Lawsuit: Raymondville mental health facility filed $111 million in false medical claims

“La Jarra residents’ public assistance paid for their housing while IBH’s owners and operators pocketed Medicaid benefits for treatment that was never provided,” the lawsuit reads.

The federal government has filed a forfeiture lawsuit against a Raymondville-based mental health service provider that fraudulently billed Medicaid for millions of dollars in services that it never provided, federal court documents reflect.

The lawsuit states that Brandy Castillo, who organized Inspired Behavioral Health on La Jarra Ranch, hired unqualified family and friends to operate the mental health facility that she believed would not alert authorities to her fraudulent acts.

Named in the lawsuit is Inspired Behavioral Health, its board members, and associated individuals and entities. The lawsuit was filed last week in federal court.

According to the lawsuit, Castillo organized Inspired Behavioral Health on Aug. 22, 2017, and “purported a mental health facility in Raymondville, Texas, known as La Jarra Ranch.”

The mental health facility was to provide services to those suffering from mental health issues and a positive living environment.

La Jarra Ranch lobbied Cameron and Fort Bend counties officials “to divert arrested persons with mental illness to IBH’s care for treatment,” the lawsuit states.

Cameron County sent its first arrestees to La Jarra Ranch in August 2018, where they agree to received treatment in lieu of jail time, the lawsuit states.

Cameron County paid IBH a daily fee per resident for inpatient and outpatient services from 2018 to 2022.

The lawsuit said Castillo and other associated with IBH “preyed on vulnerable mental health patients, leaching away their public assistance, scammed Cameron County and fraudulently billed Medicaid approximately $111 million for mental health care IBH never did, nor intended to provide.”

Although IBH billed Medicaid as if they were the leading provider of mental health services in the state of Texas, they never were, the lawsuit reads.

IBH was the highest mental health billing provider in Texas although it only housed 59 patients, according to the lawsuit.

“From August 2018 to July 2022, IBH submitted claims totaling approximately $111,481,167.00 to Medicaid, an average of $1.8 million per patient…The vast majority of, if not all claims, submitted to IBH Medicaid were false and fraudulent,” the lawsuit reads.

The lawsuit states in contrast to the mental health treatment billed to Medicaid, patients at La Jarra Ranch received little to no treatment for their mental illnesses. They would at times receive virtual 15-minute counseling sessions by licensed medical professionals and 30-minute group “activity” sessions held twice weekly with staff but with no one with medical credentials.

IBH was also billing care for patients that were no longer at the facility.

The lawsuit also states IBH targeted patients to exploit their public assistance benefits. They would “require residents to sign over their social security benefits, food stamps and other benefits to pay for room and board.

“La Jarra residents’ public assistance paid for their housing while IBH’s owners and operators pocketed Medicaid benefits for treatment that was never provided,” the lawsuit reads.

Castillo organized a structure of mostly overpaid and unqualified “yes-men and-women, which consisted of friends, family, love interests, and significant others who Castillo believed would not alert authorities to her con, according to the lawsuit. Most of these individuals held overly generous job titles and rarely worked,” because IBH only had 59 patients.

Castillo and Robin Matheaus, the former vice president of IBH and founding board member, are accused of creating a web of bank accounts to “conceal and disguise the nature, location, source, ownership, and /or control of the Medicaid funds,” the lawsuit reads.

Castillo and Matheaus, “also used this web to siphon funds for themselves. At the time of seizure, only $2,899,057, 59 out of the $39,923,095 Medicaid-derived funds remained.”

According to the lawsuit, Castillo and others associated with IBH purchased and maintained real estate properties with proceeds traceable to the “alleged criminal scheme and property involved in money laundering. Some of these properties constitute the defendant real property subject to forfeiture.”

The lawsuit does not contain any contact information for Castillo or IBH. A telephone number for IBH was not in service.

A pretrial hearing is scheduled for July 11 before U.S. District Court Judge Rolando Olvera Jr.