The owner of a Schenectady County medical transportation company has been charged with stealing more than $1.8 million from New York’s Medicaid program over nearly four years, State Comptroller Thomas P. DiNapoli, Schenectady County District Attorney Robert Carney, and Schenectady County Sheriff Dominic Dagostino announced on October 24, 2025. The company’s office manager was also charged with money laundering in connection with the scheme.
Defendant 1 is accused of inflating Medicaid bills between January 2020 and September 2024 by submitting claims for rides that never occurred, overbilling for group rides, and misrepresenting trip destinations to increase payments. Defendant 2 is accused of paying kickbacks to Medicaid recipients as part of the scheme.
Defendant 1 owned the company, and Defendant 2 worked as the office manager. The company was enrolled in the state’s Medicaid transportation program, which allows providers to bill for legitimate medical appointments. Under program regulations, group rides require prior authorization, and providers may bill for mileage only once per group.
Investigators allege that Defendant 1 fraudulently billed the Medicaid program by claiming payment for unauthorized group rides disguised as individual trips, thereby inflating the company’s reimbursement. The company also allegedly billed for rides that never occurred and falsified destinations to increase payments.
The investigation further revealed that patients seeking drug treatment were allegedly paid cash kickbacks by the defendants to use the company’s services, facilitating the fraud. In some cases, the kickbacks were used to purchase illicit drugs, undermining the purpose of the treatment.
Investigators also found that Defendant 1 used the stolen funds to send more than $400,000 overseas to build what a witness described as a “palace.”
Defendant 1 was charged with grand larceny, healthcare fraud, and money laundering. Defendant 2 was charged with money laundering.
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 transportation vendors, verify they are not excluded from Medicaid or Medicare programs, and monitor ongoing compliance. 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 selecting and managing transportation vendors, understanding what constitutes a false claim, accurately documenting services, and recognizing red flags for potential fraud. Training should be ongoing and tailored to staff roles and responsibilities. Med-Net Academy offers the course Red Flags of Fraud, 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 transportation vendors and billing practices to confirm that services billed to Medicaid or Medicare were actually provided, medically necessary, and 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.*