Fort Lauderdale, Florida -- Sebastian Ahmed, 42, of Delray Beach, Florida, has been convicted of conspiracy to commit health care fraud and wire fraud, five counts of health care fraud, conspiracy to commit money laundering, and eleven counts of money laundering.  As part of the scheme, the conspirators exploited vulnerable drug addicts, the majority of whom were 18 to 26 years ago; falsified paperwork; and entered into various kickback arrangements, all in order to receive millions of dollars of falsely and fraudulently obtained funds for their own personal use and benefit.  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. 

On Monday, March 23, 2020, following a six-week jury trial, Ahmed was found guilty of one count of conspiracy to commit health care fraud and wire fraud, ten counts of health care fraud, one count of conspiracy to commit money laundering, and eleven counts of money laundering, in case number 19-cr-60200-MORENO(COHN)(s). 

Sentencing is scheduled for August 6, 2020 before United States District Judge James I. Cohn in Fort Lauderdale.  As to the health care fraud and wire fraud conspiracy and money laundering conspiracy counts, the defendant faces a statutory maximum of 20 years as to each count.  As to each of the health care fraud and money laundering counts, the defendant faces an additional maximum statutory sentence of 10 years’ imprisonment.

Ariana Fajardo Orshan, United States Attorney for the Southern District of Florida, George L. Piro, Special Agent in Charge, Federal Bureau of Investigation, and Omar Perez Aybar, Special Agent in Charge, U.S. Department of Health and Human Services-Office of Inspector General made the announcement.

The government’s theory of prosecution advanced in opening statement and closing arguments was that Sebastian Ahmed was the CEO, president and CFO of the two substance abuse treatment centers: Jacob’s Well and Medí MD; and the medical health clinic, Arnica Health, all of which he operated under the umbrella of Serenity Treatment Center, Serenity Living, and “Serenity Ranch Recovery” in Davie, Florida.  Ahmed operated the three clinics from in or around June 2016 through May 2019.  He employed his brother, Al a/k/a “Ali” Ahmed as the COO.  Testimony revealed that Al Ahmed had previously declared bankruptcy having been found liable in a civil suit brought by his former employer, Kaplan University, for stealing confidential lead information from Kaplan. 

The government emphasized  at trial that defendant  (1) engaged in illegal billing to private insurance plans through Jacob’s Well prior to the clinic being certified by DCF in February 9, 2017; (2) provided unlawful inducements to the approximately 500 patients consisting of free airline travel, housing, vapes, manicures, cash, and failure to collect patient responsibilities for co-pays and deductibles; and (3) billed for medically unnecessary therapeutic services consisting of therapy and urine analyses, the former having not been provided but billed by defendant’s substance abuse clinics.  The patients were also permitted to reside in co-ed housing in which destructive sexual relationships, not conducive to real addiction treatment, formed – sometimes between the staff and patients, according to the testimony and evidence.

According to court documents and evidence presented at trial, the patients consisted of young adults in their twenties who primarily were addicted to opioids and other drugs of abuse.  Many of the patients were permitted to remain on their parents’ private insurance plans up to age 26.

The patients resided in a series of so-called sober homes maintained by defendant in Davie, Southwest Ranches, Hollywood and Pompano.  None of these homes were certified by DCF as approved community housing for persons engaged in a substance abuse treatment program.

Former Serenity employees including co-defendants Mauren Morel and Hector Alvarez, both  Clinical Social Workers in the State of Florida,  testified that they prepared fake progress notes to support fraudulent billing for daily group therapy sessions that patients did not attend.  They testified that they did so at the defendant’s direction, and that claims were even submitted for dates when patients were not physically present.

Government expert witness Dr. Kelly Clark was a board certified addiction medicine specialist and clinical psychiatrist.  She focused her career on issues of addictive disease.  She testified that the manner in which Serenity’s medical providers prescribed buprenorphine and benzodiazepines to a drug abusing population was medically inappropriate and potentially dangerous.  Patient-witnesses and the parent of a former patient likewise testified that Serenity caused their addictions to intensify rather than improve, and that multiple patients suffered overdoses and relapses that went unaddressed by the staff at Serenity.  Indeed, the record showed that Sebastian Ahmed failed to report a single overdose incident to DCF as required by law, and that multiple patients were cycled back and forth between detox centers and Serenity without apparent improvement in their condition.  Evidence that Serenity permitted and even procured addictive drugs for its patients was presented at trial, and medical records introduced as trial exhibits revealed that the doctors did not check the expensive urine screens that were being ordered until well after patients’ discharge.  These urine screens revealed repeat positives for, among other drugs, methamphetamine, heroin, cocaine, and prescription narcotics.

