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Attorney General Josh Stein Announces Health Care Fraud Sentencings

For Immediate Release:
Thursday, December 16, 2021

Contact:
Nazneen Ahmed (919) 716-0060

(RALEIGH) Attorney General Josh Stein announced today that Luis Angel Lozada of Clayton was sentenced to 70 months in prison and three years of supervised release, and Humberto Mercado was sentenced to 15 months in prison, three years of supervised release after pleading guilty to conspiracy to commit health care fraud. Lozada was also ordered to pay $1,130,137 in criminal restitution while Mercado was ordered to pay $494,688 in restitution to the North Carolina Fund for Medical Assistance.

“We count on health care providers to take care of us and our loved ones,” said Attorney General Josh Stein. “Unfortunately, some providers are more focused on lining their pockets and will go to great – and illegal – lengths to do it. My office will hold accountable anyone who defrauds Medicaid and wastes taxpayer resources.”

In 2016, Lozada formed Cornerstone Family Services Group, a behavioral health business headquartered in Zebulon and with additional offices opened later. Between 2016 and 2020, Lozada conspired with multiple people to submit more than $1 million in false and fraudulent reimbursement claims for behavioral health services from Cornerstone, but these services were never provided. The false claims relied on and incorporated stolen beneficiary and clinician information.

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. Mercado was recruited to fabricate treatment records and began to do so before the first billings were submitted to Medicaid. Reese and Matos also pleaded guilty to conspiracy to commit health care fraud in separate related cases and were previously sentenced.

The investigation and prosecution of this case was conducted by the United States Attorney for the Eastern District of North Carolina, the Federal Bureau of Investigation, and the North Carolina Department of Justice’s Medicaid Investigations Division.

About the Medicaid Investigations Division (MID)

The Attorney General’s MID investigates fraud and abuse by health care companies and providers, as well as patient abuse and neglect in facilities that are funded by Medicaid. Medicaid is a joint federal-state program that helps provide medical care for people with limited income. To date, the MID has recovered more than $900 million in restitution and penalties for North Carolina.

The Medicaid Investigations Division receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $6,160,252 for Federal fiscal year (FY) 2020. The remaining 25 percent, totaling $2,053,414 for FY 2020, is funded by the State of North Carolina.

To report Medicaid fraud in North Carolina, call the North Carolina Medicaid Investigations Division at 919-881-2320.

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