Terry Johnson Sentenced in $1.1M Medicare Fraud Scheme

Terry Johnson, 43, of Hamilton, Ohio, is going to federal prison for running a seven-year health care fraud and money laundering scheme that bled Medicare and Medicaid of more than $1.4 million. The ambulance company owner was sentenced to 24 months in U.S. District Court after pleading guilty to charges tied to fraudulent billing through his operation, Community Angels Ambulance Service, LLC.

Johnson, who also operated Starlite Transportation, exploited the medical transport system by submitting false claims for ambulance and ambulette services between 2007 and 2012. Prosecutors say approximately $1.1 million in fake claims were sent to Medicare under the Community Angels name, while Medicaid lost over $354,000 due to fraudulent billing from both companies. The scheme relied on ghost runs—trips that never happened—and inflated service logs to siphon government funds.

The sentence was handed down today by U.S. District Judge Michael R. Barrett in Cincinnati. Johnson must also file amended personal and corporate income tax returns with the IRS for the years 2008 through 2011, a move indicating deeper financial misconduct beyond the health care fraud charges.

Benjamin C. Glassman, U.S. Attorney for the Southern District of Ohio, called the fraud a betrayal of taxpayer trust. He was joined in the announcement by Troy N. Stemen, Acting Special Agent in Charge of IRS Criminal Investigation; Lamont Pugh, Special Agent in Charge of HHS-OIG; and Ohio Attorney General Mike DeWine. All credited a joint investigation that peeled back layers of financial deception.

The probe was led by the IRS, HHS-OIG, and the Ohio Attorney General’s Medicaid Fraud Control Unit. Their collaboration exposed how Johnson manipulated billing codes, falsified patient records, and laundered the illicit proceeds through corporate and personal accounts to hide the source of the money.

Assistant United States Attorney Timothy Mangan prosecuted the case for the federal government. Johnson’s 24-month sentence underscores the federal crackdown on health care fraud, particularly schemes targeting vulnerable patients and overstretched public programs. The case remains a stark warning to those who exploit medical necessity for profit.