ORANGE COUNTY — Paul Randall pleaded guilty in April to wire fraud in one of the largest California Medicaid fraud schemes in the state's history. He was convicted of diverting more than $270 million in taxpayer funds and faces up to 30 years in prison when sentenced this summer.
Randall had been out on bond awaiting sentencing on a previous federal fraud charge when he launched his latest scheme. Court records show he has six prior fraud convictions but never served substantial prison time.
Randall owned an eight-bedroom, 10-bathroom compound on an isolated Orange County hilltop. Fraudsters in the scheme used stolen taxpayer money to purchase luxury items including game-worn Kobe Bryant sneakers and Ferraris. Some of those assets are now held in a secret federal law enforcement warehouse in Southern California, which also contains seized Lamborghinis and Mickey Mantle rookie cards.
Bill Essayli, the top federal prosecutor in Los Angeles, said Randall’s repeated ability to commit fraud reflects a systemic failure. "Obviously there's a breakdown in the criminal justice system if this guy was able to have six convictions and never did any real prison time," Essayli said. He added, "It should offend every American taxpayer that these people are taking advantage of the system."
Randall declined to be interviewed. Federal authorities noted that the vast majority of fraudulently obtained funds often move overseas before they can be recovered, and criminals are increasingly using sophisticated methods to conceal their activities. By some government estimates, at least $500 billion is lost to fraud schemes each year. Federal law enforcement is working on ways to better find and recover stolen funds.