DA Alleges Medicaid Fraud Scheme Giving Free Sneakers to Homeless

By FARAH PRINCE

 Brooklyn DA Ken Thompson on Tuesday announced the indictment of 23 co-conspirators, including nine doctors, and eight companies in a alleged criminal enterprise accused of defrauding Medicaid of $7 million.

The 199-count indictment asserts that the defendants preyed on low-income and homeless New Yorkers by luring them with free sneakers in exchange for unnecessary medical tests and medical equipment, like ankle braces.

“At the heart of this healthcare scheme,” said Thompson at a Brooklyn press conference, “was the exploitation of poor people.”

After a complaint made in July 2012 to the District Attorney Action Center, Thompson’s office started a two year-investigation, from October 2012 to September 2014, which included sending at least 10 undercover agents to clinics involved in the scheme resulting in video and wiretaps of the allegedly fraudulent activities.

At the heart of the enterprise Eric Vainer, 43, the alleged leader of the scheme and his mother Polina Vainer, 66, who was his second-in-command, according to the indictment. Eric and his mother are accused of billing Medicaid for bogus claims for at least the two years since the investigation was launched.

The scheme included sending recruiters to stand outside homeless shelters, welfare offices and soup kitchens in all five boroughs and approach people on the street, offering them free sneakers if they could show proof of a Medicaid card. After the card was verified the recruiters would immediately take the person to one of Vainer’s clinics to be seen by a podiatrist for a multitude of unnecessary tests, which could be billed to Medicaid. Only after the tests were administered and a multitude of medical equipment, like orthotic insoles which costs almost $332 per person, also billable to Medicaid, were given, did the people get the free sneakers.

Thompson said that thousands of people were lured in by this scheme during the two-year investigation.

According to the indictment Vainer and his mother owned a durable medical equipment business that worked with the clinics to carry out the fraud. Working in these corrupt clinics were podiatrists, a vascular surgeon, cardiologists, pain management specialists, psychiatrists, and various medical personnel, like physician’s assistants and nurse practitioners.

“That so many doctors allegedly participated in this elaborate scheme to defraud a health care system designed to help the poor is truly disgraceful.” Thompson declared in a press statement.

The 23 defendants named in the indictment were arraigned throughout the day at Brooklyn Supreme Court on Tuesday morning where they were charged with various counts of fraud and grand larceny. If convicted they face up to 25 years in prison.

Eric Vainer was arrested Tuesday morning at 6 a.m. in Florida, apparently on vacation.