NM man sentenced to 2 ½ years in federal prison for role in $2 million federal health care fraud scheme

ALBUQUERQUE, N.M. — A New Mexico man was sentenced Wednesday to 30 months in prison for defrauding a federally funded health care program of nearly $2 million.

Special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) investigated this case.

Cory Werito, 33, from Farmington, New Mexico, and his co-defendant, Rosita Toledo, 48, of Kirtland, New Mexico, were charged in a 10-count indictment filed June 15, 2016. The indictment included nine health care fraud charges against Werito and Toledo, and an aggravated currency structuring charge against Werito.  Werito’s prison term is to be followed by three years of supervised release.  He also was ordered to pay $1,218,165 in restitution to the victim of his criminal conduct.

The health care fraud charges arose out of the defendants’ roles in creating and operating a medical transportation company, CW Transport, which was a New Mexico company in Farmington that provided non-emergency medical transportation for Arizona Medicaid recipients. In turn, the company filed for reimbursement payments from the Arizona Health Care Cost Containment System (AHCCCS), a health-care benefit program.

Between 2011 and 2013, CW Transport collected more than $1.9 million in Medicaid reimbursements from AHCCCS by submitting more than 18,000 claims for reimbursement, the vast majority of which were wholly or substantially false and fraudulent. 

According to the indictment, Werito conducted financial transactions involving the proceeds of the health care fraud in a manner that avoided filing of Currency Transaction Reports (CTRs).  CTRs are reports that must be filed by financial institutions on transactions more than $10,000 during any business day, and are used by law enforcement authorities to uncover a broad range of illegal activities, including money laundering.

From August 2011 to July 2013, Werito conducted at least 200 cash withdrawals, each for several thousands of dollars, but less than $10,000 to avoid filing CTRs, and totaling at least $800,000.

The indictment included forfeiture provisions seeking an order requiring Werito and Toledo to forfeit to the United States at least $1,959,405, the proceeds derived from the health care fraud alleged in the indictment.

On March 9, 2017, Werito pleaded guilty to committing health care fraud.  Werito admitted, as the sole owner of CW Transport, that he submitted about 18,765 claims for reimbursement to AHCCCS between July 2011 and July 2013.  Because the claims were grouped in 140 invoices, Werito received 140 payments from AHCCCS totaling $1,959,405.  Werito admitted submitting the claims for reimbursement as part of a scheme to defraud AHCCCS because he either never provided, or provided in a substantially different manner, many of the services for which he sought and received reimbursement.

On March 30, 2017, Toledo also entered a guilty plea admitting her role in the health care fraud scheme.  In entering her guilty plea, Toledo admitted that between July 2011 and July 2013 and in her capacity as the primary claims processor for CW Transport, she submitted 18,765 fraudulent claims for reimbursement that caused AHCCCS to pay CW Transport $1,959,405.  A sentencing date for Toledo has not been set.

The FBI, U.S. Marshals Service, San Juan County (New Mexico) Sheriff’s Office, the Arizona Health Care Cost Containment System, and New Mexico Office of the Attorney General assisted in this investigation.