Julio De La Cruz, Medicaid and Social Security Scam, AK 2023

Anchorage, Alaska — Julio De La Cruz, 53, is headed to federal prison for duping Alaska’s Medicaid program and the U.S. Social Security Administration out of more than $100,000 in taxpayer funds. De La Cruz was sentenced yesterday by Chief U.S. District Judge Timothy M. Burgess to serve 10 months for each fraud scheme, with sentences to run concurrently. He will also serve three years of supervised release and must pay full restitution: $64,000 to the State of Alaska Medicaid Program and $37,000 to the Social Security Administration.

The Medicaid scam revolved around falsified timesheets submitted for personal care assistant (PCA) services that were never rendered. The PCA program, designed to help elderly and permanently disabled Alaskans live at home, covers essential services like bathing, dressing, and grocery shopping. But De La Cruz and a network of co-conspirators submitted paperwork claiming services were provided while travel records proved either the care recipients or providers were out of the country — making the claims impossible.

Assistant U.S. Attorney Joseph Bottini laid out how the fraud worked: De La Cruz coordinated with others to submit bogus timesheets for PCA payments, exploiting a trust-based system meant to support Alaska’s most vulnerable. The Medicaid program relies on honest reporting, and De La Cruz’s actions didn’t just steal money — they undermined a lifeline for people who depend on in-home care to avoid institutionalization.

In a separate but equally brazen scheme, De La Cruz admitted to helping funnel Supplemental Security Income (SSI) payments to an individual who was not living in the United States. SSI benefits are strictly for U.S. residents with limited income and resources. By falsifying residency, De La Cruz triggered payouts that should never have been approved — stealing $37,000 from a federal safety net program.

Judge Burgess didn’t mince words at sentencing. He emphasized that programs like Medicaid and Social Security function only because of public trust. When individuals like De La Cruz exploit that trust, the entire system erodes. A prison sentence, Burgess stated, is necessary to send a clear message: defrauding social services won’t be met with a slap on the wrist.

The investigation was a coordinated effort by the State of Alaska Medicaid Fraud Control Unit, the U.S. Social Security Administration’s Office of Inspector General, Homeland Security Investigations, and the FBI. U.S. Attorney Karen L. Loeffler praised the agencies for their work in holding De La Cruz accountable. ‘These programs exist to protect the vulnerable,’ Loeffler said. ‘Those who steal from them will be prosecuted to the fullest extent of the law.’

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