Former Employee of Defunct Long Beach Company Pleads Guilty to Helping Defraud Taxpayers Out of $45M

A Los Angeles woman pleaded guilty Friday for her role in a fraud scheme perpetrated by a Long Beach-based company she worked for that exploited at-risk children and defrauded taxpayers out of more than $45 million in bogus billings submitted to a state program for substance abuse treatment services.

Carrenda Jeffery, 65, entered her plea to a federal health care fraud charge before U.S. District Judge Philip Gutierrez, who scheduled a sentencing hearing on Oct. 3. The charge against Jeffrey carries a maximum penalty of 10 years behind bars.

Authorities said Jeffery worked at the Long Beach-based Atlantic Health Services, formerly known as Atlantic Recovery Services (ARS). At ARS Jeffery managed counselors at three charter schools that were operated by Soledad Enrichment Action, a nonprofit, according to federal prosecutors.

Prosecutors said ARS was designed to exploit at-risk youth and defraud taxpayers, with Jeffery and other supervisors telling staffers to forge student signatures, falsify treatment records and enroll students who had no need for services.

The now-defunct ARS received more than $45 million from the state’s Drug Medi-Cal program after phony claims for group and individual substance counseling services were submitted during a 10-year period, according to a 40-count indictment returned in September by a Los Angeles federal grand jury against Jeffery and seven co-defendants.

In April 2013 the company shut down, when the state suspended payments to the enterprise.

The claims submitted to the Drug Medi-Cal program were false in part because ARS billed for services provided to students who did not have substance abuse disorders or addictions and therefore did not qualify to receive the services, according to the indictment.

Palmdale resident Angela Frances Micklo, who managed counselors at nine schools in Los Angeles County, previously pleaded guilty to health care fraud and will be sentenced in November.

Pico Rivera woman Maribel Navarro, who managed counselors at 10 schools in Los Angeles County, is set to enter a guilty plea in the case on Monday.

Lakewood resident Lori Renee Miller, who worked as an ARS program manager, and four others face trial before Gutierrez in August.

City News Service contributed to this report. 

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Stephanie Rivera is the community engagement editor for the Long Beach Post. After graduating from CSULB with a degree in journalism, Stephanie worked for Patch Latino and City News Service before coming to the Long Beach Post in 2015.