Fraudsters like words such as extravagant, lavish, palatial, luxurious and opulent. And, they’ll do anything to live that kind of lifestyle, even if it means stealing from others to achieve their dream. Three managers of a now closed Westminster, Massachusetts transportation company were recently sentenced to probation for their part in a Medicaid fraud scheme that involved billing Medicaid for almost $19 million in transportation services that were not necessary or never provided. (They got off pretty easy, while the fate of the company owner is yet to be decided.)

Today’s fraud article explains that for more than four years, the company – Rite Way – did not submit their claims to MassHealth, the state’s Medicaid program, in the right way. In addition to allegedly submitting claims for unnecessary services, they included claims for people who were in the hospital, were no longer using the service provider or they were just plain dead.

The company, which had offices in Worcester, Barnstable, Norfolk and Hampden counties before closing their doors, mainly transported MassHealth beneficiaries via a non-emergency wheelchair van to methadone clinics. (Methadone is an opioid that is used to treat people in extreme pain. It can also be used to treat an addiction to heroin or narcotic painkillers.) Supposedly, Rite Way went about obtaining more clients the wrong way – by paying cash to MassHealth beneficiaries to recruit others to use its transportation services. (The government essentially paid to transport people who were probably addicted to painkillers to get even more of them. What a vicious cycle of dependency.)

The three company managers involved in the Medicaid fraud scheme were placed on probation. A 57-year-old man from Leominster received five years of probation and was ordered to pay $6,000 in restitution, $100 a month. A 52-year-old female manager from Abington also received five years of probation after receiving a 2 ½ year suspended jail sentence. (She perjured herself by making false statements during her testimony in front of a grand jury.) The former transportation manager will pay $2,662 in restitution at a rate of $45 a month. Another male 51-year-old from Winchendon must serve five years of probation and pay $13,500, $45 per month. All three of the defendants must have no further involvement with state or federal healthcare programs. (That will definitely put the brakes on ever committing this type of fraud again.)

So, what about the owner, you ask? The 57-year-old transportation owner is charged with four counts of medical assistance fraud, three counts of money laundering, two counts of larceny over $250 and one count of making a medical assistance bribe. (He supposedly submitted claims for wheelchair van transportation for people who were able-bodied and paid cash kickbacks to recruit other customers.) His case goes to trial in May 2019 and is predicted to last between three and four weeks. (Sounds costly.)

And, there’s more. Further research shows that he was charged with money laundering after investigators discovered that he moved about $5.5 million in profits from the company’s operating bank account into investment accounts and another $3 million into a new account under his wife’s name after MassHealth started suspending payments. (Let’s not forget that he also transferred titles to two homes to his wife as well.). He owned a home in Rindge, New Hampshire, a Maine beach house, a luxury townhouse in Florida and lots of other assets like real estate and vehicles. (He’s blaming his three “disgruntled” managers for the scam.)

I’m guessing that if convicted of Medicaid fraud, the former transportation company owner may have to change his vocabulary. Instead of living an “opulent” life with his wife, he may have to adjust to dreary, dank, cramped, noisy, and drab accommodations if convicted.

Today’s “Fraud of the Day” is based on an article entitled, 3 get probation in van service Medicaid fraud, must pay restitution,” published by Telegram & Gazette on June 4, 2018.

WORCESTER – Three former managers of a now-defunct Westminster transportation company were placed on probation and ordered to pay restitution Monday for their roles in what prosecutors allege was a scheme to fraudulently bill the state’s Medicaid program for nearly $19 million worth of transportation services that were never provided or were unnecessary.

The three defendants, Gary Carbonello, Lynn M. Maguire and Dwayne D. Pelkey, pleaded guilty to related charges in Worcester Superior Court. Charges are pending against the company, Rite Way LLC, and its former owner, Michael J. Davini of Rindge, New Hampshire.

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Larry Benson, Senior Director of Strategic Alliances, LexisNexis Risk Solutions - Government

Larry Benson is responsible for developing strategic partnerships and solutions for the government vertical. His expertise focuses on how government programs are defrauded by criminal groups, and the approaches necessary to prevent them from succeeding.

Mr. Benson has 30 years of experience in sales and business development. Before joining LexisNexis® Risk Solutions, he spent 12 years founding and managing two software technology startups. During the 1990s he spent 10 years as a Regional Director helping to grow a New England-based technology company from 300 employees to 7,000. He started his career with Martin Marietta Aerospace working on laser guided weapons and day/night vision systems.

A sought-after speaker and accomplished writer, Mr. Benson is the principal author of “Fraud of the Day,” a website dedicated to educating government officials about how criminals are defrauding government programs. He has co-authored WTF? Where’s the Fraud? How to Unmask and Stop Identity Fraud’s Drain on Our Government, and Data Personified, How Fraud is Changing the Meaning of Identity.

Benson holds a Bachelor of Science in Physics from Albright College, and earned two graduate degrees – a Master of Business Administration from Florida Institute of Technology, and a Master of Science in Engineering from Lehigh University.