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Post date: June 20 2016

A.G. Schneiderman Announces Arrest Of Bronx Clinic Owner For Alleged Five Million Dollar Medicaid Fraud

Joseph Wright Allegedly Duped Innocent New Yorkers Into Receiving Unnecessary Medical Treatment By Luring Them To His Clinic “Assistance By Improv, Inc.”  With False Promises Of Affordable Housing

NEW YORK—Attorney General Eric T. Schneiderman today announced the arrest of Joseph Wright, 52, of Middletown NY, for allegedly stealing over $5 million dollars from Medicaid. Prosecutors allege that Wright, as owner of a purportedly not-for-profit organization “Assistance By Improv II, Inc.” (ABI), located at 953 Southern Boulevard in the Bronx, lured thousands of low-income New Yorkers to ABI with the promise of affordable housing, arranged to have them subjected to unnecessary medical tests and then filed false claims for reimbursement with the State Medicaid program. 

“This defendant allegedly took advantage of the hopes and needs of the most vulnerable of our neighbors to line his pockets with millions of taxpayer dollars,” Attorney General Schneiderman said. “This elaborate scheme drained Medicaid of important resources that should have been used on medical patients in need, and my office won’t stand for those who seek to use the program as a personal piggy bank.”

NYS Medicaid Inspector General Dennis Rosensaid, “This joint investigation and today's arrests serve notice to those who attempt to exploit New York's Medicaid program for their personal gain. My office and our partner agencies will continue to work together to root out fraud, waste and abuse and hold wrongdoers fully accountable.”

Prosecutors alleged in papers filed in court that Wright unlawfully owns and operates ABI as a medical mill that masquerades as a charitable housing organization. ABI claims in newspapers, on television and on city bus advertisements to be dedicated to providing affordable housing for developmental disabled New Yorkers. Prosecutors allege that Wright ignored ABI’s professed charitable mission and duped potential clients, most of whom were Medicaid recipients, into surrendering their personal health care information and undergoing purported medical screening to qualify for housing. 

Prosecutors allege that potential clients were directed to see various doctors and counselors at ABI, and were often subjected to unnecessary purported medical tests and procedures. Thereafter, staff at ABI under the direction of Wright, and at the behest of various doctors and counselors employed by ABI, submitted false claims for reimbursement to Medicaid for services allegedly rendered to the Medicaid recipients who provided Wright, his staff and ABI with their client identification numbers.

Wright, prosecutors allege, used the doctors’ and patients’ Medicaid identification numbers to submit a staggering volume of claims for services allegedly rendered to Medicaid recipients. In an eight-month span, eight Medicaid providers employed by Wright and ABI submitted over 125,000 claims for medical services allegedly rendered to Medicaid recipients. The value of these claims totaled in excess of $1o million dollars, for which Medicaid reimbursed these eight doctors over $5 million dollars, and they in turn paid Wright millions of dollars.

Prosecutors allege that Medicaid paid these claims based upon each doctor’s representation as to the accuracy and veracity of each claim submitted. An overwhelming number of these claims though were for treatment in connection with a primary diagnosis of “counseling and advice on contraception” or “other contraceptive/sex counseling” and bore no resemblance to the purported treatment actually provided, if any. Often these claims were completely fictitious and factually impossible. According to claims records maintained by the Medicaid program, prosecutors allege, these doctors saw hundreds of patients a day and each patient received the same medical diagnosis. Many of the doctors practiced outside their field of specialty according to their claims data and the claimed medical diagnosis and treatment was often one each doctor was unqualified to give.  Furthermore, given the number of claims filed each day by each doctor, the doctors could not have physically rendered the treatment they claimed to have provided. 

To date, the Attorney General’s investigation uncovered no evidence that any of ABI’s patients ever received any housing despite being subjected to unnecessary medical examinations, medical tests, and multiple visits to ABI.

Wright, arrested today by the Attorney General’s Medicaid Fraud Control Unit (MFCU), is charged with Grand Larceny in the First Degree, Health Care Fraud in the First Degree and Insurance Fraud in the Second Degree. Grand Larceny in the First Degree and Health Care Fraud in the First Degree are both class B felonies with a maximum term of incarceration of 8 1/3 to 25 years in State prison.

Insurance Fraud in the Second Degree is a class C felony with a maximum term of incarceration of 5 to 15 years in State prison.

Wright was arrested and is expected to be arraigned later today in New York City Criminal Court, Bronx County.

Today, in addition to Wright’s arrest, the Attorney General’s Medicaid Fraud Control Unit executed a search warrant at the premises of ABI at 953 Southern Boulevard, Bronx, New York.

The Attorney General’s Office thanks the New York State Office of the Medicaid Inspector General (“OMIG”), Computer Services Corporation, the New York City Human Resources Administration (“HRA”) and the New York Office of the United States Department of Health and Human Services, Office of the Inspector General, Office of Investigations for their valuable contributions to this investigation. 

The case was investigated by Special Investigators Denitor Guerra and Thomas Dowd with assistance from Supervising Investigator Dominick DiGennaro, all under the supervision of Deputy Chief Investigator Kenneth Morgan. OMIG Investigator Nigill Johnson also assisted in the investigation. The audit investigation was conducted by MFCU Auditor Investigator Lisandra Defex under the supervision of Principal Auditor Investigator Emmanuel Archer and Regional Chief Auditor Thomasina Smith. Also assisting in the audit investigation were Stephanie Paton and Margaret Tsui of OMIG and Leslie Dykeman from Computer Services Corporation.

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

The case is being prosecuted by MFCU Special Assistant Attorneys General Alyssa A. Preston and Mark P. Cannon with the assistance of New York City Regional Director Christopher M. Shaw. Thomas O’Hanlon is the MFCU Downstate Chief-Criminal Investigations. The Medicaid Fraud Control Unit is led by Director Amy Held and Assistant Deputy Attorney General Paul Mahoney.  The Criminal Justice Division is led by Executive Deputy Attorney General Kelly Donovan.

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