Topics
More on Compliance & Legal

UPDATED: 9 doctors among those indicted in $6.9 million Medicaid, Medicare fraud scheme

Sneakers used as bait to lure low-income and homeless people to corrupt medical clinics, indictment alleges.

Susan Morse, Executive Editor

Image of New York City skyline from Wikipedia.

In an effort to scam Medicare and Medicaid out of $6.9 million, nine doctors and 14 other defendants recruited New York City's low-income and homeless population to corrupt medical clinics with the offer of free sneakers, according to the Brooklyn District Attorney's Office.

Recruiters approached people outside of homeless shelters and welfare offices and offered free sneakers, boots or shoes to those who could produce a Medicaid card, according to a March 31 report from Brooklyn District Attorney Ken Thompson.

Those who could produce cards were taken to a medical clinic in Williamsburg or the Bronx and given the free footwear along with unnecessary tests and medical equipment, according to the indictments.

The recruiters operated in areas of Brooklyn, the Bronx, Queens and eastern New York, according to Thompson.

[Also: Running list of notable 2015 healthcare frauds]

The investigation began in July 2012 after a Brooklyn resident told authorities she was approached by recruiters and taken to one of the clinics where she met with a podiatrist and was given a knee brace and sneakers. When she said she did not need the knee brace, she was told she had to take it to get the sneakers, according to the indictment.

The charges against 23 men and women, and eight companies, allege that between 2012 and 2014, the defendants billed more than $6.9 million in fraudulent claims to Medicaid, Medicaid-managed health care organizations and Medicare.

Clients were frequently referred for a battery of other medically unnecessary tests and procedures, including vein tests, pain management evaluations, physical therapy and cardiograms, according to the indictments.

Eric Vainer, 43, was the mastermind behind the operation, according to Thompson, while his mother, Polina Vainer, 66, was his second-in-command, he said.

Vainer and his mother owned a durable medical equipment business, T.W. Capital, d.b.a West 5th Medical Supply, according to the report.

Defendants include podiatrists, a vascular surgeon, cardiologists, pain management specialists, psychiatrists, nurse practitioners, physician assistants, technicians, office staff, recruiters, managers and billers, according to the release.

The 199-count indictment includes charges of enterprise corruption, first-degree money laundering, first-degree scheme to defraud, first-degree health care fraud, first-degree falsifying business records, first-degree offering a false instrument for filing, fourth-degree grand larceny, fourth-degree attempted grand larceny, fourth-degree conspiracy, social service law, petty larceny and attempted petty larceny.

If convicted on the top count, each defendant faces up to 25 years in prison.