From June 2016 through May 2019, the government attributed approximately $38 million in fraudulent billing submitted by defendant’s clinics which resulted in the reimbursement of over $6 million in payments.

            Co-conspirators and former co-defendants Al a/k/a Ali Ahmed, the defendant’s brother; and Hector Alvarez and Mauren Morel, the clinical directors at two of the facilities, were also charged and pled guilty in connection with the fraud.  Al a/k/a Ali Ahmed, who served as a Chief Operating Officer and co-owner of the facilities, was sentenced to ten years’ imprisonment.  Hector Alvarez and Mauren Morel, both of whom testified at trial against Sebastian Ahmed, each received sentences of 32 months’ imprisonment.  These three former co-defendants were sentenced by United States District Judge Federico A. Moreno prior to the trial.

Ms. Fajardo Orshan commended the investigative efforts of FBI and HHS-OIG. Support for the investigation was also provided by the Drug Enforcement Administration, Davie Police Department, Broward Sheriff’s Office, Palm Beach Sober Homes Task Force, and the Florida Department of Children and Families.  The case is being prosecuted by Assistant U.S. Attorneys Christopher J. Clark and Lisa H. Miller.  Assistant U.S. Attorneys Nicole Grosnoff and Peter Laserna are handling the asset forfeiture component of the case.

            Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or on http://pacer.flsd.uscourts.gov.

Sober Homes Co-Owner Sentenced to Ten Years in Prison

MIAMI, FL – Three former co-owners and clinical directors of a group of purported substance abuse treatment centers and sober homes were sentenced to prison today for their roles in a conspiracy to commit health care fraud and wire fraud that resulted in an actual loss of more than $3.8 million, and through which the conspirators sought to obtain more than $21 million.

U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, and Special Agent in Charge Omar Pérez Aybar of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) made the announcement. 

Ali Ahmed, 38, Hector Efrain Alvarez, 49, and Mauren Morel, 45, all of Broward and Palm Beach Counties, previously pled guilty to one count of conspiracy to commit health care fraud and wire fraud (Case No. 19cr60200).  U.S. District Judge Federico A. Moreno of the Southern District of Florida sentenced Ahmed to 120 months in prison, Alvarez to 32 months in prison and Morel to 32 months in prison.  In addition, the defendants were ordered to forfeit certain property and pay forfeiture money judgments, as well as to pay restitution.  Specifically, Ahmed owes $4,204,336 in restitution; Alvarez owes $3,884,035; and Maurel owes $320,301 in restitution.

In recent years, South Florida has become the locus for drug and alcohol addicts seeking assistance in an effort to become and remain sober.  Substance abuse treatment centers that assist such persons undergoing detoxification from an intoxicating or addictive substance are regulated under state and federal law.  These substance abuse treatment centers, or detox centers, offer a continuum of care including, from most intensive to least intensive, as follows: inpatient detox, Partial Hospitalization Programs (PHP’s), Intensive Outpatient Programs (IOP’s), and Outpatient Programs (OP’s).  Persons undergoing treatment on an out-patient basis, whether in PHP, IOP, or OP, typically elect to live in a “recovery residence,” also known as a “sober home” or “halfway house,” with other persons who are also in treatment and committed to a drug and alcohol-free lifestyle.

Jacob’s Well, Inc. (Jacob’s Well) was a Florida corporation, located at 7950 SW 30th Street, Suite 202, Davie, Florida.  Jacob’s Well was a substance abuse treatment center licensed with the Florida Department of Children and Families that purportedly provided private insurance beneficiaries with substance abuse treatments and services.

Medi MD, LLC. (Medi MD) was a Florida corporation, located at 7950 SW 30th Street, Suite 200, Davie, Florida.  Medi MD was a substance abuse treatment center licensed with the Florida Department of Children and Families that purportedly provided private insurance beneficiaries with substance abuse treatments and services.

Arnica Health was a Florida corporation, located at 7950 SW 30th Street, Suite 202, Davie, Florida.  Arnica Health was a purported medical treatment center co-located with the purported substance abuse treatment centers.  Together with Medi MD and Jacob’s Well, Arnica Health operated as a part of Serenity Living and was affiliated with sober homes known as Serenity Ranch.

