Multi-Agency Investigation Uncovers Medicaid Transportation Fraud in the North Country

A recent federal/state multi-agency investigation revealed that, according to the investigators, several owners and operators of medical transportation companies based in Essex County were committing Medicaid transportation fraud. On April 17, 2020, the United States Department of Justice for the Northern District of New York (“USDOJ) announced in a press release that a North Country man, Anthony C. Armstrong, was sentenced for fraudulent activity surrounding Medicaid transportation services. 

The USDOJ claimed that Armstrong helped operate a transportation company called “Ti Taxi Inc. and also claimed that he had worked for various other transportation companies reimbursed by Medicaid.  According to the USDJ, during the period of 2015 to May 2018, Armstrong billed Medicaid, and received payment for, providing transportation to beneficiaries when those beneficiaries had driven themselves to their medical appointments, as revealed by investigation into telephone calls and text message exchanges.

The USDOJ also claimed that, as part of his alleged fraudulent scheme, Armstrong would make up identities for drivers, bill Medicaid for round-trip transportation when only one-way transportation was provided, and falsify locations in which beneficiaries were dropped off or picked up in order to increase the distance traveled to receive more money from Medicaid. Lastly, the USDOJ stated that the investigation further revealed that in return for scheduling appointments for medical transportation, Armstrong conspired with the owner of “Ti Taxi, Inc. to pay illegal kickbacks to Medicaid beneficiaries in the form of cash and cigarettes.

According to the USDOJ, Armstrong pleaded guilty to his charges and has been sentenced to 18 months in prison, three years of subsequent supervised release, and has been ordered to pay $50,000 in restitution. As a result of the investigation, which was conducted by the Federal Bureau of Investigation, the New York State Police’s Special Investigations Unit, and the Office of the New York State Inspector General, five other defendants were charged with crimes related to Medicaid transportation fraud and have pleaded guilty. Three of these defendants have already faced sentencing, which ranged from 25 days to one year in jail and $55,000 to $400,000 in restitution.

If you have any questions about this article or about Medicaid transportation service compliance matters, please contact David R. Ross, Esq., Senior Shareholder, via e-mail at dross@oalaw.com or via telephone at (518) 312-0167 or Associate Colleen R. Pierson, Esq. at cpierson@oalaw.com.