South Florida

Federal trial amid coronavirus outbreak ends in guilty verdicts for South Florida man

For six weeks, a federal jury patiently listened to testimony by dozens of witnesses in a South Florida businessman’s healthcare fraud trial as the coronavirus crisis raged in the background.

Midway, one of the jurors in Fort Lauderdale federal court even had to be hospitalized for a prior medical condition. She tested negative for the viral infection, COVID-19, but was replaced by an alternate.

Defendant Sebastian Ahmed’s attorney, Joel Hirschhorn, then sought a mistrial or recess in the trial, citing the coronavirus outbreak, but was rebuffed by U.S. District James Cohn, who polled the jurors several times to see if they wanted to stick it out. They did.

In the end, a 12-person jury hung together to reach a verdict on Tuesday afternoon and found Ahmed, 42, of Delray Beach, guilty of leading a multimillion-dollar healthcare fraud conspiracy along with multiple counts of fraud and money laundering. The jury, which began deliberations on Monday, took 1 1/2 days to convict Ahmed of 18 of 23 counts in the indictment, accusing him of fleecing healthcare insurers while exploiting patients with drug addictions at his chain of treatment centers and “sober homes” in South Florida.

Ahmed, who was already being detained without a bond, faces 20 years or more in prison at his sentencing on Aug. 6.

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His federal trial may be the last for a while in South Florida. Because of the coronavirus pandemic, the district’s chief federal judge ordered no new trials through the end of April.

According to trial evidence, Ahmed lured hundreds of young adults addicted to painkillers, heroin and other drugs to live in his “sober homes” in several Broward communities while failing to provide them with proper treatment for substance abuse at his chain of “Serenity” clinics. Ahmed and his brother, Ali Ahmed, who pleaded guilty before trial, bilked major private insurers such as Aetna, Cigna and Blue Cross Blue Shield for the purported treatment costs at their facilities in Broward under a provision of the Affordable Care Act.

The Ahmed brothers, assisted by two clinical directors, falsified paperwork for claims and paid kickbacks to patients while collecting more than $6 million from the private insurers over three years, according to prosecutors Christopher Clark and Lisa Miller. Sebastian Ahmed, the CEO and co-owner of three treatment centers based in Davie, pocketed about half of that money, they said.

Overall, the Ahmed brothers’ treatment centers, Medi MD, Jacob’s Well and Amica Health, “fraudulently” filed claims with Blue Cross Blue Shield and the other private health insurers that totaled about $38 million between June 2016 and May 2019, according to trial evidence.

At trial, three Serenity patients testified that they never attended group therapy sessions at the treatment centers and neither did the majority of other patients.

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One patient said she was prescribed Benzodiazepine (Ativan) for her opioid and heroin addiction problem and became addicted to that drug and suffered even greater withdrawals. Another patient from New York said he was paid money by the Serenity owners to recruit other patients from the Northeast.

The mother of one patient from Las Vegas testified that her daughter had never previously abused drugs and was lured to one of Ahmed’s sober homes when he paid for her flight and rent. The daughter then became addicted to heroin, and her treatment at Serenity cost $115,000, according to the mother’s testimony. The mother instigated the federal investigation by tipping off the FBI about Serenity’s wrongdoing.

In his defense, Sebastian Ahmed, who has a B.S. degree in economics and business administration from Florida State University, testified that he relied upon legal advice that he could offer patients free incentives such as air travel, rent and cash. Ahmed said his understanding was that it was lawful because the patients lacked financial resources.

Ahmed also testified that he was unaware that the clinical directors at the three treatment centers falsified patients’ progress notes to justify insurance claims — though they contradicted his testimony as trial witnesses.

Ahmed also testified that he was unaware that his brother — who filed for bankruptcy after he was found liable of stealing confidential information in a lawsuit brought by his former employer, Kaplan University — received kickback payments from detoxification centers and lab-testing facilities totaling $540,000.

In January, the brother, Ali Ahmed, 38, the former operations director and co-owner of Medi MD, was sentenced to 10 years in prison and ordered to pay $4.2 million in restitution to the private health insurers. Prosecutors said Ali Ahmed impregnated a woman with a heroin addiction who was living in a “Serenity” sober home and plied her with the drug. When their child was born, he tested positive for heroin and other drugs.

Also sentenced were the two clinical directors who worked for the Ahmed brothers: Hector Efrain Alvarez, 49, and Mauren Morel, 45, who both received prison sentences of roughly 2 1/2 years. Alvarez was ordered to pay about $3.9 million and Morel $320,000 to the private health insurers for their losses.

Both clinical social workers testified at Sebastian Ahmed’s trial, saying the defendant directed them to prepare fake progress notes to support fraudulent billing for daily group therapy sessions that patients did not attend.

An expert witness for the government, Dr. Kelly Clark, a clinical psychiatrist, also testified that Serenity’s treatment centers prescribed inappropriate and potentially dangerous drugs to patients.

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