Attorney General Cuomo Announces Criminal Indictment And Civil Lawsuit Against Western New York Hospital Contractor For Bribing County Worker In Massive Medicaid Scam
BUFFALO, N.Y. (May 12, 2009) - Attorney General Andrew M. Cuomo today announced the indictment and civil lawsuit against a Western New York hospital contractor for bribing a county worker in a massive Medicaid scam.
Deborah Kantor, 55 of Tonawanda, and her company, H.I.S. Holdings, Inc. (H.I.S.), a debt collection agency that services Niagara Falls Memorial Medical Center and other western New York hospitals, is accused of bribing Michael Albrecht, a Niagara County Department of Social Services (DSS) employee, in exchange for assistance in approving Medicaid coverage for certain hospital patients.
The Attorney General also announced the filing of a lawsuit against Kantor and H.I.S. in Niagara County Court seeking recovery of $732,787 which represents the amount of fraudulent Medicaid benefits the State paid as a result of the alleged scheme. The suit also seeks an additional $2,198,362 in damages from Kantor and H.I.S. for fraud under the State’s False Claims Act and Social Services Law.
“These allegations outline an elaborate scheme where corrupt individuals intent on lining their pockets through bogus Medicaid payments ripped-off hundreds of thousands of taxpayer dollars,” said Attorney General Cuomo. “This investigation, as others across the state, remains ongoing as my office continues building on the successes of our Medicaid fraud-fighting efforts to return more of the money that rightfully belongs to taxpayers.”
Kantor and her company H.I.S. were compensated based on a percentage of the hospital bills upon which she was able to collect. But, the lawsuit alleges, she profited from fraudulent Medicaid payouts falsely approved by Niagara County employee Michael Albrecht who was secretly on her payroll. Albrecht allegedly sold Kantor confidential Medicaid client identification numbers, approved Medicaid applications that had incomplete or false information, and approved applications despite information that the applicant was not eligible to receive benefits.
To circumvent the Medicaid application process, Kantor allegedly offered to pay Albrecht $50 for each active Medicaid client identification number that he provided. In his position with Niagara County DSS, Albrecht had access to the Welfare Management System (WMS) computer, which contains confidential information about persons who have applied for public benefits in New York.
According to the lawsuit, using names provided by Kantor, Albrecht researched individuals on the WMS computer to determine whether they were or had been Medicaid recipients, and he provided her with the client identification numbers required for Medicaid billing regarding any active accounts he uncovered. Kantor also paid Albrecht for client identification numbers on inactive Medicaid accounts that he allegedly improperly re-activated without requiring a new patient application from H.I.S.
The criminal indictment alleges that from 2000 to 2007, Kantor and H.I.S. paid more than $17,749 in checks and cash to Albrecht as part of scheme to defraud Medicaid. The indictment also alleges that Kantor rewarded Albrecht with a cell phone, cell phone service, and other gratuities for approving substandard Medicaid applications submitted by her company on behalf of hospital patients.
Kantor, H.I.S., and another H.I.S. employee, Amy Gardner, 31 of Tonawanda, were also indicted for submitting a Medicaid application, which they knew falsely reported the address of the applicant, in order to get the Niagara County Department of Social Services to approve the applicant’s Medicaid eligibility.
All three defendants were arraigned today in Niagara County Court before Judge Sara Sheldon Sperrazza. Kantor and H.I.S. were charged with Bribery in the Second Degree and Rewarding Official Misconduct in the Second Degree. Kantor and H.I.S. were also charged, along with Gardner, with Offering a False Instrument for Filing in the First Degree and Attempted Grand Larceny in the Third Degree. Kantor faces a maximum penalty of 15 years in prison, Gardner faces a maximum of 4 years. Kantor has 24 hours to post cash or bond of $100,000 or $200,000 in property. Gardner has 24 hours to post $10,000 cash or property. Both defendants will return to court on August 5.
Attorney General Cuomo thanked the administration and staff of the Niagara County Department of Social Services for their cooperation and assistance in the investigation.
The criminal case is being prosecuted by Gary A. Baldauf, Director of Attorney General Cuomo’s Medicaid Fraud Control Unit’s Buffalo Regional Office. Senior Special Investigator Kathleen Donahue and Special Auditor/Investigator Mary Henry assisted in conducting the investigations. The civil case is being handled by Special Assistant Attorney General Jacob M. Bergman of the Medicaid Fraud Control Unit’s Civil Enforcement Division.
The charges against the defendants are merely accusations, and the defendants are presumed innocent unless and until proven guilty.