Former SUD Treatment Provider CEO Sentenced for $18M Claim Scheme

The former president and CEO of a California addiction treatment center was sentenced to 84 months in federal prison on charges of administering a fraudulent claim scheme, which cost the state more than $18.5 million.

Richard Ciampa, of the Los Angeles suburb of Commerce, was also ordered to pay more than $17.6 million in restitution as part of his sentencing. Ciampa pleaded guilty in January to one count of health care fraud.

The U.S. Department of Justice (DOJ) contended that Ciampa participated in the scheme to defraud the state’s Medi-Cal program for substance use disorder (SUD) treatment services for high school and middle school students. The alleged scheme operated out of Atlantic Recovery Services (ARS), a Long Beach-based non-profit that Ciampa founded in 1996. ARS later rebranded as Atlantic Health Services.


Between March 2009 and April 2013, ARS billed Drug Medi-Cal for SUD treatments for students who did not need those services, DOJ alleges. ARS was also accused of billing Drug Medi-Cal for group and individual counseling sessions that were not provided or did not meet reimbursement requirements related to size, length or setting. Drug Medi-Cal is a state program that funds substance abuse treatment in California.

Ciampa forced ARS employees to participate in the scheme, threatening them with termination or a reduction of work hours to part time if they refused, according to prosecutors. Ciampa “was aware or willfully blind” to the fraudulent billing practices conducted by his employees in response to his threats, prosecutors said in a press release announcing the sentence.

Ciampa told employees that they should “find a way” to enroll more students in ARS’s program, even though some of those individuals did not meet Drug Medi-Cal’s medical necessity requirement, DOJ reported. Counselors and managers maintained caseloads by enrolling students in ARS’s SUD treatment program, even if those students had used potentially addictive substances only occasionally or just once.


In one specific example of fraud, ARS in December 2011 submitted a reimbursement claim for a counseling session that occurred with a student on November 23, 2011. That date was a school holiday, when the student in question was absent and the counselor listed on the claim did not provide any services.

DOJ indicated that Medi-Cal lost more than $17.6 million due to fraudulent claims from ARS during the four-year time period.

In a letter to the federal court in Los Angeles where he was sentenced, Ciampa acknowledged that he put “pressure” on his employees to step up their billings. However, he denied ordering them to commit fraud. He instead blamed them for what he said was their misinterpretation of his directive to increase ARS’s revenues.

“I wish I had listened more, asked more questions, and taken seriously those who tried to warn me,” Ciampa wrote in the letter, which was reported on by various California news outlets.

Ciampa was previously arrested in 2016 by federal authorities on charges of fraudulent billing to Drug Medi-Cal. At the time, the DOJ said the scheme had cost Drug Medi-Cal $50 million, with ARS receiving $46 million.

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