FL: South Florida ‘sober homes’ operator gets long prison term in healthcare fraud case

Miami Herald –

Overall, the Ahmed brothers’ treatment centers, Medi MD, Jacob’s Well and Amica Health, “fraudulently” filed claims with Blue Cross Blue Shield and the other private health insurers that totaled about $38 million between June 2016 and May 2019, according to trial evidence.

A former South Florida operator of “sober homes” for drug addicts was sentenced to 17 1/2 years in prison on Friday after being convicted of bilking healthcare insurers while taking advantage of patients at his chain of treatment facilities.

Sebastian Ahmed 42, of Delray Beach, was found guilty in March of leading a multimillion-dollar healthcare fraud conspiracy along with multiple counts of fraud and money laundering. The jury, which completed its deliberations just as the coronavirus was starting to surge in Florida, convicted Ahmed of 18 of 23 counts in an indictment charging him and others, including his brother. The others pleaded guilty before trial.

Since Ahmed’s case, there have been no federal trials in the Southern District of Florida because of the pandemic. Trials are scheduled to resume next April.

On Friday, U.S. District Judge James Cohn not only imprisoned Ahmed for a long time but also ordered him to pay back $4.2 million to several private healthcare insurers. His defense attorney, Joel Hirschhorn, asked the judge to sentence Ahmed to 10 years, arguing that he had already begun his punishment when he was placed in custody without a bond last January.

But prosecutors Christopher Clark and Lisa Miller sought two times as much punishment, claiming Ahmed was the head of a sober homes network that illegally pocketed millions from insurers by falsifying paperwork for claims and paying kickbacks to patients.

“As demonstrated by the trial record, of all the conspirators, no one profited more than Sebastian Ahmed, who netted more than $2.8 million in less than three years,” the U.S. Attorney’s Office said in a news release.

According to trial evidence, Ahmed lured hundreds of young adults addicted to painkillers, heroin and other drugs to live in his sober homes in several Broward communities while failing to provide them with proper treatment for substance abuse at his chain of “Serenity” clinics. Ahmed and his brother, Ali Ahmed, who pleaded guilty before trial, bilked major private insurers such as Aetna, Cigna and Blue Cross Blue Shield for the purported treatment costs at their facilities in Broward under a provision of the Affordable Care Act.

The Ahmed brothers, assisted by two clinical directors, falsified paperwork for claims and paid kickbacks to patients while collecting more than $6 million from the private insurers over three years, according to prosecutors Clark and Miller. Sebastian Ahmed, the CEO and co-owner of three treatment centers based in Davie, pocketed about half of that money, they said.

Overall, the Ahmed brothers’ treatment centers, Medi MD, Jacob’s Well and Amica Health, “fraudulently” filed claims with Blue Cross Blue Shield and the other private health insurers that totaled about $38 million between June 2016 and May 2019, according to trial evidence.

At trial, three Serenity patients testified that they never attended group therapy sessions at the treatment centers and neither did the majority of other patients.

In his defense, Sebastian Ahmed, who has a B.S. degree in economics and business administration from Florida State University, testified that he relied upon legal advice that he could offer patients free incentives such as air travel, rent and cash. Ahmed said his understanding was that it was lawful because the patients lacked financial resources.

Ahmed also testified that he was unaware that the clinical directors at the three treatment centers falsified patients’ progress notes to justify insurance claims — though they contradicted his testimony as trial witnesses.

Ahmed also testified that he was unaware that his brother received kickback payments from detoxification centers and lab-testing facilities totaling $540,000.

Last January, the brother, Ali Ahmed, 38, the former operations director and co-owner of Medi MD, was sentenced to 10 years in prison and ordered to pay $4.2 million in restitution to the private health insurers.

Also sentenced were the two clinical directors who worked for the Ahmed brothers: Hector Efrain Alvarez, 49, and Mauren Morel, 45, who both received prison sentences of roughly 2 1/2 years. Alvarez was ordered to pay about $3.9 million and Morel $320,000 to the private health insurers for their losses.

The sober homes case was investigated by agents with the FBI and Department of Health and Human Services-Office of Inspector General.

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