A.G. Schneiderman Announces Four Arrests And $6.5 Million Settlement For Medicaid Fraud At Brooklyn Adult Day Health Care Facility

NEW YORK -- Attorney General Eric T. Schneiderman today announced that four employees of the Northern Manor Adult Day Health Care Program (Northern Manor ADHC), a health care facility in Brooklyn providing services to the elderly, have been arrested after a long-term investigation. As a condition of the settlement, Attorney General Schneiderman required that the facility be shut down. Furthermore, Northern Manor Multicare Center, Inc., the nursing home that operates the Brooklyn program, has agreed to pay a $6.5 million civil settlement in connection with this case.

The arrests and the civil settlement came after an investigation conducted by the Attorney General’s Medicaid Fraud Control Unit (MFCU) into the adequacy of adult day health care (ADHC) services provided at the Brooklyn facility. 

“Today’s charges detail yet another example of egregious, despicable abuse of public resources for personal gain, sending the message that criminal behavior will be met with the full force of the law,” said Attorney General Schneiderman. “Employees of this program will never again be able to steal from taxpayers and deprive vulnerable New Yorkers of the care they deserve.”

The investigation, which included several undercover visits by a healthy and vibrant senior working on behalf of the Attorney General’s Office, revealed that Northern Manor ADHC in Brooklyn was not providing services as represented in its claims for payment to Medicaid.  The covert portion of the investigation captured on video two medical employees at Northern Manor ADHC, one of whom was a registered nurse, falsifying the healthy senior citizen’s medical admissions forms to ensure he qualified for services that, in actuality, he was too healthy to receive. Further investigation uncovered that, in violation of state law, Northern Manor ADHC hired unqualified individuals to provide social work services, perform initial psycho-social assessments and diagnose the emotional and mental needs of registrants.  State law requires a qualified social worker to perform these services.  

In a separate civil settlement, Nanuet-based Northern Manor Multicare Center, Inc. the operator of the Brooklyn facility , admitted that it operated the medical-model ADHC program in Brooklyn, without a qualified social worker on staff from July 1, 2010 through on or about June 30, 2011, and that on 63 days during that time period Northern Manor Muliticare’s ADHC Program in Brooklyn admitted more registrants than it was certified to take by the New York State Department of Health.  Northern Manor Multicare Center, Inc. agreed to pay to the state $6,500,000 to resolve the Attorney General’s civil claims.  As part of the settlement, Northern Manor Multicare Center, Inc. agreed to close Northern Manor ADHC in Brooklyn and assist its patients in registering for placement in another state-approved ADHC program.

As an authorized ADHC facility, Northern Manor ADHC, located at One Prospect Park West in Brooklyn, is required by New York State to provide medical and psychosocial care to seniors who are unable to care for themselves independently during the day.  Such programs serve as an alternative to nursing home care for individuals needing both medical treatment and socialization during the day.  In return for providing seniors with five hours of supervision, medical care, and the opportunity to socialize outside their homes, nursing homes operating ADHC programs receive from Medicaid approximately 65% of the rate paid to nursing homes that provide room and board and skilled nursing facility services to full-time residents.

An Albany County grand jury returned an indictment against Gelena Deverman, 35, of  Cliffside Park, New Jersey, program director of Northern Manor ADHC, charging her with one count of Grand Larceny in the First Degree for causing Medicaid to pay Northern Manor ADHC over $1 million based on false claims.  Grand Larceny in the First Degree is a class “B” felony, with a maximum sentence of 25 years in state prison. 

Deverman was arraigned in Albany County Court by Judge Andrew G. Ceresia and pled not guilty.  She was released on her own recognizance.

Also arrested, in Kings County, were Larisa Rumynik, 48, of Brooklyn, a registered nurse, for Falsifying Business Records in the First Degree, an “E” felony; Liliya Kostyuk, 58, of Brooklyn, for Unauthorized Practice of a Profession, an “E” felony, and Valentina Shapran, 51, of Brooklyn, for Falsifying Business Records in the First Degree and Unauthorized Practice of a Profession. Rumynik, Kostyuk, and Shapran are expected to be arraigned in New York City Criminal Court, Kings County this afternoon. Each of them faces a maximum of four years in state prison.

The charges against the defendants are accusations, and they are presumed innocent until and unless proven guilty in a court of law. 

The investigation was led by Supervising Investigators Michael Casado and Natalie Shifrin, with the assistance of Deputy Chief Investigator Kenneth Morgan.  The audit was conducted by Special Auditor Investigators Ryan Rafferty and Yuriy Cheban, Associate Special Auditor Investigator David Verhey, and Principal Auditor Investigator Paul Erhardt, with the assistance of New York City Regional Chief Auditor Investigator Thomasina Smith.

The cases are being prosecuted by Twan V. Bounds, Deputy Regional Director of the MFCU New York City Office, and Special Assistant Attorney General Paul A. Clyne of the MFCU Albany Regional Office.  Special Assistant Attorney General Jill D. Brenner handled the civil settlement. Thomas O’Hanlon is MFCU’s Chief of Criminal Investigations – Downstate. MFCU is led by Acting Special Deputy Attorney General Amy Held.  The Criminal Division is led by Executive Deputy Attorney General Kelly Donovan. The charges are merely accusations and the defendants are presumed innocent unless and until proven guilty in court.