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Post date: August 27 2007

Operation Home Alone' Nets Convictions Of Leaders Of $12 Million Home Care Fraud

Attorney General Andrew M. Cuomo’s industry-wide crackdown on fraudulent Medicaid home care providers has resulted in the convictions of a Brooklyn Licensed Home Care Services agency (LHCSA) and its principals who stole millions from Medicaid by employing unqualified, uncertified home health aides and causing Medicaid to be billed for services never rendered.

“These individuals took advantage of a system that was ripe for abuse,” said Attorney General Cuomo. “They did so by knowingly recruiting unqualified home health aides in order to enlarge their workforce and increase their fraudulent billings.”

Nachem Singer, 43, of Division Ave., Brooklyn today pleaded guilty to Grand Larceny in the 3rd Degree, a D felony, for his role in a scheme that defrauded Medicaid of over $12 million dollars. Ervin Rubenstein, 43, of 49th Street, Brooklyn pleaded guilty to 4th degree Grand Larceny, an E felony, and the licensed home care service agency they operated, Immediate Home Care, Inc., located on Broadway in Brooklyn, pleaded guilty to Grand Larceny in the 2nd degree, a C felony, and will pay $12.5 million in restitution.

Immediate Home Care, Inc. was authorized in 1994 by the Department of Health to operate as a licensed home care services agency. Between 2003 and 2006, Immediate’s revenues increased from approximately $3 million to over $52 million. Immediate has employed at least 2,000 home health aides, including George Babuadze, Raisa Haypapetyan, Rima Petrosyan, Julieta Sephashvili, Elvira Bruce, Sahakanush Yuzbashyan, Miriam Schwinder, Vano Saralidze, Ketevan Saralidze and Hershl Schwartz, whose convictions for operating with phony certifications – announced last week – resulted from Operation Home Alone.

Medicaid requires home health care aides – who primarily care for elderly patients, administer medication, and provide services such as catheter care, colostomy care and wound care – to successfully complete a training program licensed by the Department of Health or the State Education Department. All aides must receive a minimum of 75 hours of training, including sixteen hours of supervised practical training conducted by a registered nurse and complete a written test conducted in English.

In addition to employing uncertified aides – and causing Medicaid to be billed for their work – Immediate Home Care recruited aides from training facilities where false certifications could simply be purchased, with little or no training provided. Two owners of such businesses – Mary Smalls, of Brooklyn-based Smalls Training and Counseling School and Laurette Escarment, of Queens-based On-Time Home Care Agency – have pleaded guilty to supplying hundreds of home health aides with false training certificates.

Some of the Immediate aides provided little or no care to patients at all, but would bill for their time – sometimes 24 hours in a single day – nonetheless, sometimes splitting the proceeds with their patients and with Singer and Rubenstein.

Further, Immediate Home Care caused Medicaid to be billed for aides who provided home care to their relatives. Under the Medicaid rules, services for close relatives, such as parents, spouses and in-laws, are not reimbursable, and for other relatives are only reimbursable under exceptional circumstances.

Singer and Rubinstein are due back in court for sentencing on October 24.

Provisions establishing and regulating home health care in New York were set forth in Chapter 895 of the state laws of 1977. The aim was to create a “nursing home without walls,” reducing the costs associated with institutionalization and providing patients a greater level of comfort. Every month, more than 80,000 New Yorkers receive some sort of Medicaid-funded home health services – just over 54,000 of them live in New York City. In 2006, Medicaid spent nearly $1.3 billion on home health care. Because there is no centralized registry for home health aides, an accurate estimate of their numbers cannot be given.

Attorney General Cuomo urged New Yorkers who suspect cases of Medicaid fraud to call the AG’s Medicaid Fraud Hotline, at 1-866-NYS-FIGHT (697-3444).

The investigation of fraud in the home health care industry, dubbed “Operation: Home Alone,” is ongoing. The case is being prosecuted by Richard Harrow, Director of the New York City Regional Office of the Medicaid Fraud Control Unit, assisted by Special Assistant Attorney General Kiran Heer, under the supervision of Special Deputy Attorney General Heidi Wendel. The investigation was conducted by Senior Special Investigators Michael Casado, Frederick Rondina and Hazel Walters, and Special Investigator Natalie Sotnikova, Associate Special Auditor Investigator Cristina Truta, and Special Auditor Investigator Lisa Close under the supervision of Supervising Special Auditor Investigators Paul Erhart and Thomasina Smith. Deputy Director of MFCU Information Technology Carolyn Pollard also contributed to the case.