A 33-year-old man from Temecula, known as James Frageau, has pleaded guilty to his involvement in a multi-million dollar kickback scheme related to a sober-living facility in Orange County. As per court records obtained on Monday, he is expected to be sentenced to two years in prison next year.
Frageau pleaded guilty to a felony count of making a fraudulent claim for a health benefit. In exchange for his plea, several other felony charges, including making false or fraudulent claims and money laundering, were dismissed. Additionally, sentencing enhancements for aggravated white collar crime exceeding $500,000 were also dropped.
The sentencing for Frageau is scheduled for March 13. It is anticipated that he will be sentenced to two years in prison and ordered to pay $11.7 million in restitution, as stated in court records.
Meanwhile, Steven Lomonaco, aged 65, Mahyar “Christian” Mohases, aged 40 and residing in Santa Ana, Nocholas Reeves, aged 45 and residing in Aliso Viejo, as well as Robert Williams, aged 44 and residing in Murrieta, will await trial on various charges of insurance fraud and money laundering.
Jack Earley, Lomonaco’s attorney, stated in 2020 that his client was involved in civil litigation, which was subsequently resolved.
“His argument has been that these were referral fees, which are quite common in the industry,” Earley explained.
Prosecutors claim that Mohases, Frageau, Williams, and Reeves recruited individuals nationwide who were struggling with addiction to stay at Casa Bella International Inc., a sober living facility owned and operated by Lomonaco.
According to the allegations, Lomonaco paid up to $10,000 per patient who stayed at the facility for over a month.
“Instead of assisting these patients, these individuals took advantage of vulnerable individuals and profited from their addictions,” stated Todd Spitzer, the Orange County District Attorney.
Spitzer added that his prosecutors, along with the state’s Department of Insurance, are determined to crack down on these criminals and their unethical operations. Their aim is to protect substance abuse patients from being unknowingly exploited and to safeguard their loved ones and insurance companies from such unscrupulous operators.
Prosecutors further allege that the defendants used a nonprofit organization to launder money for paying insurance premiums.
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