SANTA ANA, Calif.—A 33-year-old Temecula man has pleaded guilty and is expected to be sentenced to two years behind bars next year for his part in an alleged multi-million dollar kickback scheme involving a sober-living facility in Orange County, according to court records obtained on Sept. 18.
James Frageau pleaded guilty on Sept. 13 to a felony count of making a fraudulent claim for a health benefit. As part of his plea deal, multiple other felonies for making false or fraudulent claims and money laundering were dismissed along with sentencing enhancements for aggravated white collar crime exceeding $500,000.
Mr. Frageau, who is scheduled to be sentenced on March 13, is expected to recieve to two years in prison and be ordered to pay $11.7 million in restitution, according to court records.
Co-defendants Steven Lomonaco, 65, Mahyar “Christian” Mohases, 40, of Santa Ana, Nocholas Reeves, 45, of Aliso Viejo, and Robert Williams, 44, of Murrieta, await trial on multiple insurance fraud and money laundering charges.
Mr. Lomonaco’s attorney, Jack Earley, said in 2020 when his client had been charged that he was involved in civil litigation, which was settled.
“His position has been these were referral fees, which are fairly common in that industry,” Mr. Earley said.
Prosecutors allege that Mr. Mohases, Mr. Frageau, Mr. Williams, and Mr. Reeves recruited nationwide for patients with addictions to sober up at Casa Bella International Inc., which Mr. Lomonaco owned and operated.
Mr. Lomonaco is accused of paying up to $10,000 per patient if they stayed at the sober living facility for more than a month.
“Instead of helping these patients, these individuals preyed on extremely susceptible people and exploited their addictions for profit,” Orange County District Attorney Todd Spitzer alleged.
Mr. Spitzer said his prosecutors and the state’s Department of Insurance were “cracking down on these criminals and their predatory operations in order to protect substance abuse patients from unknowingly being trafficked, as well as protect their loved ones and insurance companies from these unscrupulous operators.”
Prosecutors allege the defendants used a nonprofit organization to launder money used to pay insurance premiums.
