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Post date: July 16 2009

Attorney General Cuomo Announces Six Arrests In $47 Million Medicaid Scam

NEW YORK, NY (July 16, 2009) - Attorney General Andrew M. Cuomo today announced the indictment of six individuals and seven corporations, all of which were charged for being involved in a scheme that defrauded Medicaid out of $47,000,000. Over the past ten years, Alexander Levy, with the assistance of several cohorts, allegedly secretly controlled a string of health care entities to illegally obtain payment for the treatment of Medicaid recipients and then launder the profits.

According to the criminal charges and a companion civil suit filed by the Attorney General, Levy was excluded from any participation in the Medicaid program by the New York State Department of Health in 1997 for submitting false claims to Medicaid for medically unnecessary services and for services that were never actually performed. Even so, he unlawfully continued to own and operate various health care entities that billed New York for the treatment of Medicaid recipients. Levy achieved this by setting up a series of corporations elaborately structured to conceal his control and ownership interest. In all, Levy controlled and managed one home health care agency, two ambulette companies, and three medical clinics, all of which billed Medicaid for millions of dollars of services. Over the last ten years, the scheme resulted in Medicaid paying over $47,000,000 to the health care entities Levy controlled.

“This individual is accused of cheating New York taxpayers out of tens of millions of dollars through an elaborate money laundering scheme,” said Attorney General Cuomo. “But as we have done before, we ‘followed the money,’ which led us to today’s serious charges. Ensuring that Medicaid payouts are made only to those who rightfully deserve them has been a top priority of my administration, and we will continue to protect taxpayer dollars by putting an end to Medicaid fraud.”

According to the criminal charges and civil suit, Levy was careful not to put his name on any documents filed with the New York State Department of Health, but the large flow of Medicaid money going to the Levy-controlled health care entities - through a series of bank accounts and transfers - ultimately led to Levy. Money was funneled from the various health care entities that Levy controlled to shell companies that he created and owned and to a construction company he specifically set up to receive Medicaid funds. In addition, Levy manipulated funds through a home health care agency he controlled to spend hundreds of thousands of dollars on luxury cars and on paying his ex-wife to settle their divorce proceeding.

Attorney General Cuomo also today filed a civil forfeiture complaint against Levy, his cohorts, and a total of 16 corporations, seeking to recover damages to the Medicaid program. The suit seeks $47,000,000 in damages, representing the amount of Medicaid funds received by the defendants as part of their scheme to hide Levy’s involvement. The suit also seeks triple that amount and additional penalties for fraud under New York’s False Claims Act and health care fraud statutes.

A Kings County Grand Jury indicted Levy and his cohorts on counts of Grand Larceny in the First Degree and Health Care Fraud in the First Degree for their roles in operating ANR Advance Home Care Inc, located on Avenue U in Brooklyn. In addition, Levy was charged with Money Laundering in the Second Degree for allegedly attempting to conceal the proceeds of the crimes. All defendants were also indicted for conspiracy to defraud Medicaid.

Additional counts of Grand Larceny, Health Care Fraud, Money Laundering, and Conspiracy were filed against Levy due to his prohibited control and interest in the two ambulette companies and three medical clinics. In one aspect of this scheme, Medicaid patients allegedly were treated at Levy’s various clinics by bogus, unlicensed doctors. Thereafter, a licensed physician would sign off on patients’ charts brought to him in bulk by individuals operating with Levy. Medicaid was then billed for these services as if a licensed physician had cared for the patients. These clinics - located at 2015 Bath Avenue, 2875 W Eighth Street, and E 16th Street and Kings Highway, and incorporated under the names Rainbow Medical, P.C. and Bath Medical, P.C. - catered to the elderly Russian population of the Brighton Beach area of Brooklyn

The following defendants are named in today’s indictment: Alexander Levy, 54, Staten Island NY;
Zona Castellano, 69, Brooklyn NY; Aaron Bethea, 53, Brooklyn, NY; Leonid Sklyar, 30, Brooklyn NY; Yelena Bogatyrov, 43, Brooklyn NY; and Arthur Gutman, Israel. They were all named in the civil complaint, in addition to Joseph Castellano, Oksana Levondovych, and Adam Blair.

In addition to these six individuals, seven corporations were also indicted: ANR Advanced Home Care Inc.; Ambulette P.R.N., Inc. d/b/a New York City Ambulette; Global Line Transportation, Inc.; Bath Medical, P.C.; Rainbow Medical, P.C.; Bath Management, Inc.; and Meridian Construction & Development, LLC.

The charges against the defendants are merely accusations, and the defendants are presumed innocent until and unless proven guilty.

New Yorkers are urged to report cases of suspected Medicaid fraud to the Attorney General’s toll-free Medicaid Fraud Hotline, at 1-866-NYS-FIGHT (1-866-697-3444).

The criminal case is being prosecuted by Attorney General Cuomo’s Medicaid Fraud Control Unit’s New York City Regional Office. Assisting in the investigation are Investigator Mark Morgan, and Auditors Thomasina Smith and Kashmir Singh. The civil case is being handled by Special Assistant Attorney General Andrew Gropper of the Medicaid Fraud Control Unit’s Civil Unit.