Fernando Valenzuela Ayub, a business owner from Chula Vista, has entered a guilty plea in federal court for his role in a substantial Medicare fraud scheme. He admitted to conspiring with others to launder millions of dollars obtained through health care fraud and engaging in illegal kickback activities.
The plea agreement details how Valenzuela, along with co-conspirators, managed multiple durable medical equipment (DME) companies that provided orthotics like back, wrist, and knee braces to Medicare beneficiaries. Valenzuela acknowledged paying $3.7 million in unlawful kickbacks to sham marketing companies that issued fake prescriptions for DME.
Valenzuela also confessed to submitting fraudulent claims to Medicare using his DME businesses. After these companies were suspended from billing Medicare, he allegedly conspired to register new DME firms under different names while retaining control over the operations and funds received from Medicare. In total, Valenzuela billed approximately $51 million to Medicare and was paid about $20 million. He reportedly laundered at least $14 million of these proceeds. As part of the plea deal, he agreed to forfeit $7,101,320.
His sentencing is set for August 15, 2025. Assistant U.S. Attorney Blanca Quintero of the Southern District of California is prosecuting the case.
Valenzuela faces charges of money laundering conspiracy under Title 18 U.S.C., Section 1956(h), which carries a maximum penalty of twenty years in prison and a $500,000 fine.
The investigation was conducted by the Federal Bureau of Investigation and the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). It is important to note that charges contained in an indictment or complaint are accusations; defendants are considered innocent until proven guilty.
