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Ex-CEO of Long Beach addiction rehab, 3 others arrested for $50M medical fraud

Published On: 07-21-2016 in Category: Substance Abuse


A former CEO of a substance abuse treatment center in Long Beach and three of his ex-colleagues were arrested recently on charge of their involvement in a $50 million scam in California’s Drug Medi-Cal program.

The former top executive, Richard Ciampa (62), was arrested along with Gregory Hearns (60) of Long Beach, LaLonnie Egans (58) of Bellflower and Tina Julian (52) of Compton in July 2016 for allegedly providing forged insurance bills worth $50 million for unnecessary treatments or for treatments that were not even provided in the now non-operational Atlantic Health Services, previously known as Atlantic Recovery Services (ARS).

Hearns worked in ARS as a billing supervisor, Egans supervised ARS counselors at three schools and Julian worked as a counselor at two ARS schools. Ciampa was sentenced up to 194 years in prison, while Hearns, Egans and Jullian were given up to 134, 32 and 42 years in prison respectively. All the accused have been charged with healthcare fraud and serious identity theft, while Ciampa has been accused of money laundering as well.

Apart from the four accused, nearly 17 people have also pleaded guilty in the case and have signed plea agreements, according to investigating officers.

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

Forged bills submitted to California’s Drug Medi-Cal program

According to the U.S. Attorney’s office, Ciampa and his team had submitted fake bills worth $50 million to the California’s Drug Medi-Cal program for treatment services provided to students of middle and high schools belonging to areas of Lakewood, Bell Gardens, Montebello and the Antelope Valley. They also produced fake bills pertaining to treatments not provided at all to these students or services provided to students who did not have any problems relating to substance abuse.

The court indictment also says that Ciampa and his allies had pressured the counselors and managers to forge bills in a “creative” manner so that they did not get caught and also told them that “they had to make it happen” to keep their jobs safe.

Acting special agent in-charge for IRS criminal investigation Anthony J. Orlando said that healthcare professionals who misused the Medi-Cal program for monetary benefits have got a clear signal from the arrests made. He added that healthcare fraud is a federal crime, and hence, will not be tolerated and serious penalties will be levied on those who commit such crimes. He also said that healthcare professionals who are involved in such frauds undermine taxpayer programs, increasing the costs for genuine people who seek treatment.

Seek legitimate rehabs for substance abuse treatment

It is important to seek treatment for addiction through legitimate services, from the health care providers who are authentic and trustworthy. For that a thorough background check before enrolling someone in any substance abuse program is mandatory. Moreover, schools should also be vigilant while appointing substance abuse treatment providers to counsel their students.

The Long Beach Drug Treatment and Rehab Center helps patients receive authentic substance abuse treatment and lead an addiction-free life. You may chat online with our certified treatment specialists or call at our 24/7 helpline number 562-846-1995 for more information about reliable recovery programs.


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