Head Of Camden Nonprofit, Cherry Hill Therapist, Both Admit Defrauding Medicaid

CAMDEN, N.J. – The executive director of a nonprofit provider of mental health services to Camden’s poorest residents and a former therapist who worked at the facility have admitted their respective roles in defrauding New Jersey Medicaid, Acting U.S. Attorney William E. Fitzpatrick announced today.

On May 11, 2017, Cesar Tavera, 53, of Cherry Hill, the executive director of Nueva Vida Behavioral Health Center of New Jersey, a nonprofit provider of mental health services to the Camden Hispanic community, pleaded guilty before U.S. District Judge Noel L. Hillman in Camden federal court to an information charging him with conspiracy to commit health care fraud and with embezzling from a health care benefit program. Andres Ayala, 62, of Cherry Hill, New Jersey, pleaded guilty today before Judge Hillman to an information charging him with conspiracy to commit health care fraud.

According to documents filed in these cases and statements made in court:

Most of Nueva Vida’s patients are on Medicaid, and Tavera controlled Nueva Vida’s billings to New Jersey Medicaid. He also supervised the people at Nueva Vida who treated Medicaid patients. New Jersey Medicaid rules require that people giving mental health therapy to Medicaid recipients must either be licensed or have a master’s degree in mental health. Tavera had several unlicensed, unqualified individuals treat Medicaid recipients and then billed Medicaid as if qualified therapists had treated the patients. Tavera himself treated Medicaid patients even though he was not qualified.

Under Tavera’s direction, Nueva Vida used several other fraudulent practices to obtain money from Medicaid. Nueva Vida billed Medicaid for therapy that never happened and billed group therapy as if each participant received individual therapy. If a mother received therapy without her child, Nueva Vida would bill Medicaid for a session with the mother and a separate session with the child. Nueva Vida billed Medicaid for short sessions as if they lasted for 45 minutes. To cover up his crimes, Tavera created false records to pass Medicaid audits.

He regularly embezzled money from the Nueva Vida bank account in addition to his salary and spent the money on himself and his family. He used the Nueva Vida bank account to pay for dental care, meals, travel in the United States and abroad, and the expenses of his daughter’s music career. Tavera paid no-show employees with cash and payroll checks from Nueva Vida’s bank account. He repeatedly withdrew cash at the Sugar House Casino in Philadelphia and used the money to gamble at the casino. Tavera embezzled more than $1.5 million from Nueva Vida.

Ayala worked for many years as a therapist at Nueva Vida Behavioral Health Center of New Jersey, a nonprofit provider of mental health services to the Camden Hispanic community. Ayala conspired with Tavera to submit false billings to New Jersey Medicaid. If patients did not show up for their appointments, Ayala would have Nueva Vida bill Medicaid, and he was paid for the phantom session. If a mother came for therapy, Ayala would bill for a therapy session with the child. If he saw a Medicaid patient for 10 to 15 minutes, he would bill Medicaid for 45 minutes of therapy. Ayala was responsible for $200,000 in losses to Medicaid.

The counts of health care fraud and embezzlement each carry a maximum penalty of 10 years in prison and a fine of the greater of $250,000 or twice the gain or loss caused by the offense. Sentencing for both defendants is scheduled for Aug. 18, 2017.

Acting U.S. Attorney Fitzpatrick credited agents of the FBI’s South Jersey Resident Agency, under the direction of Special Agent in Charge Michael Harpster in Philadelphia, and special agents from the Department of Health and Human Services, Office of Inspector General, under the direction of Special Agent in Charge Scott J. Lampert, for the investigation leading to the guilty pleas. He also thanked the Medicaid Fraud Division of the N.J. Office of the State Comptroller.

The government is represented by Assistant U.S. Attorney R. David Walk Jr. of the U.S. Attorney’s Office Health Care and Government Fraud Unit in Camden.

The U.S. Attorney’s Office reorganized its health care practice in 2010 and created a stand-alone Health Care and Government Fraud Unit to handle both criminal and civil investigations and prosecutions of health care fraud offenses. Since that time, the office has recovered more than $1.33 billion in health care and government fraud settlements, judgments, fines, restitution and forfeiture under the False Claims Act, the Food, Drug and Cosmetic Act, and other statutes.

Defense counsel:

Tavera: Michael Miller Esq., Haddon Heights, New Jersey

Ayala: Hope C. Lefeber Esq., Philadelphia