Three people who ran a group of purported substance abuse treatment centers and sober homes were sentenced to federal prison Tuesday for their roles in a $21 million fraud scheme.
U.S. District Judge Federico Moreno sentenced Ali Ahmed, 38, to 10 years in prison, while Hector Efrain Alvarez, 49, and Mauren Morel, 45, each received two years and eight months, according to court records. They had each previously pleaded guilty in Miami federal court to conspiracy to commit health care fraud and wire fraud.
They were also ordered to pay fines and restitution. Ahmed owes $4.2 million, Alvarez owes $3.8 million and Maurel owes just over $320,000.
Ahmed and his brother, Sebastian Ahmed, were the co-owners of Jacob’s Well, Medi MD and Arnica Health. Alvarez was clinical director of Medi MD, and Morel was clinical director and co-owner of Jacob’s Well. The three businesses operated collectively as Serenity Ranch out of the same building in Davie, Florida.
According to court documents, from June 2016 to April 2019, the Ahmed brothers and Morel submitted and caused others to submit approximately $1.7 million in fraudulent claims through Jacob’s Well to insurance companies prompting payments of about $320,000. During the same period, prosecutors said the Ahmed brothers and Alvarez submitted and caused others to submit approximately $21.9 million in fraudulent claims through Medi MD, prompting payments of about $3.9 million.
According to an investigation, the scheme involved not only financial exploitation but also sexual exploitation of vulnerable, drug-addicted patients. Prosecutors say patients were attracted to attend Serenity Ranch facilities with free flights, free housing, vapes, clothing, spa days, psychoactive medications and illegal drugs.
Sebastian Ahmed, who was charged in the same indictment, has pleaded not guilty and is set for trial next month.