Los Angeles Crew Sentenced in $40M Medical Scam, Record $8.3M Restitution Ordered

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In a landmark legal development, the Santa Clara County Superior Court has handed down sentences to the last remaining members of a 15-person crew responsible for orchestrating a massive $40 million medical insurance scam in California. Known as “The Care Group,” this group of individuals, predominantly from Los Angeles, exploited human suffering by engaging in a sophisticated scheme that involved selling unnecessary and overpriced prescriptions and medical equipment to unsuspecting California residents.

The convictions, ranging from felonies to misdemeanors, mark the culmination of a multi-year investigation that exposed the intricate web of deception woven by “The Care Group.” The individuals behind the scam operated with impunity from 2015 to 2020, leveraging their ill-gotten gains from their opulent Beverly Hills offices. At the heart of the operation were two key entities: Global Marketing, a telemarketing company, and California General DME, a durable medical device company, supported by a network of pharmacies.

District Attorney Jeff Rosen did not mince words when describing the group’s tactics, stating, “This group used people’s pain and illnesses to criminally enrich themselves.” The perpetrators, shielded by shell corporations and figurehead owners, believed they were beyond the reach of the law. However, the sentencing affirms that justice has prevailed.

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The scam orchestrated by “The Care Group” involved the mass prescription of unnecessary and expensive medical items, including neck braces and specially formulated pain creams. These items were often billed to insurers at exorbitant rates, reaching up to $4,000, despite their actual cost being a fraction of that amount. The group also engaged in a deceptive practice of creating non-existent partnerships with entities like the “Physician’s Network” or “Doctor’s Network” to add a veneer of legitimacy to their operations.

The telemarketers employed by the scam artists played a pivotal role in perpetuating the fraud, fabricating connections with fictitious entities and preying on unsuspecting individuals. The prescribing doctors involved were often mere names on paper, with no genuine interaction with the supposed “patients” they were purportedly treating.

The financial toll of “The Care Group’s” elaborate scheme was staggering, extracting approximately $40 million from insurance companies across California. Santa Clara County alone faced a significant hit of $2.3 million. As a response to this large-scale financial impact, the court-ordered restitution surpasses $8.3 million, setting a record for the Santa Clara County’s District Attorney’s Office in terms of single restitution recovery in an insurance fraud case.

The success of bringing “The Care Group” to justice was the result of an exhaustive and impressive multi-year investigation conducted by the District Attorney’s Office Bureau of Investigation. The task force, known by the acronym C.R.E.A.M. (Cash Rules Everything Around Me), collaborated seamlessly with the California Department of Insurance, the California State Board of Pharmacy, and various district attorneys’ offices across the state. This collaborative effort underscored the importance of pooling resources and expertise to dismantle deep-seated criminal enterprises.

The sentencing of the final members of “The Care Group” not only signifies a significant victory for law enforcement and the justice system but also serves as a deterrent against future fraudulent schemes. The case highlights the need for vigilance and collaboration among regulatory bodies to combat sophisticated white-collar crimes that exploit vulnerable individuals and undermine the integrity of insurance systems.

As the legal chapter concludes for “The Care Group,” the broader implications of this landmark bust reverberate in the realms of insurance fraud prevention and criminal prosecution. The case stands as a testament to the resilience of investigative agencies and their commitment to upholding justice in the face of complex and audacious criminal enterprises.

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