonnie Egans, 58, of Bellflower, and Tina Lynn St. Julian, 52, of Compton.

The indictment alleges they participated in a scheme “that submitted more than $50 million in fraudulent claims to California’s Drug Medi-Cal program for alcohol and drug treatment services for high school and middle school students that, in many instances, were not provided at all or were provided to students who did not actually have substance abuse problems,” according to a release from the U.S. Attorney’s Office.

Officials said Ciampa was ultimately responsible for the claims billed to Medi-Cal and received the bulk of ARS’ earnings. Hearns worked as ARS’s billing supervisor and compiled the monthly billing and arranged for its submission to Medi-Cal. Egans managed counselors at three schools and St. Julian worked as a counselor at two schools.

“These defendants stole tens of millions of dollars earmarked for helping children with substance abuse problems,” U.S. Attorney Eileen M. Decker stated. “This fraud not only harmed taxpayers, but also placed some of the most vulnerable in our society at greater risk.”

The defendants are charged with health care fraud and aggravated identity theft. The indictment also charges Ciampa with money laundering and alleges that ARS was paid more than $46 million after it submitted false and fraudulent claims for group and individual substance abuse counseling services, officials stated.

The indictment supersedes previously unsealed indictments, officials stated. Egans and St. Julian were both named in previous indictments in September 2015 and both are expected to be arraigned on the superseding indictment in the next few weeks, officials stated.


Ciampa and Hearns were arraigned on the superseding indictment in the U.S. District Court Friday afternoon.

“Medical professionals who seek to enrich themselves through Medi-Cal fraud undermine this taxpayer-funded program and drive up health care costs for everyone,” stated Acting Special Agent in Charge Anthony J. Orlando for IRS Criminal Investigation. “[Friday’s] arrests should send a clear message to all health care providers that health care fraud is a federal crime that carries serious consequences and will not be tolerated.”

Officials said ARS received contracts to provide abuse treatment services through the Drug Medi-Cal program to Los Angeles County students in public schools in Montebello, Bell Gardens, Lakewood and the Antelope Valley. The schools would be operated by Soledad Enrichment Action.

For 10 years, until April 2013 when ARS stopped receiving payments, the company allegedly submitted bogus claims for payment to the Drug Medi-Cal program.

Ciampa and Hearns allegedly caused the submission of these false claims and “created an environment for rampant fraud by constantly warning ARS managers and counselors that they would lose their jobs if they did not increase the billing,” the release stated. The release further elaborated, stated that “Ciampa also directed managers and counselors to bill for two crisis intervention sessions per student per month, even though crisis interventions were to be billed only if the student had relapsed or faced an imminent threat of relapse, neither of which could be planned in advance."

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.

Officials said Ciampa allegedly, either on his own or through others, conducted six transactions involving ARS reimbursements received from Medi-Cal for the company’s fraudulent claims.

“These transactions include intra-bank transfers and wire transfers among ARS bank accounts that Ciampa controlled; a transfer to Ciampa’s personal account; a transfer to another individual associated with ARS; and purchase of a cashier’s check for Ciampa’s down payment on two Long Beach properties,” the release stated. “The superseding indictment also includes forfeiture allegations pertaining to these Long Beach properties and other property connected to health care fraud funds and money laundering.”

At least 17 other defendants have pleaded guilty to health care fraud charges or signed plea agreements in connection to the ARS scheme, officials stated.

Those include former ARS Program Manager, Lori Renee Miller, 54, of Lakewood; former ARS managers Angela Frances Micklo, 57, of Palmdale; Maribel Navarro, 49, of Pico Rivera; Carrenda Jeffery, 65, of the Mid-City District of Los Angeles; Cathy Fernandez, 54, of Downey; Erin Hoover, 38, of Long Beach; Elizabeth Black, 51, of Long Beach; Helsa Casillas, 45, of El Sereno; and Sandra Lopez, 42, of Huntington Park; and former ARS counselors Shyrie Womack, 33, of Bellflower; Tamara Diaz, 46, of East Los Angeles; Margarita Lopez, 41, of Paramount; Irma Talavera, 27, of Paramount; Laura Vasquez, 53, of Pico Rivera; Cindy Leticia Ortiz, 30, of Norwalk; and Arthur Dominguez, 64, of Glendale.


Defendant Dr. Leland Whitson, 76, of Redondo Beach, who was the former medical/clinical director of ARS, previously pleaded guilty to making a false statement affecting a health care program, officials stated.

Ciampa faces a maximum sentence of 194 years in federal prison if convicted, officials stated. Hearns faces a maximum sentence of 134 years in federal prison and St. Julian faces a maximum sentence of 42 years in federal prison.

The case was investigated by the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse, the U.S. Department of Health and Human Services, Office of Inspector General and IRS-Criminal investigation.

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