A.G. Schneiderman Announces Felony Conviction Of NYC Ambulette Company For $560k In Medicaid Fraud

NEW YORK – Attorney General Eric T. Schneiderman today announced the conviction of Majestic Transportation, Inc., an ambulette company located in Brooklyn, for illegally subcontracting Medicaid ambulette services to a transportation company that never enrolled in the New York State Medicaid program, a practice prohibited by state law. Majestic pleaded guilty today in Kings County Supreme Court to a felony Grand Larceny charge and agreed to repay the more than$560,000 it had illegally received.

“The theft of taxpayer funds, and especially dollars meant to provide health care to those in need, cannot be tolerated,” Attorney General Schneiderman said. “We will seek out and prosecute those who defraud the system, as we seek to protect those in need of care and the New York taxpayers.”

The conviction is the result of an investigation conducted by the Attorney General’s Medicaid Fraud Control Unit in conjunction with the Office of the Inspector General for United States Department of Health and Human Services and the United State Department of Justice as part of the Medicare Strike Force. The Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators working together to fight Medicaid and Medicare fraud. The New York State Attorney General’s Office has participated in the Medicare Fraud Strike Force since its inception in Brooklyn in 2009.

The joint investigation showed that, between December 2008 and July 2010, Majestic, located at 164 Brighton 11^th Street, filed hundreds of claims with the state Medicaid program falsely stating that it transported Medicaid recipients to medical appointments. In truth, the recipients were transported by ambulettes owned by I & E Transportation Inc., another Brooklyn transportation company that was never enrolled with Medicaid as an ambulette provider. Medicaid rules specifically prohibit an enrolled transportation provider from subcontracting medical transportation services to a company that has not been formally vetted and accepted by Medicaid as a provider of services. The rule ensures that Medicaid has the opportunity to review the qualifications and background, including the possible criminal background, of all prospective providers that render services to its members.

Majestic tried to subvert that rule by registering I & E Transportation’s vehicles with the Department of Motor Vehicles under Majestic’s company name. Each time I & E transported a Medicaid patient to a medical appointment, Majestic falsely billed Medicaid and claimed that it had provided the service. Based on those false claims, Medicaid paid Majestic a fee. Majestic retained 20% of the payment and I & E was paid the remaining 80%. In total, between December 1, 2008, and July 31, 2010, the State of New York overpaid Majestic $561,119 for ambulette services performed by I & E for 9,083 two-way ambulette trips.

In May, the manager of Majestic, Igor Gekatbarg, 60, of Brooklyn, pled guilty in Brooklyn Criminal Court to Falsifying Business Records in the Second Degree, a misdemeanor. As part of his plea agreement, Gekatbarg admitted that he knowingly filed false paperwork with New York State Office of the Medicaid Inspector General that stated Majestic owned ambulettes, which were actually owned by I & E Transportation. He was sentenced to a conditional discharge.

The Attorney General thanked the US Department of Health and Human Services, Office of Inspector General, the US Department of Justice and the New York State Office of the Medicaid Inspector General for providing valuable information and assistance during the investigation.

Special Assistant Attorney General Twan V. Bounds of the Medicaid Fraud Control Unit’s New York City Regional Office prosecuted the case under the supervision of Chief of Criminal Investigations – Downstate Thom O’Hanlon, Assistant Deputy Attorney General Paul J. Mahoney, Special Deputy Attorney General Monica Hickey-Martin and Executive Deputy Attorney General for Criminal Justice Kelly Donovan. The investigation was conducted by Special Investigator Alexander Kats and Senior Special Investigator Albert Maiorano under the supervision Deputy Chief Investigator Thaddeus Fisher. Special Auditor Investigator Kashmir Singh conducted the financial analysis under the supervision of Regional Chief Auditor Thomasina Smith.