$12.7M Medicaid ‘egregious scheme’ in NC used gift cards to lure patients — learn how fraud undermines health care and how to protect yourself

The case involved four people connected to Life Touch LLC, a purported substance-abuse treatment provider operating in Kinston and Goldsboro. Investigators say the facility billed the North Carolina Medicaid program for services while offering patients gift cards and other incentives to show up for appointments. The arrangement allowed the operation to generate millions in claims to the taxpayer-funded health program.

“These defendants orchestrated an egregious scheme involving illegal kickbacks, placing greed above patient care. Fraudulent operations like this undermine the availability of federal health care program funds intended to support millions of beneficiaries,” said Special Agent in Charge Kelly Blackmon of the U.S. Department of Health and Human Services Office of Inspector General (2).

For taxpayers and patients, cases like this raise a bigger concern: where does the money go when fraud happens in the health care system? Understanding who is behind the schemes helps show how these scammers work and why authorities say they’re difficult to uncover.

Who ran the scheme

Court records show Keke Komeko Johnson, Francine Sims Super, Brandon Eugene Sims and Kimberly Mable Sims quarterbacked the operation. Prosecutors said Johnson and Super coordinated the kickback payments from 2018 through 2023 and falsified records during Medicaid audits. Both were sentenced to six years in federal prison.

Kimberly Sims received two years, while Brandon Sims was sentenced to 30 months after pleading guilty to failing to file federal tax returns tied to income generated through the business. The scheme generated significant profits for those involved.

During the investigation, federal agents seized $1.3 million in cash along with luxury assets including a Rolls-Royce Cullinan, a Chevrolet Corvette and a Chevrolet Silverado.

The case highlights the broader financial toll that health care fraud can place on public programs. According to the National Health Care Anti-Fraud Association (3), health care fraud costs the United States tens of billions of dollars each year.

“That’s probably a conservative number,” Omar Pérez Aybar, special agent in charge, said of the estimate (4). “When we think about all lines of business in Medicare and Medicaid, that’s probably a drop in the bucket.”

More broadly, health care fraud is believed to cost the United States tens of billions of dollars annually, with some estimates suggesting losses could reach as much as 10% of total health care spending.

Since Medicaid is funded jointly by federal and state governments, fraudulent claims ultimately draw from taxpayer-funded health care budgets, diverting resources away from programs designed to support low-income patients and other vulnerable populations.

“Fraud against our health care and tax systems is a crime and betrays public trust,” Donald "Trey" Eakins, Special Agent in Charge of IRS Criminal Investigation's Charlotte Field Office, said in a press release (5). “Tax evasion depletes resources intended for those in need and compromises our communities.”

The effects of health care fraud on patients and insurers

Health care fraud can ripple through the system and ultimately affect consumers. Experts say fraudulent billing contributes to higher insurance premiums and more expensive medical services, adding to overall health care spending.