New York Attorney General Letitia James announced the conviction and sentencing of a 65-year-old man from Shirley, New York, for stealing more than $1 million from the state’s Medicaid program through fake billing and kickback schemes.
The defendant, owner and operator of a transportation company reimbursed by Medicaid for transporting patients to and from medical appointments, submitted fabricated claims for services that did not occur. An investigation by the Medicaid Fraud Control Unit (MFCU) of the New York Attorney General’s Office revealed that these claims included recipients who were deceased, incarcerated, hospitalized, or otherwise did not receive the billed services.
The defendant executed the scheme in part through a tiered kickback system, paying some recipients to skip scheduled appointments—including substance abuse treatment visits—while still billing Medicaid for the trips. Recipients were also incentivized to recruit others to participate. Through these fake claims, the defendant fraudulently received over $1 million from Medicaid.
On January 8, 2026, he was convicted of Grand Larceny in the First Degree and sentenced to one and a half to four and a half years in state prison. He also paid $1.5 million in restitution. The company received a Conditional Discharge. As a result of the convictions, both the defendant and the company are barred from participating in all government-funded health programs, including Medicaid and Medicare.
Compliance Perspective
Issue
Facilities that coordinate non-emergency medical transportation for residents or clients must ensure that transportation providers comply with Medicaid and Medicare regulations. Failure to properly vet vendors, maintain accurate billing, or monitor services can lead to legal and financial penalties, including program exclusions. Strong internal policies, staff training, and auditing procedures are essential to prevent fraud and ensure that transportation services are legitimate and medically necessary.
Discussion Points
- Ensure your facility has comprehensive policies and procedures to screen all vendors, verify they are not excluded from Medicaid or Medicare programs, and monitor ongoing compliance. Policies should outline expectations for documentation, oversight of vendor arrangements, and adherence to applicable regulations. Facilities may also benefit from collaborating with external consultants who provide expertise in compliance, risk mitigation, and regulatory best practices to help strengthen these policies.
- Provide staff training on arrangements with vendors, understanding red flags that may indicate inappropriate activity. Ensure staff understand what constitutes a false claim, how to accurately document services, remaining alert to recognize red flags for potential fraud, and appropriate steps for reporting concerns. Training should be ongoing and tailored to staff roles and responsibilities. Med-Net Academy offers the Red Flags of Fraud course, which teaches participants how to identify warning signs of fraudulent activity by outside contractors, understand penalties for failing to detect fraud, follow proper reporting procedures, and handle external communications appropriately.
- Implement regular audits of vendor activities and their access to resident information for billing practices to confirm that services were actually provided, were medically necessary, and that the vendor remains compliant with program requirements. Working with an experienced consultant can help facilities identify potential risks, conduct mock audits, and develop targeted corrective action plans.
*This news alert has been prepared by Med-Net Concepts, Inc. for informational purposes only and is not intended to provide legal advice.*