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A.G. Schneiderman Announces Indictment Of Bronx Medical Clinic Owner In Alleged $5 Million Medicaid Fraud

News from Attorney General Eric T. Schneiderman

FOR IMMEDIATE RELEASE
July 19, 2016

New York City Press Office / 212-416-8060
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A.G. SCHNEIDERMAN ANNOUNCES INDICTMENT OF BRONX MEDICAL CLINIC OWNER IN ALLEGED $5 MILLION MEDICAID FRAUD 

Joseph Wright Allegedly Duped Innocent New Yorkers Into Receiving Unnecessary Medical Treatment By Luring Them To His Clinic With False Promises Of Affordable Housing

NEW YORK — Attorney General Eric T. Schneiderman today announced the indictment and arraignment of Joseph Wright, 52, of Middletown NY, for his role in an alleged $5 million Medicaid fraud. Prosecutors allege that Wright, as owner of a purportedly not-for-profit organization called 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 New York Medicaid program. Wright was indicted on felony charges of Insurance Fraud in the Second Degree.

“The defendant in this case allegedly took advantage of the hopes and needs of vulnerable New Yorkers to line his own pockets with millions of dollars in taxpayer funds,” said Attorney General Schneiderman. “This elaborate scheme resulted in an alleged theft of over $5 million of Medicaid funds that should have been used to help medical patients in need.”

Prosecutors allege 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 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 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 purportedly rendered to Medicaid recipients. In an eight-month span, over 125,000 claims for medical services allegedly rendered to Medicaid recipients were submitted in the names of eight Medicaid providers actually employed by Wright and ABI. The value of these claims totaled in excess of $10 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 an overwhelming number of these claims 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 examinations to which the recipients were subjected, even if they had been proper. Often these claims were completely fictitious and factually impossible. According to claims records maintained by the Medicaid program, prosecutors allege, these doctors purportedly treated hundreds of patients a day and each patient received the same medical diagnosis. Many of the doctors’ claims were for services outside their field of specialty and for claimed medical diagnosis and treatments the doctor often 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 has 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, at the time of his arrest on June 20, 2016 by the Attorney General’s Medicaid Fraud Control Unit (MFCU), was 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. Bail was set at the time of Wright’s arrest in the amount of $500,000 bond or cash with an examination of surety and today, following Wright’s arraignment and oral argument, continued by the Hon. George Villegas in the same amount. The defendant pleaded not guilty and the case was adjourned until November 22, 2016. The investigation is ongoing.

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 and Deputy Chief Investigator Kenneth Morgan.  Dominick Zarrella is the Chief Investigator of the Office of the Attorney General. OMIG Investigator Nigill Johnson also assisted in the investigation. The audit investigation was conducted by MFCU Auditor Investigator Lisandra Defex with assistance from Principal Auditor Investigator Emmanuel Archer and Regional Chief Auditor Thomasina Smith. Also assisting in the investigation were Stephanie Paton and Margaret Tsui of OMIG and Leslie Dykeman from Computer Services Corporation.

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.

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

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