richard roberts reiner nusbaum complaint

FELONY COMPLAINT WARRANT E-FILED (DA CASE# 20F05157)OC DNA NOT ON FILE: RICHARD ROBERTS, REINER NUSBAUM

SUPERIOR COURT OF CALIFORNIACOUNTY OF ORANGE, CENTRAL JUSTICE CENTER

FELONY COMPLAINTWARRANT

No.OCDA HF18100003DOI 18DH023623

_______________________________________THE PEOPLE OF THE STATE OF CALIFORNIA, ) ) Plaintiff, ) ) ) vs. ) )RICHARD THOMAS ROBERTS II 08/31/58 ) N4592165 )REINER VINCENT NUSBAUM 06/17/65 ) C3055040 ) ) Defendant(s))

The Orange County District Attorney charges that in OrangeCounty, California, the law was violated as follows:

COUNT 1: On or about and between August 01, 2015 and July 31,2016, in violation of Section 550(a)(5) of the Penal Code(CONSPIRACY TO COMMIT INSURANCE FRAUD), a FELONY, RICHARD THOMASROBERTS II and REINER VINCENT NUSBAUM did unlawfully conspirewith Mahyar Mohases, James Frageau, Robert Williams, NicholasReeves, Jeremy Ryan, and other named and unnamed conspirators,with the intent to defraud, to prepare, make, and subscribe amaterial writing with the intent to present and use it toHealthNet in support of a false and fraudulent claim. It isfurther alleged that pursuant to and for the purpose of carryingout the objects and purposes of the conspiracy, one and more ofthe conspirators committed the following overt acts:

OVERT ACT 1

Jeremy Ryan, Mahyar Mohases, Nicholas Reeves, James Frageau andother named and unnamed conspirators ran and operated Nationwideand associated entities that were based out of Orange CountyCalifornia;

ELECTRONICALLY FILEDSUPERIOR COURT OF CALIFORNIA

COUNTY OF ORANGE

05/28/202003:55 PM

DAVID H. YAMASAKI, Clerk of the Court20CF1455

RICHARD THOMAS ROBERTS II OCDA HF18100003 PAGE 2


OVERT ACT 2

Richard Roberts and Reiner Nusbaum ran and operated DiamondRecovery and associated entities which was designated as asubstance abuse treatment center;

OVERT ACT 3

In August, 2015, Roberts and Nusbaum entered into an agreementwith Mohases, Reeves, Frageau, Ryan, and other named and unnamedconspirators whereby they would invest approximately $500,000into Diamond Recovery and associated entities for the completionof a new location and would receive 50% of the net profits inreturn;

OVERT ACT 4

Sometime prior to September 2015, Ryan, Mohases, Reeves, Frageauand other named and unnamed conspirators met with Daniel Murphywho operated a non-profit called "StopB4UStart";

OVERT ACT 6

Ryan, Mohases, Reeves, Frageau and other named and unnamedconspirators agreed to donate funds to StopB4UStart;

OVERT ACT 7

In exchange for these donations, Murphy would use the funds topurchase health insurance policies for clients as directed byRyan, Mohases, Reeves, Frageau and other named and unnamedconspirators;

OVERT ACT 8

Subsequently and on numerous dates, Murphy met with Ryan and/orFrageau in the parking lot of a Chase bank in Orange Countywhere Ryan and/or Frageau provided Murphy with clients healthinsurance subscriber ID numbers and payment amounts;

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OVERT ACT 9

Ryan and/or Frageau directed Murphy to enter the Chase Bank andobtain individual cashier checks payable to Health Net for eachof the names and amounts provided;

OVERT ACT 10

Between September 1st, 2015 and June 30th, 2016, entitiesrelated to Nationwide, Mohases, Ryan, Frageau, Reeves, and othernamed and unnamed conspirators, donated hundreds of thousands ofdollars into StopB4UStart's account;

OVERT ACT 11

A similar agreement was entered into between Ryan, Mohases,Reeves, Frageau and other named and unnamed conspirators andDana Simons who owned and operated Health Care ReliefFoundation, a corporation whose purported purpose was substanceabuse assistance;

