“This case is an example of the exemplary work done by DHCS investigators to protect government programs designed to help citizens. This is important work in which fraud is investigated, arrests are made and prosecutions take place, and should serve as an example to those who are using fraudulent schemes involving government programs to line their pockets, prison time and restitution awaits you. Kudos to the investigators of this case.” – CSLEA President Alan Barcelona
SAN DIEGO – On October 26, 2021, Melissa Alvarez Torres, 33, and Jose Luis Olmos Hernandez, 36, both of Chula Vista, were sentenced in federal court to 33 months and 40 months in prison, respectively, for stealing hundreds of thousands of dollars from pregnant women and using the money to buy multiple properties in Mexico, including a beachfront home in Nayarit.
The couple pleaded guilty in July, admitting that during a four-year period, their healthcare fraud scheme to sell bogus insurance to pregnant women caused more than $1 million in losses to California’s Medi-Cal Access Program known as MCAP.
MCAP is a government health care program administered by the California Department of Health Care Services that provides working, middle-income California families access to affordable maternity and post-natal care. Alvarez and Olmos were very familiar with MCAP, twice utilized for their family.
According to court documents, beginning in 2016, Alvarez and Olmos used Facebook to fraudulently market private “insurance” under the name Seguros Americanos Embarazo (“American Pregnancy Insurance”). They targeted pregnant women living in Mexico and holding work or tourist visas permitting them to enter the United States. These women contacted Alvarez and Olmos through Facebook or WhatsApp after being referred by other women. Alvarez and Olmos falsely claimed that their “insurance” product would permit these pregnant women to give birth legally in the United States without risk to their visas.
The women, many first-time mothers dealing with high-risk pregnancies, hoped to access high quality American health care and knew that they could not lawfully use a public health program, and that they would lose their visas if they did so. Alvarez and Olmos falsely assured the pregnant women that their product was private insurance and instructed them on how to avoid any problems when crossing the border for medical appointments. Alvarez and Olmos charged each woman between $1,200 and $3,000 per pregnancy for the “insurance.”
Alvarez and Olmos have admitted that, in reality, they did not have private insurance to sell. They used the women’s personal identifying information to sign them up for MCAP benefits through the State of California without the knowledge or consent of the women. Alvarez and Olmos submitted hundreds of false applications and fraudulent supporting tax and employment documents to MCAP, falsely claiming that the women were California residents and therefore eligible for benefits. Alvarez also impersonated dozens of these women in phone calls to MCAP trying to get the fraudulent applications approved. Alvarez and Olmos thereby cost American taxpayers over $1 million in health care costs and profited by charging hundreds of thousands of dollars in fraudulent fees paid by the pregnant women.
Additionally, Alvarez has agreed to pay almost $22,000 in restitution to the State of California for Medi-Cal benefits she, Olmos, and their children received as a result of her concealing these fraud proceeds and properties she and Olmos owned in Mexico.
As part of their sentence, Alvarez and Olmos were ordered to forfeit $424,500 in criminal proceeds, and to pay more than $1.5 million in restitution to the State of California and 283 individual victims of their fraud.
This case is a result of a multiagency investigation initiated by the California Department of Health Care Services – Investigations Branch, pursuant to the Travel and Residency Enforcement Co-Op with the Social Security Administration and the United States Attorney’s Office for the Southern District of California, along with the Federal Bureau of Investigation.
“Today’s sentencing of the defendants is evidence of the teamwork with our federal partners in stopping criminals defrauding California’s Medi-Cal program and, in turn, the residents of our state. I commend the personnel of the DHCS Investigations Branch, the FBI, and the US Attorney’s Office for their commitment and dedication in protecting the integrity of Medi-Cal,” said DHCS Director Michelle Baass.
“The defendants were driven by greed and devised an elaborate scheme to defraud the state and make a quick buck,” said FBI Special Agent in Charge Suzanne Turner. “Today, they found out the cost of their scheme. This case should serve as a warning – the FBI will continue to work with our state partners at the California Department of Health Care Services to detect and disrupt those who abuse government funded health care programs which ultimately puts the viability of those programs at risk.”