Clinics Charged With $13 Million Medicaid ‘Megalarceny’
NEW YORK (AP) _ Three health-clinic operators invented up to 12,000 phony patient visits a month to steal $13.3 million in the nation’s largest fraud by a Medicaid provider, a state prosecutor charged Wednesday.
A state judge signed a temporary restraining order freezing $39 million in property owned by Sheldon Weinberg and his sons, including a Rolls-Royce, a Corvette, a Lincoln and two Trump Tower apartments, until an Aug. 19 hearing, said Deputy Attorney General Edward J. Kuriansky.
A Brooklyn grand jury handed up a 65-count indictment charging Weinberg, his sons, Jay and Ronald, and his corporation with the alleged thefts. They operate the Bed-Stuy Health Care Corp. in Brooklyn, which runs two licensed medical and dental clinics in the Bedford-Stuyvesant and Bushwick neighborhoods.
The corporation ″is accused of systematically looting more than $13 million of the $32 million it received from Medicaid for supposedly treating the city’s poor over the past seven years,″ said Kuriansky.
The alleged conspiracy started in April 1980 when Jay and Ronald Weinberg directed an employee to begin manually creating and submitting false Medicaid invoices, Kuriansky charged.
In October 1984, Jay Weinberg asked a billing company employee to design computer programs that could generate phony claims and medical charts for as many as 12,000 fictitious patient-visits a month, he charged.
In addition, Jay Weinberg and Ronald Scaglione, a Brooklyn contractor, were charged with setting fire to the Doctor’s Medical Center in October 1983. The company allegedly collected $53,702 in fraudulent insurance claims.
Dawn Torres, the clinic’s co-administrator, was charged with lying to the grand jury when she swore that ″Joe Wade,″ actually a ″ghost employee,″ had worked at the Bed-Stuy facility, Kuriansky said.
All five defendants were arrested Wednesday morning, Jay Weinberg at his Trump Tower apartment and Ronald Weinberg at his home on East 77th Street. Sheldon Weinberg, who also lives at Trump Tower, was arrested at his Boca Raton, Fla., residence, waived extradition and was being returned to New York, said Sonya Hooever, spokeswoman for Kuriansky.
The prosecutor charged that the Weinbergs orchestrated ″a massive conspiracy to falsely bill Medicaid for hundreds of thousands of phantom patient visits.″
A Bed-Stuy employee allegedly was paid on a percentage basis to ″do nothing but fabricate and file fraudulent Medicaid invoices,″ he said.
In three separate indictments, the five defendants and the corporation were variously charged with first-degree grand larceny, third-degree arson, fourth- degree conspiracy, first-degree reckless endangerment, first-degree insurance fraud, offering a false instrument for filing, falsifying business records and perjury.
Kuriansky said the indictment charges ″the largest fraud by a single Medicaid provider ever prosecuted in the United States.″
The charges carry penalties of up to 25 years in prison, said Kuriansky. For the corporation, each felony is punishable by a fine of up to $10,000 or double the amount of the illegal gain, according to Richard S. Harrow, a special assistant attorney general.
Scaglione had pleaded guilty to forgery earlier this year after a Manhattan grand jury charged him and two others with falsely billing Medicaid for $360,000 in services and supplies through a phantom dentist, Kuriansky said.
Kuriansky said Jay Weinberg was charged last December with failing to file state tax returns in 1984, 1985 and 1986 on more than $190,000 paid to him by Bed-Stuy.