MIAMI-DADE, FL — Eduardo Arango Chong, 21, of Hialeah, Florida, was arrested November 15, 2016, and charged with conspiracy to commit health care fraud in connection with a multimillion-dollar scheme to defraud insurance companies through fake medical clinics in New Jersey. The operation, run like a criminal franchise, used stolen identities and ghost billing to pocket hundreds of thousands in illicit payments.
Chong, appearing before U.S. Magistrate Judge Cathy L. Waldor in Newark federal court, faces up to 10 years in prison and a $250,000 fine, or twice the gross gain or loss from the offense. He is charged alongside Osmaro Ruiz, 31, of Homestead, Florida, who remains at large. A third conspirator, Raymel Betancourt, 25, was separately charged in June 2015 with health care fraud in the same scheme.
Between September 2014 and June 26, 2015, the defendants allegedly set up phantom medical providers in Union County, New Jersey, and filed false claims for services—including injections and physical therapy—that never occurred. The fraudulent network submitted over $6 million in bogus claims. Insurance companies paid out hundreds of thousands before investigators pulled the thread.
The conspirators recruited individuals with legitimate health insurance, paying them cash to use their policy information. They also scoured electronic healthcare networks, brute-forcing valid member IDs by cycling through sequences until they found active accounts. These identities were then exploited to file claims without the victims’ knowledge.
Insurance payouts were funneled into bank accounts controlled by the defendants. Checks were cashed or deposited, laundering the proceeds of a scheme built on deception, identity theft, and systemic exploitation of medical billing systems. The operation reveals how porous healthcare verification networks can be hijacked by organized fraud rings.
The investigation was led by the U.S. Postal Inspection Service and the FBI, with assistance from the U.S. Attorney’s Office in New Jersey. Assistant U.S. Attorney Karen D. Stringer is prosecuting the case. Since 2010, the office has recovered over $1.29 billion in fraud-related judgments under the False Claims Act and other statutes. The charges are accusations; all defendants are presumed innocent until proven guilty.
Related Federal Cases
- Thomas Farese, Domenic Gatto Jr. Indicted in $25M Health Care Fraud · New Jersey
- Farese and Gatto Face Multimillion-Dollar Health Care Fraud Charges · New Jersey
- Florida Man Sentenced 96 Months for $11M Health Care Kickback Scheme · New Jersey
- Coral Springs Scammer Sentenced for $11M Health Care Kickback Scheme · New Jersey
- Phan and Tran Sentenced in $330,000 Cell Phone Fraud Scheme · New Hampshire
Key Facts
- State: New Jersey
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
🔒 Get the grimiest stories delivered weekly. Subscribe free →
Browse More
MORE FEDERAL CRIME NEWS
US NewsUS NewsUS NewsUS News