Clayton, NC Resident Sentenced for Conspiring to Defraud the North Carolina Medicaid System

NEW BERN, N.C. – A Clayton, North Carolina man, Luis Angel Lozada, was sentenced today to 70 months in prison and three years of supervised release for conspiracy to commit health care fraud.  On September 18, 2020, Lozada pleaded guilty to the charge.  As part of sentencing, Lozada was also ordered to pay $1,130,137 in criminal restitution to the North Carolina Fund for Medical Assistance. 

According to court documents and other information presented in court, between 2016 and 2020, Lozada conspired with multiple individuals to defraud the North Carolina Medicaid system by submitting over $1 million in false and fraudulent claims for the reimbursement of behavioral health services.  Medicaid is a federally funded health care benefit program that helps pay for medical-related services for low-income individuals and their families.  In North Carolina, Medicaid is administered by the North Carolina Department of Health and Human Services, Division of Health Benefits.

In March 2016, Lozada formed a behavioral health business in North Carolina known as Cornerstone Family Services Group (“Cornerstone”).  Cornerstone was headquartered in Zebulon initially and later opened offices elsewhere in the district.  Cornerstone submitted high-volume Medicaid claims for services that were never rendered; the false claims relied on stolen beneficiary and clinician information that was incorporated into the fraudulent billings.  Between 2016 and 2017, for example, Lozada partnered with co-conspirators Reginald Van Reese, Jr., and Ruben Samuel Matos to source and integrate the stolen Medicaid beneficiary data into Cornerstone’s billings.  The beneficiary information, in turn, was used to back-bill Medicaid for the maximum number of units allowed, notwithstanding the fact that the beneficiary had never been treated by Cornerstone.  Another co-conspirator, Humberto Mercado, was recruited to fabricate treatment records and began to do so before the first billings were submitted to Medicaid.  

Reese, Matos, and Mercado each pleaded guilty to conspiracy to commit health care fraud in separate related cases.  Mercado was sentenced today to 15 months imprisonment, three years of supervised release, and restitution in the amount of $494,688.  Reese and Matos were previously sentenced.

Michael F. Easley, Jr., United States Attorney for the Eastern District of North Carolina, made the announcement after sentencing by United States District Judge Louise W. Flanagan. The Federal Bureau of Investigation and the North Carolina Medicaid Investigations Division investigated the case.  Assistant United States Attorney Adam F. Hulbig prosecuted the case for the government.

Related court documents and information can be found on the website of the U.S. District Court for the Eastern District of North Carolina or on PACER by searching for Case No. 5:20-CR-340-FL.