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Post date: December 15 1999

Adult Care Provider Accused Of Medicaid Fraud

Attorney General Spitzer said today that the owner of a senior care facility in Brooklyn has been indicted in a scheme to defraud the Medicaid program of $62 million.

Lawrence Friedman, 52, of Brooklyn, the owner and operator of Parkshore Adult Health Care Center, was charged in a 21-count indictment for illegally billing Medicaid for senior citizens' social activities and transportation costs.

Parkshore serves the Brighton Beach, Far Rockaway, and Starrett City neighborhoods of Brooklyn, catering almost exclusively to Russian immigrants.

"The billings from this one facility grew so dramatically and became so large that Parkshore now accounts for 25 percent of all Adult Day Health Care billings in the state," said Spitzer. "Parkshore's Medicaid billings grew from $500,000 in 1996 to nearly $50 million this year."

The indictment alleges that while Friedman was supposed to be providing medical care to seniors, the facility was instead providing free meals, English classes and various social activities, which are not reimbursable under the Medicaid program.

Specifically, the indictment charges that between July 1, 1996 and December 7, 1999, Friedman and the Parkshore facility defrauded Medicaid by:

  • Falsifying medical records -- including blood pressure results -- to falsely state that patients needed medical services, and that they received such services -- including physical and occupational therapy -- when in fact they did not;
  • Making $50 cash payments to people for referring seniors to Parkshore; and
  • Taking steps to hide the fraud from Health Department inspectors, including telling the elderly to "dress down" so as not to appear too healthy; and taking other seniors to see movies as a way to avoid contact with inspectors.

"The Medicaid system is designed to deliver medically-necessary treatment to seniors and others in need," said Jose Maldonado, the head of the Medicaid Fraud Control Unit. "This scheme to defraud the system is one of the most brazen we've ever seen. Parkshore officials went to great lengths to falsify records and hide what they were doing from inspectors."

Over the past three and a half years, Friedman is accused of fraudulently obtaining $62 million from Medicaid, including:

  • $48.5 million in claims for health care services that were not provided or do not qualify for Medicaid reimbursement;
  • $12.1 million in claims for ambulette services that were not provided or were provided without proper prior notification, and
  • $1.3 million in claims for ambulette services that were provided by others and already billed to Medicaid.

Spitzer's office has filed a civil action seeking up to $186 million in treble damages as a result of the alleged fraudulent activities. The Attorney General is asking the court to attach property totaling $62 million owned by Friedman, his wife and Friedman's company, Parkshore Health Care Facilities, LLC.

An administrative assistant and head nurse at the facility have also been charged in separate indictments for perjury. All three defendants were arraigned in Brooklyn Supreme Court.

The case is being handled by the New York City Regional Director of the MFCU, Richard Harrow.


*All Grand Larceny in the First Degree Counts are B felonies punishable by up to 25 years in prison.

*Perjury in the First Degree Counts are D felonies punishable by up to seven years in prison.

Charge: Grand Larceny, First Degree, B felony (3 counts)
Conspiracy Fourth Degree, E felony (2 counts)
Offering a False Instrument for Filing, D felony (16 counts)

DOB: 4/2/57
Address: East Rockaway, L.I.
Charge: Perjury in the First Degree, D felony (1 count)

DOB: 5/19/73
Address: Brooklyn, NY
Charge: Perjury in the First Degree, D felony (1 count)

Address: 9517 Ave. J, Brooklyn, NY 11236
Charge: Grand Larceny in the First Degree, B felony (3 counts)