Ali Ahmed was Treasurer of Jacob’s Well, Director of Operations for Medi MD, and co-owner of Jacob’s Well, Medi MD, and Arnica Health. 

Sebastian Ahmed was the CEO and co-owner of Jacob’s Well, Medi MD, and Arnica Health.

Hector Efrain Alvarez was Clinical Director of Medi MD.

Mauren Morel was Clinical Director and co-owner of Jacob’s Well. 

Medi MD, Jacob’s Well, and Arnica Health together operated as Serenity Ranch/Serenity Living.  

According to court documents, from June 2016 through April 2019, Ali Ahmed, Sebastian Ahmed, and Mauren Morel, submitted and caused others to submit, via interstate wire communications, approximately $1,693,276 in claims which falsely and fraudulently represented that various health care benefits, primarily substance abuse PHP, IOP, and OP services, were medically necessary, prescribed by a doctor, and provided by Jacob’s Well to insurance beneficiaries of Aetna, BCBS, Cigna and UHC.  As a result of such false and fraudulent claims, Aetna, BCBS, Cigna, and UHC made payments to the corporate bank accounts of Jacob’s Well in the approximate amount of $320,301.

Furthermore, during the same approximate time period, Ali Ahmed, Sebastian Ahmed, and Hector Efrain Alvarez submitted and caused others to submit, via interstate wire communications, approximately $21,899,439 in claims which falsely and fraudulently represented that various health care benefits, primarily substance abuse PHP, IOP, and OP services, were medically necessary, prescribed by a doctor, and provided by Medi MD to insurance beneficiaries of Aetna, BCBS, Cigna, Humana and UHC.  As a result of such false and fraudulent claims, Aetna, BCBS, Cigna, Humana and UHC made payments to the corporate bank accounts of Medi MD in the approximate amount of $3,884,035.

Ali Ahmed, Sebastian Ahmed, Hector Efrain Alvarez, and Mauren Morel used the proceeds of the health care fraud for their personal use and benefit, the use and benefit of others and to further the fraud scheme.

As set forth in Court documents, the scheme involved not only financial exploitation but also sexual exploitation of vulnerable, drug-addicted patients, whom were attracted and induced to attend Serenity Ranch facilities with free flights, free housing, vapes, clothing, spa days, benzodiazepine medications, and even drugs.  Indeed, the evidence showed that patients were permitted to keep using drugs, and even provided drugs – including heroin and cocaine – by conspirators such as Ali Ahmed.  Ali Ahmed also engaged in sexual relationships with patients and, as a result of the destabilizing environment at the facilities, many patients did not get the treatment that they so desperately needed.

Co-defendant Sebastian Ahmed, the former CEO of Jacob’s Well, Medi MD, and Arnica, who was charged in the same indictment, has pleaded not guilty and is set for trial on February 18, 2020, before Senior U.S. District Judge James I. Cohn.  He is presumed innocent of the charges.

The FBI and HHS-OIG investigated the case, with assistance from the Davie Police Department, Broward County Sheriff's Office and U.S. Drug Enforcement Administration (DEA).  Assistant U.S. Attorneys Christopher J. Clark and Lisa H. Miller are prosecuting the case, and Assistant U.S. Attorneys Nicole Grosnoff and Peter A. Laserna are handling the asset forfeiture issues related to this matter.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.

MIAMI – Three former co-owners and clinical directors of a group of purported substance abuse treatment centers and sober homes pleaded guilty yesterday for their roles in a conspiracy to commit health care fraud and wire fraud that resulted in an actual loss of more than $3.8 million, and through which the conspirators sought to obtain more than $21 million.

U.S. Attorney Ariana Fajardo Orshan for the Southern District of Florida, Special Agent in Charge George L. Piro of the FBI’s Miami Field Office, and Special Agent in Charge Omar Pérez Aybar of the U.S. Department of Health and Human Services Office of the Inspector General (HHS-OIG) made the announcement. 