OVERT ACT 12

Nationwide and its associated entities were set up as andoperated as a national call center where individuals from allover the country seeking help could call a number and then wereplaced in contact with a Nationwide sales representative;

OVERT ACT 13

Nationwide and its associated entities operated from officeswithin Orange County, California;

OVERT ACT 14

Once sales representatives were in contact with potentialclients, they were instructed on how to communicate with thepotential clients and to inform the potential clients that theycould receive treatment with no charge and that insurance andtransportation could all be paid for;

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OVERT ACT 15

Victim Insurance Company HealthNet has strict residency and openenrollment requirements that must be met before an individualqualifies for health insurance;

OVERT ACT 16

In order to subvert Healthnet's residency and open enrollmentrequirements, Ryan, Mohases, Reeves, Frageau and other named andunnamed conspirators directed sales representatives to fill outhealth insurance applications for potential clients usingfraudulent California home addresses that did not belong to thepotential client and belonged to Nationwide employees,associated entities, or others;

OVERT ACT 17

This information was never disclosed to Health Net;

OVERT ACT 18

Sales representatives and others were paid a per application feefor the allowance of their addresses on potential clients'health insurance applications;

OVERT ACT 19

To further the fraud, Ryan, Mohases, Reeves, Frageau and othernamed and unnamed conspirators would direct that letterspurporting to be from True Recovery, an entity associated withNationwide, intended for Health Net, confirmed that thepotential client was living at the fraudulent address;

OVERT ACT 20

Once the sales representative falsified the fraudulent healthinsurance application, Ryan, Mohases, Reeves, Frageau and othernamed and unnamed conspirators would direct Murphy to purchasecashier's checks using funds given to StopB4UStart to purchasethe health insurance premiums and policies;

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OVERT ACT 21

Nationwide and its associated entities had "marketingagreements" set up with multiple sober living homes andtreatment centers located throughout Orange County and SouthernCalifornia;

OVERT ACT 22

A typical marketing agreement provided that Nationwide and itsassociated entities would receive a kickback of the insurancemoney for each patient that Nationwide placed into thattreatment center;

OVERT ACT 23

As insurance would not pay for that patient's treatment until atypical period of time has passed, the agreement provided thatthe patient needed to remain in treatment before Nationwidewould receive its kickback of the insurance money;

OVERT ACT 24

Nationwide and its associated entities had an agreement withRoberts, Nusbaum, and Diamond Recovery and their associatedentities whereby a kickback was paid by Roberts, Nusbaum andDiamond Recovery and its associated entities to Ryan, Mohases,Reeves, Frageau and other named and unnamed conspirators,Nationwide and its associated entities, in exchange forunlawfully directing patients into their recovery and treatmentcenters;

OVERT ACT 25

Due to the actions of Ryan, Mohases, Reeves, Frageua and othernamed and unnamed conspirators Nationwide, and its associatedentities, obtained fraudulent insurance policies for andtrafficked approximately 441 patients from all over the countryinto 19 different treatment centers;

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OVERT ACT 26

Due to the actions of Ryan, Mohases, Reeves, Frageua and othernamed and unnamed conspirators, Nationwide, its associatedentities, and other named and unnamed Conspirators, Health Netreceived approximately $60 million in fraudulent healthinsurance claims and paid out approximately $12 million infraudulent claims;

OVERT ACT 27

Nusbaum, Roberts, Diamond Recovery and their associated entitieswere responsible for approximately $14 million in fraudulentbilling and fraudulently collected approximately $1.9 millionfrom Health Net.

COUNT 2: On or about and between August 01, 2015 and July 31,2016, in violation of Section 182(a)(1) of the Penal Code(CONSPIRACY TO COMMIT A CRIME), a FELONY, RICHARD THOMAS ROBERTSII and REINER VINCENT NUSBAUM did unlawfully conspire togetherand with Mahyar Mohases, James Frageau, Robert Williams,Nicholas Reeves, Jeremy Ryan, and other named and unnamedconspirators to commit the crime of CONSPIRACY TO COMMIT MEDICALINSURANCE FRAUD, in violation of Section 550(a)(6) of the PenalCode.

