Rehab Racket 2: Dept. of Public Health photo

The state Department of Health Care Services has primary responsibility for safeguarding the Medi-Cal program against fraud. It took over Drug Medi-Cal in 2012.CNN

A drug rehab clinic in Los Angeles was shut down after a criminal investigation found Medi-Cal fraud. Another, in Riverside County, continued to flourish, reaping increasing amounts of taxpayer money.

The two clinics have the same name and the same leaders – one of them now a fugitive.

In 2009, state prosecutors charged Godday Imakavar and Japhet Ifejoku with fraud in connection with $33,700 in bogus bills over five months at Immaculate Care Center on Wilshire Boulevard, not far from downtown Los Angeles.

State Justice Department investigators found teenage clients there were instructed to sign multiple attendance documents in one sitting to help the agency pad its bills in 2006. Investigators also discovered fake clients, including one teen who said she was locked up in a probation camp when bills were submitted in her name.

Los Angeles County cut the clinic’s contract in 2009, and the following year, Imakavar was convicted of submitting false bills to Medi-Cal. He paid fines and fees and was sentenced to probation. Because of his conviction, he was banned from billing Medi-Cal.

Ifejoku never faced those same charges. He remains a wanted fugitive, according to Mark Zahner, chief of Medi-Cal fraud prosecutions for the Justice Department.

The fraud court case clearly identified Imakavar and Ifejoku as executives of the Riverside County business – but it seems no one thought to tell Riverside the details. Informed of Imakavar’s place on the Medi-Cal blacklist, Karen Kane, Riverside County’s substance abuse program administrator, said: “Wow. No, we didn’t know.”

Regardless, Kane said her county has to contract with any Drug Medi-Cal clinic that the state certifies. And even after prosecutors secured a conviction in the fraud case, state regulators did not strip either Immaculate Care location of its certification.

Karen JohnsonKaren Johnson – Chief deputy director of the California Department of Health Care Services since 2007, with oversight of anti-fraud audits and investigations., chief deputy director of the state Department of Health Care Services, would not comment on specific cases. But she said her agency now is checking blacklisted providers and suspending people on that list who are still operating.

Imakavar told The Center for Investigative Reporting that he no longer works at Immaculate Care and referred all other questions to Los Angeles attorney Joseph Benincasa.

“I know that he still has a relationship with the company, but I don’t know the details of it,” Benincasa said.

Documents submitted to the state last year listed Imakavar as board president of the Moreno Valley clinic. The organization’s tax filings say he worked 75 hours a week there in 2011.

Meanwhile, although the state considers Ifejoku a fugitive, his signature appears on a July 2012 one-year contract for $620,000 with Riverside County, which relies on Immaculate Care to provide counseling to teens.

Riverside County confirmed that Ifejoku remains the organization’s executive director.

CNN senior investigative producer Scott Zamost, CNN investigative correspondent Drew Griffin, CIR reporter Joanna Lin, CIR intern Mihir Zaveri and Stephen K. Doig, Knight Chair in Journalism at Arizona State University, contributed to this report. This story was edited by Amy Pyle, Robert Salladay and Mark Katches, with contributions from Richard T. Griffiths of CNN. It was copy edited by Nikki Frick and Christine Lee. 

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Christina Jewett is a reporter for Reveal, covering labor and workplace issues with a focus on the workers' compensation system. With reporting partner Will Evans and CNN, she exposed widespread fraud and failed government oversight of California’s network of addiction treatment centers for the poor. The stories led to the defunding of more than 200 rehab clinics and changes in state law. The Emmy-nominated series won the 2013 broadcast award from Investigative Reporters and Editors. Jewett – as part of California Watch, a project of The Center for Investigative Reporting – won the 2011 George Polk Award for medical reporting with Lance Williams and Stephen K. Doig. The series exposed outsized rates of rare but lucrative medical conditions at a rapidly growing hospital chain and spurred a federal investigation. She was also a Livingston Award finalist in 2010. Previously, Jewett worked at ProPublica and The Sacramento Bee, where a story she broke about contracting malfeasance led to arrests and convictions. She and a colleague also chronicled jail abuse and medical mistreatment, spurring countywide policy reforms. Those stories were honored with awards from the John Jay College of Criminal Justice and the National Council on Crime and Delinquency. Jewett is based in Sacramento, California.

Will Evans is a senior reporter and producer for Reveal, covering labor and tech. His reporting has prompted government investigations, legislation, reforms and prosecutions. A series on working conditions at Amazon warehouses was a finalist for a Pulitzer Prize and won a Gerald Loeb Award. His work has also won multiple Investigative Reporters and Editors Awards, including for a series on safety problems at Tesla. Other investigations have exposed secret spying at Uber, illegal discrimination in the temp industry and rampant fraud in California's drug rehab system for the poor. Prior to joining The Center for Investigative Reporting in 2005, Evans was a reporter at The Sacramento Bee. He is based in Reveal's Emeryville, California, office.