Ali Ahmed, 38, Hector Efrain Alvarez, 49, and Mauren Morel, 45, all of Broward and Palm Beach Counties, pleaded guilty before U.S. District Judge Federico A. Moreno of the Southern District of Florida, to one count of conspiracy to commit health care fraud and wire fraud.  The defendants are scheduled to be sentenced on Jan. 21, 2020 at 10:30 a.m. (Case No. 19cr60200)

As alleged in the indictment, in recent years, South Florida has become the locus for drug and alcohol addicts seeking assistance in an effort to become and remain sober.  Substance abuse treatment centers that assist such persons undergoing detoxification from an intoxicating or addictive substance are regulated under state and federal law.  These substance abuse treatment centers, or detox centers, offer a continuum of care including, from most intensive to least intensive, as follows: inpatient detox, Partial Hospitalization Programs (PHP’s), Intensive Outpatient Programs (IOP’s), and Outpatient Programs (OP’s).  Persons undergoing treatment on an out-patient basis, whether in PHP, IOP, or OP, typically elect to live in a “recovery residence,” also known as a “sober home” or “halfway house,” with other persons who are also in treatment and committed to a drug and alcohol-free lifestyle.

Jacob’s Well, Inc. (Jacob’s Well) was a Florida corporation, located at 7950 SW 30th Street, Suite 202, Davie, Florida.  Jacob’s Well was a substance abuse treatment center licensed with the Florida Department of Children and Families that purportedly provided private insurance beneficiaries with substance abuse treatments and services.

Medi MD, LLC. (Medi MD) was a Florida corporation, located at 7950 SW 30th Street, Suite 200, Davie, Florida.  Medi MD was a substance abuse treatment center licensed with the Florida Department of Children and Families that purportedly provided private insurance beneficiaries with substance abuse treatments and services.

Arnica Health was a Florida corporation, located at 7950 SW 30th Street, Suite 202, Davie, Florida.  Arnica Health was a purported medical treatment center co-located with the purported substance abuse treatment centers.  Together with Medi MD and Jacob’s Well, Arnica Health operated as a part of Serenity Living and was affiliated with sober homes known as Serenity Ranch.

Ali Ahmed was Treasurer of Jacob’s Well, Director of Operations for Medi MD, and co-owner of Jacob’s Well, Medi MD, and Arnica Health. 

Sebastian Ahmed was the CEO and co-owner of Jacob’s Well, Medi MD, and Arnica Health.

Hector Efrain Alvarez was Clinical Director of Medi MD.

Mauren Morel was Clinical Director and co-owner of Jacob’s Well.   

            According to court documents, from June 2016 through April 2019, Ali Ahmed, Sebastian Ahmed, and Mauren Morel, submitted and caused others to submit, via interstate wire communications, approximately $1,693,276 in claims which falsely and fraudulently represented that various health care benefits, primarily substance abuse PHP, IOP, and OP services, were medically necessary, prescribed by a doctor, and provided by Jacob’s Well to insurance beneficiaries of Aetna, BCBS, Cigna and UHC.  As a result of such false and fraudulent claims, Aetna, BCBS, Cigna, and UHC made payments to the corporate bank accounts of Jacob’s Well in the approximate amount of $320,301.

            Furthermore, during the same approximate time period, Ali Ahmed, Sebastian Ahmed, and Hector Efrain Alvarez submitted and caused others to submit, via interstate wire communications, approximately $21,899,439 in claims which falsely and fraudulently represented that various health care benefits, primarily substance abuse PHP, IOP, and OP services, were medically necessary, prescribed by a doctor, and provided by Medi MD to insurance beneficiaries of Aetna, BCBS, Cigna, Humana and UHC.  As a result of such false and fraudulent claims, Aetna, BCBS, Cigna, Humana and UHC made payments to the corporate bank accounts of Medi MD in the approximate amount of $3,884,035.

            Ali Ahmed, Sebastian Ahmed, Hector Efrain Alvarez, and Mauren Morel used the proceeds of the health care fraud for their personal use and benefit, the use and benefit of others and to further the fraud scheme.

            Co-defendant Sebastian Ahmed, the former CEO of Jacob’s Well, Medi MD, and Arnica, who was charged in the same indictment, has pleaded not guilty and is set for trial in this matter to begin on Nov. 25, 2019, before Judge Moreno.  He is presumed innocent of the charges.

The FBI and HHS-OIG investigated the case, with assistance from the Davie Police Department, Broward County Sheriff's Office and U.S. Drug Enforcement Administration (DEA).  Assistant U.S. Attorneys Christopher J. Clark and Lisa H. Miller are prosecuting the case, and Assistant U.S. Attorneys Nicole Grosnoff and Peter A. Laserna are handling the asset forfeiture issues related to this matter.

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov.