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Post date: June 20 2003

Biller For Pennsylvania Hospital Admits Stealing $500,000 From New York State Medicaid Program

Attorney General Spitzer today announced that Therese Kusmierz, who was employed as the billing agent for a Montrose, Pennsylvania, hospital has admitted to stealing nearly $500,000 from taxpayers by billing on behalf of the hospital for services never provided to New York State Medicaid patients. Kusmierz, a.k.a. Therese Milkowski, 52, of 8 Kennedy Court in Lancaster, New York, also admitted to failing to report the money as income on her state tax return.

Appearing today before Erie County Supreme Court Justice Ronald Tills, Kusmierz pleaded guilty to Grand Larceny in the Second Degree and Filing a False or Fraudulent Tax Return in satisfaction of the 9-count indictment pending against her. Kusmierz also agreed to make restitution of $504,951 to the Medicaid program. Sentencing was set for August 22nd , at which time Kurmierz faces up to fifteen years in prison.

"By following the paper trail left by the defendant, the Medicaid Fraud Control Unit was able to determine that the defendant used the ill-gotten proceeds of her scam 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 my office's commitment to scrupulously monitor and vigorously prosecute those individuals who bilk the state's Medicaid program for personal financial gain."

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. 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 also failed 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.

The Attorney General thanked the New York State Department of Taxation and Finance for their assistance in the investigation.

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