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Post date: February 25 2015

A.G. Schneiderman Announces $800,000 Settlement With Bronx Nonprofit That Diverted Money Intended For Services For Elderly

Regional Aid For Interim Needs (RAIN) Illegally Used Funds To Make Mortgage Payments On The Nonprofit’s Vacant Headquarters

Schneiderman: Nonprofit Organizations Are Not The Personal Piggy Banks Of Their Management

NEW YORK – Attorney General Eric T. Schneiderman today announced a settlement with nonprofit Regional Aid for Interim Needs, Inc., (RAIN) for diverting $800,000 in Medicaid funds to make mortgage payments on the agency’s administrative headquarters, in violation of the organization’s funding agreements with the NYC Human Resource Administration. RAIN provides home attendant services to elderly residents in the Bronx, including 11 senior centers, a Meals-on-Wheels program, two social service programs and three seniors housing complexes for the elderly.

“Nonprofits cannot be used as the personal piggy banks of their management,” Attorney General Schneiderman said. “This organization wrongly diverted taxpayer dollars meant to help the elderly to pay off a mortgage on a vacant building. My office will ensure state funds that are directed to provide important services to New York’s most vulnerable are used as intended.”

The Attorney General’s investigation found that, from 2003 to 2008, RAIN’s former Executive Director Louis Vazquez used nearly $800,000 in funds intended for the nonprofit’s home attendant service affiliate, RAIN HAS, in order to make mortgage payments on the agency’s administrative headquarters, at 811 Morris Park Avenue. At the time, the building was vacant and under construction. The diversion of Medicaid funds was in violation of RAIN HAS’s funding agreements with the NYC Human Resource Administration, which oversees the Medicaid funding that the city receives from the federal government and the New York State Department of Health.

Under today’s settlement, RAIN is required to repay the illegally diverted $800,000 back to the Medicaid program.

The Attorney General’s investigation also found that Vazquez inappropriately charged thousands of dollars of personal expenses to RAIN’s American Express card. A separate investigation initiated by the New York City Department of Investigation (DOI) resulted in the New York City Mayor’s Office of Contracts requiring the reconstitution of RAIN’s Board of Directors, the implementation of various internal controls and governance reforms. On September 30, 2013, in light of the findings of the Attorney General’s investigation, RAIN’s Board of Directors accepted Vasquez’s resignation. Under the settlement, the board is required to recover the money paid toward Vazquez’s personal charges.

The Attorney General would like to thank the New York City Department of Investigation for referring this matter to the Office and for its assistance in conducting the Investigation. The Attorney General would also like to thank the New York City Mayor’s Office of Contracts and the New York City Human Resource Administration for their assistance.

Forensic audit work was performed by Theresa White, Supervising Auditor and Milan Shah, Associate Special Auditor. The investigation was conducted by Special Assistant Attorney General Sally G. Blinken of the Medicaid Fraud Control Unit. The Medicaid Fraud Control Unit is led by Acting Director Amy Held. The Criminal Justice Division is led by Executive Deputy Attorney General Kelly Donovan.

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