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Boston, Massachusetts – The U.S. Attorney’s Office (USAO) and the Massachusetts Attorney General (AG) have filed a joint complaint alleging that Regalcare and its consulting partner, Stern Therapy Consultants (STC), orchestrated a multimillion-dollar Medicare and Medicaid billing fraud scheme.
According to the complaint, both STC and Regalcare submitted inflated reimbursement claims for therapy services between 2017 and 2023—billing for treatments that were either unnecessary or never provided.
The filing further claim that STC-employed medical staff at Regalcare resisted administering these “sometimes painful” procedures, as described by U.S. Attorney Leah Foley. In response, STC allegedly threatened these employees with termination and even posted a job advertisement to replace one who resigned over ethical concerns.
Specifically named as conspirators are the CEO and owner of Regalcare Eliyahu Mirlis—An Orthodox Jew—and Regalcare executive Hector Caraballo—who appears to be of Black Hispanic descent.
The co-complainants seek damages and reimbursement for what they allege are fraudulent charges to socialized healthcare programs.
While some unnecessary procedures were reportedly performed, the extent of services that were never provided or certified by unqualified individuals remains unclear. Additionally, some allegations claim that medical staff credentials were misused by unauthorized individuals.
According to one alarming claim in the complaint, an occupational therapist noted that an 82-year-old female patient was “very fatigued” and experiencing dizziness that day.
Despite these concerns, the patient was given 45 minutes of occupational therapy and died the next day. The complaint later described the $4,700 in billed rehabilitation services as “medically unreasonable and unnecessary.”
In a separate incident, the U.S. Attorney’s Office, Massachusetts Attorney General, and others describe an alleged act of retaliation by STC against an employee who refused to prescribe physical therapy sessions she believed were unnecessary.
Despite threats of termination, she documented her concerns in the patients’ records, allegedly prompting STC to advertise for her replacement. The employee ultimately resigned from STC.
Mirlis maintains a significant presence on business-oriented social media. By cross-referencing various accounts, the Justice Report obtained several photos of him, along with detailed biographies.
One biography characterizes Mirlis as “one of the wealthiest men in the world,” although this claim remains unverified. It also highlights his frequent donations to Jewish causes.
According to the co-complainants, Mirlis controls at least 19 skilled nursing facilities through Regalcare, emphasizing both his financial power and influence. Mirlis' biography also notes other sources of income, including “venture capital, private equity, and real estate.”
Caraballo is also named in the complaint as a co-conspirator. His LinkedIn profile lists him as “VP of Clinical Reimbursment [sic]/ MDS [Minimum Data Set (MDS)] for RegalCare Management Group.”
He is accused of manipulating MDS codes to artificially inflate Regalcare’s revenue. In addition to his executive role, Caraballo is a licensed practical nurse.
While STC is officially named in the complaint, individual members of its leadership are not listed as defendants, though some are referenced in various accounts.
The organization was founded by Tzali Stern, an Orthodox Jew frequently seen wearing a yarmulke in the company’s Facebook posts.
According to the U.S. Government Accountability Office, over $100 billion in “improper payments” were recorded in 2023 across Medicaid and Medicare—amounts paid incorrectly or that should not have been made at all.
Yet despite widespread fraud in Medicaid and Medicare, the Trump administration has reduced resources for prosecuting white-collar crime, continuing a trend that has persisted for decades.
Instead, a budget resolution passed by the Republican-controlled Congress directs the House Energy and Commerce Committee to find at least $880 billion in cuts between the 2025 and 2034 fiscal years, a measure that could lead to the removal of millions of people from Medicaid.
According to the Kaiser Family Foundation, nearly one in five White Americans ages 0–64 depended on Medicaid for insurance in 2023.
Medicaid and Medicare fraud schemes are disproportionately orchestrated by non-White individuals who embezzle millions of dollars from these programs. According to the US Sentencing Commission, 59.1% of healthcare fraud offenders in 2023 were non-White with the median loss for these offenses being $1,416,231.
In January, a Hispanic man who was released from prison last year for health care fraud was back in court facing new charges for the same type of crime in Hartford, Connecticut. Law enforcement also arrested an alleged accomplice who is a prominent Hispanic businesswoman involved in real estate and hemp-based products.
While serving his previous prison sentence for health care fraud and identity theft, Ramon Apellaniz allegedly continued to use a false identity to continue to submit thousands of fraudulent Medicaid claims while incarcerated.
Last year, law enforcement in Montgomery County, Pennsylvania arrested 21 individuals including Stephanie Mobley, the Black Muslim owner of a local home care agency.
Many of the other 20 individuals also charged in the alleged Medicaid fraud scheme were relatives of Mobley. According to police, Mobley and her accomplices had diverted millions of dollars from Medicaid over a three-year period.
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