Fraud bust targets former state Medicaid employees

By Guillermo Contreras
gcontreras@express-news.net
Updated 06:15 p.m., Tuesday, July 26, 2011

A half-dozen former employees of the state Medicaid system were arrested Tuesday, accused of committing more than $200,000 in Medicaid fraud.

They were among 18 defendants, most from San Antonio, indicted last week on healthcare fraud charges.

In coordinated operations Tuesday, agents with the FBI, the Texas Attorney General's Office and the U.S. Department of Health and Human Services Office of Inspector General arrested all 18, including one each in Austin and Odessa.

The Texas Health and Human Services Commission runs the state's Medicaid program and the seven former employees worked in the section that, using federal funds, pays Medicaid recipients for travel required to get treatment or for medical appointments, authorities said.

Court records said that between 2006 and earlier this year, in separate but similar schemes, the ex-state workers conspired to commit fraud in varying amounts that totaled more than $212,800. They allegedly submitted hundreds of falsified claims for travel in the names of friends or relatives.

When the acquaintances got the funds, they split the money with the then-Medicaid employees, according to court records. The workers then allegedly falsified records to cover their tracks, and were terminated as a result of internal and criminal investigations that resulted in five separate indictments charging healthcare fraud, conspiracy, embezzlement and making false statements.

The ex-employees were identified as Loretta Cortez; Patricia Cortez; Bernabe Hernandez; Arlene Rodriguez; Olivia Z. Cardenas; and Caroline Hernandez.

The Cortezes' lawyer, Michael Machado, said his clients would enter not guilty pleas at arraignment early next month.

The other defendants include Leticia Orosco; Juanita Leyva; Michelle Aguilar; Michelle Garcia; Priscilla Rojas; Erika Rojas; Michael Zamora; Veronica Vega; Angela N. Grado; Tecily Ward; Eugenia Marie Barnes, and Jonathan Reyes.

All were released on $50,000 bonds except Loretta Cortez, Patricia Cortez, Michael Zamora and Caroline Hernandez, who have bail hearings scheduled in the next two weeks.

If convicted, the defendants face up to 10 years in prison and a $250,000 fine. Also, depending on their roles, they face restitution ranging from $9,300 to $93,000.

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