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Court Discusses Medicaid Fraud


Manhattan Medicaid & Welfare Fraud Ring Gets a Dose of Law Enforcement: “Operation Free Ride” Nets 19 Individuals for $350,000 Medicaid Theft

Medical identity theft is defined as “the appropriation or misuse of a patient’s or provider’s unique medical identifying information to obtain or bill public or private payers for fraudulent medical goods or services,” according to “Physician Medical Identity Theft,” in the “Journal of the American Medical Association.” It is a growing and costly issue. You, other providers, and patients are vulnerable to it. This type of theft is one of several forms of health care fraud. The Federal Government, in conjunction with State Governments, provides health care coverage for 100 million people through Medicare, Medicaid, and the Children’s Health Insurance Program (CHIP) (1), which is equivalent to about one out of every four individuals in this country, and amounts to expenditures of more than $732 billion in taxpayer dollars per year (2). The size of these health care programs makes them targets for fraud. Both the Federal Trade Commission (FTC) and CMS track cases of provider and patient medical identity theft. The latest FTC data shows that more than 3,600 physician and patient cases of medical identity theft were reported in 2009, with more than 12,000 cases reported between 2007 and 2009 (3).

Fraud is a broad term that refers to a variety of offenses involving dishonesty or “fraudulent acts”. In essence, fraud is the intentional deception of a person or entity by another made for monetary or personal gain.

Fraud offenses always include some sort of false statement, misrepresentation, or deceitful conduct. The main purpose of fraud is to gain something of value (usually money or property) by misleading or deceiving someone into thinking something which the fraud perpetrator knows to be false. While not every instance of dishonesty is fraud, knowing the warning signs may help stop someone from gaining an unfair advantage over your personal, financial, or business affairs.

There are many types of fraud offenses, several of which occur through the mail, internet, phone, or by wire. Common types include:

• bankruptcy fraud • tax fraud (a.k.a. tax evasion)

• Identity theft • insurance fraud • mail fraud • credit/debit card fraud • securities fraud • telemarketing fraud • wire fraud

Insurance fraud refers to any duplicitous act performed with the intent to obtain an improper payment from an insurer. Insurance fraud is committed by individuals from all walks of life. Law enforcement officials have prosecuted doctors, lawyers, chiropractors, car salesmen, insurance agents and people in positions of trust. Anyone who seeks to benefit from insurance through making inflated or false claims of loss or injury can be prosecuted.

The pervasiveness of insurance fraud drives up costs for all consumers and costs the insurance industry billions of dollars each year. One authority estimates that the annual value of insurance fraud approaches $80 billion. Detecting insurance fraud is difficult because of the surreptitious nature by which the criminal perpetrates the fraud.

Depending on the specific issues involved, an alleged wrongful act may be handled as an administrative action or law enforcement may handle it as a criminal matter.

Generally, securities fraud occurs when someone makes a false statement about a company or the value of its stock, and others make financial decisions based on false information. Although the crime itself isn’t complicated, securities fraud can be particularly difficult to grasp if you lack an understanding of securities regulation. Below, you’ll find information on common forms of securities fraud and how to protect your assets.

If there is an easy way to make a buck off the health care system, someone is going to make a go for it even if their final prescription calls for an enormous dose of law enforcement. The Manhattan District Attorney’s Office just announced the arrest and indictment of 19 individuals for fraudulently obtaining Medicaid benefits in the amount of $350,000. These individuals are charged with Welfare Fraud, Grand Larceny and Offering a False Instrument for Filing. 11 of the defendants allegedly misrepresented on the paperwork that they were New Yorkers residing in Manhattan while 8 of the defendants allegedly misrepresented their income and financial resources. Without these misrepresentations, the defendants would not have been entitled to Medicaid.

Although the charges and degrees vary for each defendant, Grand Larceny in the Second Degree and Welfare Fraud in the Second Degree is a class C felony punishable by up to 5 to 15 years in state prison, Grand Larceny in the Third Degree and Welfare Fraud in the Third Degree is a class D felony punishable by up to 2 and 1/3 to 7 years in prison and Offering a False Instrument for Filing in the First Degree is a class E felony punishable by up to 1 and 1/3 to 4 years in state prison.

What happens to each of these defendants remains to be seen. Can they pay back what they allegedly stole? Was there a time where at least part of their claims were legitimate? Did they fill out all the paperwork or did someone do it for them? As I have said time and time again, these defendants need to identify their defense and implement it immediately.

Penalties for fraud offenses may include criminal penalties, civil penalties, or both. Most criminal fraud offenses are considered felony crimes and are punishable by jail, fines, probation, or all of the above. Civil penalties may include restitution (paying the person back) or payment of substantial fines (geared to punish the behavior). The penalties for your offense will depend on the nature, type, scope, and severity of the action and whether it was committed by an individual or an entity, such as a business, corporation or group.

Fraud is a serious offense, you will need the expertise of a New York Wire Fraud Attorney and New York Criminal Defense Attorney at Stephen Bilkis and Associates.

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