The owner of an Orange County substance abuse treatment facility was charged in Connecticut with federal conspiracy and fraud offenses stemming from an alleged scheme to defraud state Affordable Care Act programs of millions of dollars, prosecutors announced Friday.

R. Jeffrey Yates, 52, of Santa Ana was charged in an indictment unsealed in the District of Connecticut on Wednesday, according to the U.S. Attorney’s Office in Connecticut.

Yates owned and operated Morningside Recovery, and allegedly conspired with others, including Jeffrey White and his son, Nicholas White, to defraud healthcare plans operating under the Affordable Care Act in Connecticut and other states by fraudulently enrolling individuals in ACA plans in states where the individuals did not live, the indictment alleges.

In order to maximize their proceeds from the fraud scheme, the Whites would allegedly enroll the individuals in ACA plans in states that paid the highest amount for substance abuse treatment, even though the individuals did not live in those states, according to prosecutors.

The Whites and Yates then allegedly arranged to have the individuals admitted to Morningside Recovery facilities for treatment. The clinic then allegedly billed ACA plans in Connecticut and elsewhere for thousands of dollars for treatment services. Yates and Morningside Recovery then paid the Whites for each patient that had been placed in a Morningside facility, prosecutors allege.

The indictment charges Yates with one count of conspiracy to commit healthcare fraud and mail fraud, seven counts of healthcare fraud, and five counts of mail fraud. If convicted, Yates faces up to 20 years on each of the conspiracy and mail fraud counts, and a maximum term of imprisonment of 10 years on each healthcare fraud count.

In October 2018, Jeffrey White and Nicholas White each pleaded guilty in Connecticut to one count of conspiracy to commit healthcare fraud and admitted that their scheme resulted in more than $27 million in losses to ACA plans across the country, including ACA plans in Connecticut, Arizona, California, Delaware, Indiana, Kentucky, New Jersey, Ohio, Oregon, Pennsylvania, Tennessee and Texas. They await sentencing.

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