One of the leaders of a family-run ring that tried to rip off more than $100 million in healthcare insurance payments by the city of Miami, Miami-Dade County Public Schools and numerous major companies was sentenced to 10 years in prison on Thursday.
Hendris Castillo Morales, who pleaded guilty to conspiring to commit healthcare fraud, sought a more lenient sentence from U.S. District Judge Robert Scola. But the judge pointed out that Castillo showed no remorse, repaid nothing to the victims and has a brother who fled to Cuba with potentially millions to avoid facing fraud charges in Miami federal court.
FBI agents tried to contact Reynaldo Castillo by telephone after apprehending 15 other defendants in the family’s organization last March.
“When informed there was an outstanding warrant for his arrest, Reynoldo Castillo hung up the telephone,” according to court documents. He traveled from Miami to Mexico and then Cuba to evade justice, according to prosecutors. Castillo has a mother and other family who live in Cuba.
Prosecutors confirmed that Reynaldo Castillo and two other defendants, Ezequiel Servero Casas and Jose Gerardo Gonzalez, fled to Cuba — a trend that has escalated over the past decade of acute healthcare fraud in South Florida, especially among Cuban immigrants charged with fleecing the federal Medicare program.
Prosecutors Christopher Clark and Michelle Alvarez succeeded in obtaining detention orders for almost all of the defendants because they were considered flight risks to Cuba. They also sought to recover millions of dollars paid out to the defendants and to seize at least five buildings that some purchased to house their clinics.
The Castillo case is unusual because the family’s network of clinics targeted major private insurance companies that managed healthcare plans for self-insured public and private entities.
The city of Miami, Miami-Dade County Public Schools and several companies lost millions of dollars in health insurance payments as a result of being scammed by the Castillo-run clinics that submitted bogus claims for pain injections, physical therapy and other purported services, according to two indictments.
Prosecutors charged a total of 18 defendants with trying to steal $130 million from the public entities, private companies and major insurers, namely Blue Cross Blue Shield, United Healthcare and Cigna. Among them: Danny Jacomino Bordon, who ran a Miami rehab clinic as well as a film production business called Ouija Studios.
All together, the various entities and their insurers paid out $15 million to the healthcare network, which operated about 35 clinics in Hialeah, Doral and Miami between 2012 and 2015, according to the indictments.
Among the bilked entities: Pepsi Co., Macy's, RadioShack, BJ's Wholesale Club, Lincoln Property Company, Nextera Energy and Southeast Frozen Foods Company.
Most of those, as well as the city of Miami and Miami-Dade school system, are self-insured with healthcare plans managed by the big insurers — so the fraudulent healthcare payments came directly out of their pockets.
According to the indictments, the Castillo family’s clinics used familiar ploys to carry out the racket: stealing the names of employees to file false claims, paying kickbacks to patient recruiters, and misappropriating the licensing information of physicians. Most of the claims were for injections to treat purported knee and back pain.
Almost all of the clinics — including 1st Class Medical Centers, A Woman Health Center and Absolute Rehabilitation Center — were owned and operated by Reynaldo Castillo, Hendris Castillo, Maite Garcia and Lisbet Castillo Batista, according to the indictments. Maite Garcia, divorced from Reynaldo Castillo, was sentenced to four years in prison on Thursday. Their daughter, Lisbet Castillo, is awaiting sentencing.
Another defendant, Alejandro Biart, pleaded guilty to recruiting patients who accepted kickbacks from the co-conspirators in return for referring Cigna beneficiaries to their clinics. Biart was sentenced to more than three years in prison on Thursday.
The rest of the defendants, in exchange for a fee, allowed their names to be used to incorporate the clinics, open bank accounts and cash checks received from Cigna, Blue Cross Blue Shield and United Healthcare, the indictments said. Almost all of them also pleaded guilty.