Attorney General Cuomo Announces Conviction Of Wny Hospital Contractor Who Bribed County Worker In Medicaid Scam

BUFFALO, NY (July 19, 2010) - Attorney General Andrew M. Cuomo today announced the criminal conviction and civil settlement involving a Western New York hospital contractor who bribed a county worker as part of an extensive Medicaid scam. With this conviction, Cuomo’s Medicaid Fraud Control Unit (MFCU) has now topped $800 million in court-ordered recoveries.

Deborah Kantor, 55 of Tonawanda, is the owner and operator of H.I.S. Holdings, Inc. (H.I.S.), a debt collection agency that serviced Niagara Falls Memorial Medical Center and other Western New York hospitals. Kantor and H.I.S. bribed Michael Albrecht, a Niagara County Department of Social Services employee, in exchange for Medicaid client identification numbers and his approval of Medicaid applications that had incomplete or false information.

From 2000 to 2007, Kantor and H.I.S. paid Albrecht more than $17,749 in checks and cash as part of the scheme, including $50 for each active Medicaid client identification number that he provided. By obtaining Medicaid client identification numbers and the approval of sub-standard Medicaid applications, Kantor enabled her hospital clients to unknowingly obtain reimbursement from Medicaid for claims that should not have been paid. She benefitted from the scheme by getting a percentage of the fraudulent reimbursements.

Today’s court action also settles a lawsuit filed by the Attorney General’s Office seeking recovery of approximately $725,000 from Kantor, which represents the amount of fraudulent Medicaid benefits the State paid as a result of the scheme.

“This Medicaid scam involved bribes, kickbacks, and the unauthorized gathering of confidential information from government computers,” said Attorney General Cuomo. “My office’s actions to end abuses of the Medicaid system have resulted in unprecedented court ordered recoveries topping $800 million, a vital return of taxpayer money during a time of economic uncertainty and belt-tightening across New York.”

Kantor pleaded guilty today to one count of Bribery in the Third Degree and three counts of Rewarding Official Misconduct in the Second Degree. A guilty plea was also entered on behalf of her company, H.I.S., to one count of Bribery in the Second Degree. Kantor faces a maximum sentence of 7 years in prison on these charges, while H.I.S. faces a fine of up to $10,000 or twice the amount of the corporation’s gain from the crime, whichever is greater.

In January, Kantor and H.I.S., along with another H.I.S. employee, Amy Gardner, 31, of Tonawanda, were found guilty, after trial by a Niagara County jury, for submitting a Medicaid application that they knew falsely reported the address of the applicant in order to get the Niagara County Department of Social Services to approve the applicant’s Medicaid eligibility.

Kantor will be sentenced on all charges related to the scheme on August 12. Albrecht previously pleaded guilty to Attempted Bribe Receiving in the Third Degree, a class E felony, and will be sentenced in September.

All proceedings took place before the Honorable Sara Sheldon Sperrazza in Niagara County Court. Attorney General Cuomo thanked the administration and staff of the Niagara County Department of Social Services for their cooperation and assistance in the investigation.

Today’s convictions and settlement brings the total court-ordered monetary recoveries by Attorney General Cuomo’s Medicaid Fraud Control Unit since January 1, 2007 to over $800 million. Some examples of Attorney General Cuomo’s Medicaid fraud cases include:

  • Last week, two Brooklyn-based Medicaid providers pleaded guilty to grand larceny and were ordered to repay $44 million to taxpayers.
  • New York state reached a settlement for $45 million as part of a $520 million federal and multi-state agreement with AstraZeneca concerning allegations that the company provided kickbacks to doctors and engaged in an off-label marketing campaign to promote its antipsychotic drug Seroquel.
  • A $24 million settlement with three home health agencies that used aides with little or no required training.
  • New York secured $66 million from Pfizer in the largest health care fraud settlement ever for kickbacks and illegal marketing campaigns.

The criminal case was prosecuted by Gary A. Baldauf, Director of Attorney General Cuomo’s Medicaid Fraud Control Unit’s Buffalo Regional Office. Senior Special Investigator Kathleen Donahue and Special Auditor/Investigator Mary Henry assisted in conducting the investigations. The civil case was brought by Special Assistant Attorney General Jacob M. Bergman of the Medicaid Fraud Control Unit’s Civil Enforcement Division.