Milwaukee Business Owner Charged in $2.4 Million Medicaid and PPP Fraud Scheme

A Milwaukee business owner was charged in early May with multiple felonies after prosecutors accused her of orchestrating a multi-year scheme to defraud Wisconsin's Medicaid program of nearly $2.2 million while also fraudulently obtaining a $219,000 Paycheck Protection Program loan. According to a criminal complaint filed in Milwaukee County Circuit Court on May 5, Debbie Long, 44, faces five felony counts, including fraud and money laundering. The charges stem from alleged activities connected to her home health care business, Pinnacle Home Health Care, LLC. This case is a stark reminder of the intense, ongoing scrutiny of pandemic-era relief funds. In our experience, federal and state agencies are now conducting meticulous post-mortem reviews of programs like PPP. Many small business owners who acted in good faith are finding their records under a microscope, making comprehensive documentation and compliance more critical than ever. The Wisconsin Department of Justice alleges the scheme ran for over five years, from March 2017 to August 2022. Investigators from the department’s Medicaid Fraud Control and Elder Abuse Unit described the case in court documents as “widespread fraud against Wisconsin Medicaid.” Prosecutors claim Long systematically submitted fraudulent claims for personal care services that were either never provided, grossly exaggerated, or physically impossible to perform. Court documents detail several egregious examples of the alleged fraud. In one instance, Pinnacle Home Health Care billed Medicaid for 96 units of personal care for a single individual in one day, a claim that equates to 1,440 hours of service within a 24-hour period. The state paid $750,752 for that claim alone. In another, Long’s company allegedly submitted a claim for 13,500 hours of service for one member in a single day. In total, prosecutors state Pinnacle was paid more than $1.57 million for claims that were either “impossible or improbable.” Investigators also interviewed former employees and patients, finding that Pinnacle was paid nearly $250,000 for services that both parties confirmed never took place. The alleged methods included billing for nonexistent services, inflating the amount of services rendered, and claiming reimbursement for travel expenses that were never incurred. In addition to the Medicaid allegations, prosecutors accuse Long of defrauding the federal Paycheck Protection Program (PPP), which was established to help businesses during the COVID-19 pandemic. According to the complaint, Long submitted a fraudulent PPP loan application in May 2020, claiming Pinnacle employed 120 workers with an average monthly payroll of nearly $90,000. However, records from the Wisconsin Department of Workforce Development for the same period showed the company had only 46 employees and a monthly payroll of approximately $36,000. Based on the inflated numbers, Long’s company fraudulently obtained a PPP loan of $219,072, according to the charges. Lisa Grabert, a visiting research professor at Marquette University who studies public health insurance systems, told FOX6 News that fraud cases saw an increase during the pandemic. She suggested that some individuals may have been engaged in smaller-scale fraud before seeing pandemic relief programs as an additional opportunity to exploit. The complaint further alleges that Long and her husband engaged in a complex money laundering operation to conceal the illicit funds. Prosecutors claim they funneled the money from both the Medicaid reimbursements and the PPP loan through three shell companies. These funds were then allegedly used to purchase several high-value assets, including Kitt’s Frozen Custard in Milwaukee in 2020, an Octopus Car Wash, and a Mercedes-Benz AMG S63, a luxury vehicle that costs nearly $200,000 new. The alleged use of shell companies and complex transactions to hide the source of funds is a classic money laundering playbook, but it also highlights a risk for legitimate businesses: sloppy financial hygiene. Commingling funds or having opaque corporate structures can attract unwanted regulatory attention, even when no fraud is intended. This is why proper business formation and maintaining pristine financial records are not just about efficiency; they are fundamental to risk management. Having a clear, auditable trail of all transactions is the best defense against scrutiny. For guidance on establishing robust financial controls, business owners can contact C&S Finance Group LLC at csfinancegroup.com to explore our outsourced CFO services. According to reports, Long no longer owns Kitt’s Frozen Custard, which is operating under new ownership. She and her husband have also reportedly moved from the addresses listed in court documents. As of early May, online jail records indicated she was not in custody in Milwaukee County. The case is being prosecuted by the Wisconsin Attorney General's Office. Long is scheduled to appear in court in July to face the charges. The continued focus by state and federal authorities on pandemic-related financial crimes indicates that investigations into PPP and other relief programs are far from over. Businesses that participated in these programs should be prepared for potential audits and ensure their documentation is thorough and accurate, as enforcement actions are expected to continue for the foreseeable future.