The perpetrators of an alleged Medicaid and Medicare fraud involving complimentary shoes and fake diagnoses could face 25 years in prison, as investigators across the country try to prevent or at least find fraud schemes that never seem to end.
A mother and son team working with 9 doctors and 12 other health workers in New York City are accused of conning Medicare and Medicaid out of $6.9 million between 2012 and 2014. They allegedly recruited public health plan beneficiaries from homeless shelters, welfare offices and soup clinics, offering free sneakers or shoes to those who could produce a Medicaid card and visit medical clinics for visits that often involved false diagnoses and unnecessary tests and orders for equipment like leg braces.
From a warehouse in Sunset Park, Brooklyn, Eric Vainer and his mother Polina oversaw the scheme, according to Brooklyn District Attorney Ken Thompson, which charged the team recently.
Recruiters were dispatched to throughout NYC; Medicaid cards would be checked, and those beneficiaries would be sent to clinics in Brooklyn and the Bronx. Podiatrists, who paid Vainer a referral fee or split the reimbursement with him, would see the individuals, give a fictitious diagnosis--"abnormality of gait" or fungal infection--tests and equipment like orthotics and leg braces that were supplied by a company owned by Vainer. Psychiatrists, pain-management specialists, cardiologists and vein specialists were also part of the alleged scheme, billing for reviewing tests or performing procedures, even if they weren't done.
After the clinic trips, the individuals would get what they were promised: a free pair of shoes, boots or sandals. "We can use the same patients like guinea pigs for anything we want," Vainer said in a government wiretap.
The Brooklyn District Attorney's office investigated and build evidence to prosecute the scam after a tip from a Brooklyn resident who was recruited, met with a podiatrist and given a knee brace--only to be denied the sneakers when she turned down the brace.
An undercover investigation subsequently found that between October 1, 2012 and September 30, 2014, the alleged scheme encompassed fraudulent operation of medical clinics and the submission of fraudulent claims to Medicaid and Medicare, by doctors,nurse practitioners, physician's assistants, technicians, office staff, recruiters, managers and billers.
Among the charges are enterprise corruption, first-degree money laundering, first-degree scheme to defraud, first-degree health care fraud, first-degree falsifying business records, first-degree offering a false instrument for filing, fourth-degree grand larceny, fourth-degree attempted grand larceny, fourth-degree conspiracy, social service law, petit larceny and attempted petit larceny. The United States Attorney's Office has obtained warrants to seize 13 bank accounts into which payments from the defrauded programs were traced.
In the fiscal year 2014, Medicaid Fraud Control Units recovered more than $2 billion from 1,318 convictions and 874 civil settlements. There were also more than 16,400 open cases of fraud across the states.