Pennsylvania Hospital Biller Charged With Stealing $500,000 From New York State Medicaid Program

Attorney General Spitzer today announced that an Erie County grand jury has indicted a Lancaster, New York woman employed as the billing agent for a Montrose, Pennsylvania hospital for stealing nearly $500,000 from taxpayers by billing on behalf of the hospital for services never provided to New York State Medicaid patients.

Therese Kusmierz, a.k.a. Therese Milkowski, 51, of 8 Kennedy Court in Lancaster, was also charged in a nine-count indictment with unlawfully keeping the proceeds for herself and failing to report the money as income on her state tax return.

"By following the paper trail left by the defendant, the Medicaid Fraud Control Unit was able to determine that the defendant used her ill-gotten gains to purchase three new cars, pay off the mortgage on her house, and pay tuition for her children's schooling," said Attorney General Spitzer. "This case underscores our commitment to stopping unscrupulous providers from bilking the state's Medicaid program for personal financial gain."

At her arraignment this morning in Erie County Supreme Court before Justice Nelson Cosgrove, Kusmierz was charged with one count of Grand Larceny in the Second Degree, seven counts of Offering a False Instrument for Filing in the First Degree, and one count of Filing a False or Fraudulent New York State Tax Return. If convicted, she faces up to fifteen years in prison.

According to prosecutors, in August 1997, Montrose General Hospital (MGH) contracted with Kusmierz, the sole owner and operator of Accounts Receivable Management Services, Inc., a health care billing company that she operates out of her home, to process claims for services rendered at MGH prior to January 1997. It is alleged that, from November 1997 to July 1998, and without MGH's knowledge, Kusmierz fraudulently submitted hundreds of reimbursement claims on behalf of MGH for therapeutic services, which had never been rendered. As a result, Kusmierz obtained nearly $500,000 in Medicaid reimbursement for these fictional services.

Kusmierz was also charged with failing to report $425,490 in earnings on her 1998 New York State Resident Income Tax Return, thereby attempting to evade paying taxes on the money and understating the tax liability she owed to the state.

Special Assistant Attorney General Gary A. Baldauf is prosecuting the case. Assisting in the investigation was Special Investigator Valerie J. Robinson and Special Auditor Investigator Christopher E. Magin.

The charges against Kusmierz are accusations, and she is presumed innocent unless and until proven guilty.

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