It is further alleged that pursuant to and for the purpose ofcarrying out the objects and purposes of the conspiracy, one andmore of the conspirators committed the following overt acts:

OVERT ACT 1


OVERT ACT 2


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OVERT ACT 3


OVERT ACT 4


OVERT ACT 5

They met at Murphy's office located in Orange County,California;

OVERT ACT 6


OVERT ACT 7


OVERT ACT 8

Subsequently and on numerous dates, Murphy met with Ryan and/orFrageau in the parking lot of a Chase bank in Orange Countywhere Ryan and/or Frageau provided Murphy with clients? healthinsurance subscriber ID numbers and payment amounts;

OVERT ACT 9




OVERT ACT 10


OVERT ACT 11


OVERT ACT 12


OVERT ACT 13


OVERT ACT 14


OVERT ACT 15


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OVERT ACT 16


OVERT ACT 17


OVERT ACT 18


OVERT ACT 19


OVERT ACT 20


OVERT ACT 21


/



OVERT ACT 22


OVERT ACT 23

As insurance would not pay for that patient?s treatment until atypical period of time has passed, the agreement provided thatthe patient needed to remain in treatment before Nationwidewould receive its kickback of the insurance money;

OVERT ACT 24


OVERT ACT 25


OVERT ACT 26


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OVERT ACT 27


COUNT 3: On or about and between August 01, 2015 and July 31,2016, in violation of Section 550(b)(3) of the Penal Code(CONSPIRACY TO COMMIT INSURANCE FRAUD), a FELONY, RICHARD THOMASROBERTS II and REINER VINCENT NUSBAUM, with the intent todefraud, did unlawfully conspire with Mahyar Mohases, JamesFrageau, Robert Williams, Nicholas Reeves, Jeremy Ryan, andother named and unnamed conspirators to knowingly conceal andfail to disclose the occurrence of an event and a fact thatwould have the affect on the initial and continued materialright and entitlement of HealthNet to an insurance benefit andpayment, and to the amount of a benefit and payment to whichHealthNet was entitled. It is further alleged that pursuant toand for the purpose of carrying out the objects and purposes ofthe conspiracy, one and more of the conspirators committed thefollowing overt acts:

OVERT ACT 1


OVERT ACT 2


OVERT ACT 3




OVERT ACT 4


OVERT ACT 5


OVERT ACT 6


OVERT ACT 7


OVERT ACT 8

Subsequently and on numerous dates, Murphy met with Ryan and/orFrageau in the parking lot of a Chase bank in Orange Countywhere Ryan and/or Frageau provided Murphy with clients' healthinsurance subscriber ID numbers and payment amounts;

OVERT ACT 9


OVERT ACT 10


/



OVERT ACT 11


OVERT ACT 12


OVERT ACT 13


OVERT ACT 14


OVERT ACT 15


OVERT ACT 16




OVERT ACT 17


OVERT ACT 18


OVERT ACT 19


OVERT ACT 20


OVERT ACT 21


OVERT ACT 22


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OVERT ACT 23


OVERT ACT 24


OVERT ACT 25


OVERT ACT 26


OVERT ACT 27


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COUNT 4: On or about and between August 01, 2015 and July 31,2016, in violation of Section 182(a)(1) of the Penal Code(CONSPIRACY TO COMMIT A CRIME), a FELONY, RICHARD THOMAS ROBERTSII and REINER VINCENT NUSBAUM did unlawfully conspire togetherand with Mahyar Mohases, James Frageau, Robert Williams,Nicholas Reeves, Jeremy Ryan, and other named and unnamedconspirators to commit the crime of FALSE AND FRAUDULENT CLAIM,in violation of Section 549 of the Penal Code.

