March 31, 2015 5:07 p.m. ET
Twenty-three people, including nine doctors, were charged on Tuesday with taking part in a health-care-fraud scheme that raked in reimbursements from unnecessary medical services provided to poor New Yorkers.
In a 199-count indictment, Brooklyn District Attorney Kenneth Thompson said that Eric Vainer, a 43-year-old Manhattan resident, and his mother Polina Vainer, of Staten Island, directed the scheme.
Neither of the Vainers could be reached for comment on Tuesday, and Mr. Thompson said that Mr. Vainer was arrested earlier in the day in Florida. There was no answer at the two medical-supply companies or management company that the indictment identified as being owned by or affiliated with the Vainers.
According to the indictment, the co-conspirators went to local welfare agencies and homeless shelters, seeking out poor people with Medicaid cards. Luring them with promises of free shoes, the co-conspirators took people to five medical centers in Brooklyn and the Bronx, where they received a battery of unnecessary tests, including pain-management evaluations, cursory foot exams and cardiograms, according to the indictment. Many left with unnecessary braces and medical devices, according to the indictment.
The purpose of the tests and equipment, Mr. Thompson said, was to bill Medicaid, Medicaid managed-care organizations and Medicare. Some medical providers paid Mr. Vainer a kickback, Mr. Thompson said, while others split insurance proceeds with him.
“These defendants exploited poor people to make money,” Mr. Thompson said.
Thousands of people may have been victims of the scheme, he added, which took in almost $7 million in two years.
Mr. Vainer and the other defendants face an array of charges, including enterprise corruption, money laundering, health-care fraud, grand larceny and falsifying business records. The doctors included podiatrists, cardiologists, a psychiatrist and pain-management specialists.
Mr. Thompson called it a “Medicaid mill.”
Mr. Vainer and his mother owned a medical-equipment business that worked with the clinics to carry out the fraud, the prosecutor said.
The years-long probe involved federal and state investigators, wiretaps and undercover agents posing as patients, Mr. Thompson said. In one recorded exchange, a man identified by Mr. Thompson as Mr. Vainer referred to the patients as “guinea pigs.”
Twenty-three people, including nine doctors, were charged on Tuesday with taking part in a health-care-fraud scheme that raked in reimbursements from unnecessary medical services provided to poor New Yorkers.
In a 199-count indictment, Brooklyn District Attorney Kenneth Thompson said that Eric Vainer, a 43-year-old Manhattan resident, and his mother Polina Vainer, of Staten Island, directed the scheme.
Neither of the Vainers could be reached for comment on Tuesday, and Mr. Thompson said that Mr. Vainer was arrested earlier in the day in Florida. There was no answer at the two medical-supply companies or management company that the indictment identified as being owned by or affiliated with the Vainers.
According to the indictment, the co-conspirators went to local welfare agencies and homeless shelters, seeking out poor people with Medicaid cards. Luring them with promises of free shoes, the co-conspirators took people to five medical centers in Brooklyn and the Bronx, where they received a battery of unnecessary tests, including pain-management evaluations, cursory foot exams and cardiograms, according to the indictment. Many left with unnecessary braces and medical devices, according to the indictment.
The purpose of the tests and equipment, Mr. Thompson said, was to bill Medicaid, Medicaid managed-care organizations and Medicare. Some medical providers paid Mr. Vainer a kickback, Mr. Thompson said, while others split insurance proceeds with him.
“These defendants exploited poor people to make money,” Mr. Thompson said.
Thousands of people may have been victims of the scheme, he added, which took in almost $7 million in two years.
Mr. Vainer and the other defendants face an array of charges, including enterprise corruption, money laundering, health-care fraud, grand larceny and falsifying business records. The doctors included podiatrists, cardiologists, a psychiatrist and pain-management specialists.
Mr. Thompson called it a “Medicaid mill.”
Mr. Vainer and his mother owned a medical-equipment business that worked with the clinics to carry out the fraud, the prosecutor said.
The years-long probe involved federal and state investigators, wiretaps and undercover agents posing as patients, Mr. Thompson said. In one recorded exchange, a man identified by Mr. Thompson as Mr. Vainer referred to the patients as “guinea pigs.”
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