Geoffrey S. Berman, United States Attorney for the Southern District of New York, Peter C. Fitzhugh, Special Agent in Charge of the New York Field Office of the Department of Homeland Security Investigations (“HSI”), Scott J. Lampert, Special Agent in Charge of the New York Regional Office of the U.S. Department of Health and Human Services, Office of the Inspector General (“HHS-OIG”), and Dennis Rosen, New York State Medicaid Inspector General (“OMIG”), announced the unsealing of a Complaint charging thirteen defendants with participating in a scheme to steal millions of dollars from New York State’s Medicaid program through fraudulent claims related to transportation services.
U.S. Attorney Geoffrey S. Berman said: “As alleged, these defendants exploited and abused Medicaid, billing millions of dollars for phantom medical transportation services. Medicaid is intended to provide financial assistance to those in need. These defendants allegedly treated the Medicaid program that pays for medical transport as an opportunity to steal from Medicaid, which is indirectly stealing from American taxpayers. Now they face prosecution for their alleged crimes.”
HSI Special Agent in Charge Peter C. Fitzhugh said: “It is alleged that these individuals schemed to defraud the Medicaid program out of millions of dollars, in turn robbing all those who rely on it for their vital healthcare needs. More than a dozen were involved in this plan to charge for services not rendered, and HSI working with its law enforcement partners arrested those who sought to make a profit at the expense of those in need and will continue to do so.”
HHS-OIG Special Agent in Charge Scott J. Lampert said: “Millions of people in New York depend on Medicaid for vital services, and taxpayers across the country pay for that care. We will continue close cooperation with our State and Federal law enforcement partners to preserve this essential funding.”
NYS Medicaid Inspector General Dennis Rosen said: “Today’s arrests send an unmistakable message to those who seek personal gain by preying upon vulnerable New Yorkers and exploiting the Medicaid program. My office will continue to work closely with our federal partners to protect Medicaid recipients, save taxpayer dollars, and hold wrongdoers fully accountable.”
As alleged in the criminal Complaint unsealed today:[1]
From in or about August 2017 to February 2020, KJ Transportation C Services Inc. (“KJ”) was paid more than $20 million for providing transportation services for Medicaid enrollees in the New York City area.
JORGELINA ABREU GIL, 32, of Yonkers, New York, is the owner of KJ. Her husband, JULIO ALVARADO, 59, of Yonkers, is a manager at the company. Beginning in August 2017, KJ began submitting claims to Medicaid for purported medical transportation services for eligible people in the New York area. From August 2017 to February 2020, KJ submitted more than 100,000 claims related to hundreds of thousands of trips. However, a large percentage of those claims were fraudulent. In some instances, the Medicaid recipient was deceased or out of the country when KJ claimed it was transporting that person to medical appointments. In other instances, the Medicaid recipient had never heard of KJ and had never taken any rides with the company. In yet other instances, the Medicaid recipient had received unlawful “kickbacks” from defendants in exchange for either giving KJ his/her Medicaid information, or for fraudulently scheduling trips he/she did not take.
In hundreds of instances, defendants called Medicaid’s transportation management company for the New York City area and scheduled trips on behalf of Medicaid enrollees. On these calls, the defendants tried to schedule reoccurring trips several times per week that would go on for months, allowing them to bill dozens of trips to Medicaid without having to schedule each trip individually. In other instances, defendants scheduled trips online. ABREU GIL attested to nearly all of the trips, fraudulently certifying that the trips actually took place when, in fact, most did not.
HECTOR SALAZAR HERRERA, 27, of the Bronx, New York, ZORAIDA GONZALEZ, 44, of Yonkers, New York, YESENIA RODRIGUEZ, 37, of Yonkers, JOSE RIVERA, 26, of the Bronx, FABIAN MORGAN, 39, of the Bronx, VICTORIA PALMA BREA, 32 of the Bronx, CRISTOPHER SANTOS FELIX, 28, of the Bronx, JOHN MANUEL MEJIA, 41, of the Bronx, JOSE JIMENZ HIDALGO, 42, of the Bronx, FRANCISCO SALAZAR, 68, of the Bronx, and NELSON DIAZ, a/k/a “Abdul Alamin,” 56, of the Bronx, acted as “drivers” or “recruiters” of Medicaid enrollees. As detailed in the Complaint, the defendants variously paid Medicaid enrollees to schedule fraudulent trips, paid unlawful kickbacks to Medicaid enrollees, and fraudulently scheduled trips that never took place. In exchange for their work, the “drivers” or “recruiters” were paid up to hundreds of thousands of dollars.
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ABREU GIL, ALVARADO, GONZALEZ, RODRIGUEZ, RIVERA, MORGAN, PALMA BREA, MEJIA, JIMENEZ HIDALGO, SALAZAR, and DIAZ were arrested this morning and will be presented later today before U.S. Magistrate Judge Robert W. Lehrburger in Manhattan federal court. SANTOS FELIX was already in federal custody on unrelated charges and will be presented at a later date.
ABREU GIL, ALVARADO, SALAZAR HERRERA, GONZALEZ, RODRIGUEZ, RIVERA, MORGAN, PALMA BREA, SANTOS FELIX, MEJIA, JIMENZ HIDALGO, SALAZAR, and DIAZ are each charged with one count of submitting false claims, in violation of 18 U.S.C. § 287; one count of theft of government funds, in violation of 18 U.S.C. § 641; one count of aggravated identity theft, in violation 18 U.S.C. § 1028A; one count of wire fraud, in violation of 18 U.S.C. § 1343; one count of health care fraud, in violation of 18 U.S.C. § 1347; one count of conspiracy to commit wire fraud and health care fraud, in violation of 18 U.S.C. § 1349; and one count of violating the Anti-Kickback Statute, 42 U.S.C. § 1320a-7b. In addition, ABREU GIL and ALVARADO are each charged with one count of money laundering, in violation of 18 U.S.C. § 1957.
The crime of submitting false claims carries a maximum sentence of five years in prison. The crimes of theft of government funds, health care fraud, money laundering, and violating the Anti-Kickback Statute each carry a maximum sentence of 10 years in prison. The crime of wire fraud carries a maximum sentence of 20 years in prison. The crime of aggravated identity theft carries a mandatory two years in prison. The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendants will be determined by a judge.
On February 14, 2020, law enforcement officers also executed seizure warrants in an effort to recover millions of dollars in fraud proceeds obtained by the defendants.
Mr. Berman praised the outstanding work of HSI, HHS-OIG, and OMIG. He also thanked the City of Yonkers Police Department, the New York City Police Department, the New York Attorney General’s Medicaid Fraud Control Unit, and United States Customs and Border Protection for their assistance in the case.
This case is being handled by the Office’s General Crimes Unit. Assistant United States Attorney Kedar S. Bhatia is in charge of the prosecution.
[1] As the introductory phrase signifies, the entirety of the text of the Complaint and the description of the Complaint set forth herein are only allegations, and every fact described should be treated as an allegation.