It is further alleged that pursuant to and for the purpose ofcarrying out the objects and purposes of the conspiracy, one andmore of the conspirators committed the following overt acts:

OVERT ACT 1


OVERT ACT 2


OVERT ACT 3


OVERT ACT 4


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OVERT ACT 5


OVERT ACT 6


OVERT ACT 7


OVERT ACT 8

Subsequently and on numerous dates, Murphy met with Ryan and/orFrageau in the parking lot of a Chase bank in Orange Countywhere Ryan and/or Frageau provided Murphy with clients' healthinsurance subscriber ID numbers and payment amounts;

OVERT ACT 9


OVERT ACT 10


OVERT ACT 11




OVERT ACT 12


OVERT ACT 13


OVERT ACT 14


OVERT ACT 15


OVERT ACT 16


OVERT ACT 17


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OVERT ACT 18


OVERT ACT 19


OVERT ACT 20


OVERT ACT 21


OVERT ACT 22


OVERT ACT 23


/



OVERT ACT 24


OVERT ACT 25


OVERT ACT 26


OVERT ACT 27


OTHER ALLEGATION(S)

As to Count(s) 1, 2, 3 and 4, it is further alleged pursuant toPenal Code section 1203.045(a) (OVER $100,000 LOSS), thatdefendants RICHARD THOMAS ROBERTS II and REINER VINCENT NUSBAUMcommitted the crime of theft of an amount exceeding one hundredthousand dollars ($100,000).

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As to Count(s) 1, 2, 3 and 4, it is further alleged pursuant toPenal Code sections 803(c)/801.5 (STATUTE OF LIMITATION TOLLED),that the offense of 550(a)(5) PC CONSPIRACY TO COMMIT FRAUDULENTWRITTEN CLAIM TO INSURANCE COMPANY, 550(a)(6) PC CONSPIRACY TOCOMMIT MEDICAL INSURANCE FRAUD, 550(b)(3) PC CONSPIRACY TOCOMMIT INS FRAUD-- FAIL TO DISCLOSE EVENT MATERIAL TO BENEFIT,549 PC FALSE AND FRAUDULENT CLAIM is a felony which had amaterial element of fraud and breach of fiduciary obligation,and no victim of the offense and no law enforcement agencychargeable with the investigation and prosecution of the offensehad actual or constructive knowledge of the offense prior to thedate of September 1, 2016, when it was discovered by Health NetInvestigators by means of investigation; and the offense was notdiscovered earlier because Health Net was not aware of the frauduntil September 1, 2016.

ENHANCEMENT(S)

It is further alleged pursuant to Penal Code section 186.11(a)(1)/(2) (AGGRAVATED WHITE COLLAR CRIME - OVER $500,000), that asto counts 1, 2, 3 and 4, defendants RICHARD THOMAS ROBERTS IIand REINER VINCENT NUSBAUM engaged in a pattern of relatedfraudulent felony conduct involving the taking of more than fivehundred thousand dollars ($500,000).

I declare under penalty of perjury, on information and belief,that the foregoing is true and correct.

Dated 05-28-2020 at Orange County, California. JB/AC 20F05157

TODD SPITZER, DISTRICT ATTORNEY

by: /s/ JAMES BILEKJAMES BILEK, Deputy District Attorney

RESTITUTION CLAIMED

[ ] None[ ] $________[ X ] To be determined

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BAIL RECOMMENDATION:

RICHARD THOMAS ROBERTS II - $ 250,000.00REINER VINCENT NUSBAUM - $ 250,000.00

NOTICES:

The People request that defendant and counsel disclose, within15 days, all of the materials and information described in PenalCode section 1054.3, and continue to provide any later-acquiredmaterials and information subject to disclosure, and withoutfurther request or order.

Pursuant to Welfare & Institutions Code §827 and California Ruleof Court 5.552, notice is hereby given that the People will seeka court order to disseminate the juvenile case file of thedefendant/minor, if any exists, to all parties in this action,through their respective attorneys of record, in the prosecutionof this case.

richard roberts reiner nusbaum complaint

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