A man from Chula Vista has entered a guilty plea for his role in a scheme that defrauded Medicare out of millions. Fernando Valenzuela Ayub, a 48-year-old local business owner, admitted to conspiring to launder health care fraud proceeds of up to $51 million and to paying illegal kickbacks as part of an elaborate corruption of the Medicare system. This development was reported following statements from the U.S. Attorney's Office.
According to court documents, Valenzuela and his accomplices operated several durable medical equipment (DME) companies, ostensibly selling orthotics, including back, wrist, and knee braces, to Medicare beneficiaries. However, Valenzuela confessed to paying approximately $3.7 million in kickbacks to fraudulent marketing companies in exchange for sham prescriptions. The scheme was designed to deceive and actively funnel ill-gotten gains away from taxpayer-funded healthcare aid. He admitted to strategically moving billings to DME companies under false ownership, even after his original companies were barred from Medicare invoicing, to secretly control the flow of funds.
The U.S. Attorney's Office, citing Valenzuela's plea agreement, has provided details that his actions forced Medicare to issue roughly $20 million in payments, of which he laundered at least $14 million. Reflecting the seriousness of his crimes, Valenzuela has agreed to forfeit over $7 million. The case, led by Assistant U.S. Attorney Blanca Quintero of the Southern District of California, is set against increased scrutiny of Medicare fraud nationwide. Valenzuela is scheduled for sentencing on August 15, 2025, potentially facing a maximum sentence of twenty years in prison and a $500,000 fine for the charges of money laundering conspiracy.
Investigations were carried out by the Federal Bureau of Investigation and the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG).
