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Source: US State of New York

Former Owner and CEO of Drug Treatment Facility Personally Liable for $3 Million
for Defrauding the State, and Also Agrees to a Ban from the Medicaid Program

NEW YORK – New York Attorney General Letitia James today announced an agreement with A.R.E.B.A.-CASRIEL, Inc. d/b/a/ Addiction Care Interventions Chemical Dependency Treatment (ACI) and its majority owner, Steven Yohay, regarding multiple schemes that defrauded the state Medicaid program, as part of a joint state-federal investigation. Filed this past Friday in the United States District Court for the Southern District of New York, ACI and Yohay admitted that they failed to respond to reports of wrongdoing — which the investigation substantiated — that ACI engaged in multiple illegal schemes, including that its employees bribed people experiencing homelessness into getting inpatient treatment there.

“Exploiting individuals who are experiencing homelessness is disgraceful,” said Attorney General James. “My office will use its power to seek out Medicaid providers looking to defraud the Medicaid system and New York state taxpayers. I will not stand idly by while those funds get misused by bad actors who wish to wrongfully collect funds that will be so desperately needed elsewhere.”

ACI admitted to many instances of deceitful and fraudulent behavior, such as: paying an individual for a “no-show” job at ACI, while that person worked as a full-time employee at another organization with the same function as ACI; encouraging “outreach” drivers who regularly bribed potential Medicaid patients into seeking inpatient treatment at ACI, many of whom were experiencing homelessness at the time; and allowing Medicaid patients to enroll in its inpatient treatment program despite not being evaluated by a qualified health care professional, a violation of New York enrollment practices. Instead of the evaluations, ACI used fraudulent signatures from medical providers that were photocopied onto medical forms in order to falsely substantiate an evaluation by a medical provider where none had occurred. 

Among these allegations, the most serious incidents took place between January 2014 and December 2019, when ACI’s “outreach” drivers coerced out-of-state residents to enroll in ACI’s inpatient treatment program by offering them money, drugs, and/or alcohol. ACI and Yohay admitted that most of these out-of-state enrollees were from New Jersey, where many were already enrolled in New Jersey’s Medicaid program.

ACI has agreed to reimburse the New York state Medicaid program in the amount of $3 million dollars, and Yohay personally agreed to reimburse the New York state Medicaid program another $3 million dollars. Additionally, all current owners of ACI, including Yohay’s brother, agreed to divest themselves of their ownership interests in ACI. Yohay has also agreed to be banned from participation as a provider in any government-funded health care program for fifteen years. The new owners of ACI have agreed to be bound by the terms of this agreement, which includes changes to the ACI program to ensure it steers clear of future illegal conduct. The case against ACI and Yohay was initiated by a former employee and whistleblower, who will receive a portion of the agreement. The whistleblower lawsuit was filed under the qui tam provisions of the federal and New York State False Claims Act, which allows average citizens to file civil actions on behalf of the government and to share in the proceeds of any recovered funds.

New York’s claims in the qui tam case were handled by the Medicaid Fraud Control Unit (MFCU) in the Office of the Attorney General (OAG), which worked closely with the U.S. Attorney’s Office for the Southern District of New York.

This is the latest in a long line of work by Attorney General James to protect New Yorkers from those who seek to defraud the state Medicaid program. In October 2020, Attorney General James charged a Bronx clinic-owner for stealing $4 million from taxpayers in a scheme where the owner submitted false claims for back braces. In the same month, Attorney General James cracked down on non-licensed individuals who were providing physical therapy services to unknowing New Yorkers and submitting claims to Medicaid.

The Attorney General would like to thank the New York State Office of Addiction Services and Supports, and the United States Department of Health and Human Services’ Office of the Inspector General, for their valuable assistance and cooperation in this investigation. 

MFCU’s investigation was led by Detectives Alexander Lipkin and Larry Williams with the assistance of Detective Supervisor Dominick DiGennero, under the supervision of Deputy Chief Kenneth Morgan. The underlying financial audit was completed by Senior Auditor Investigator Svetlana Volchyok with the assistance of NYC Regional Deputy Chief Auditor Jonathan Romano and NYC Regional Chief Auditor Thomasina Smith. Also assisting in the investigation were Confidential Legal Assistant Victoria Sepe, with the assistance of Supervising Legal Assistant Wendy E. Dorival and Lead Data Scientist Si Lok Chao.

This matter is being prosecuted by Special Assistant Attorneys General David G. Abrams and Amy B. Delfyett, with assistance from Civil Enforcement Chief Alee N. Scott and NYC Regional Director Christopher M. Shaw. MFCU is led by Director Amy Held and Assistant Deputy Attorney General Paul J. Mahoney. The Division of Criminal Justice is led by Chief Deputy Attorney General for Criminal Justice José Maldonado and overseen by First Deputy Attorney General Jennifer Levy.

Reporting Medicaid Provider Fraud: The Medicaid Fraud Control Unit of the Office of the New York State Attorney General enforces laws that protect the public by addressing Medicaid provider fraud and that protect nursing home residents from abuse and neglect. If an individual believes they have information about Medicaid provider fraud or about an incident of abuse or neglect of a nursing home resident, they can file a confidential complaint online on the OAG website at https://ag.ny.gov/nursinghomes, or by calling the MFCU hotline at 212-417-5397. If the situation is an emergency, please call 911.

MFCU receives 75 percent of its funding from the U.S. Department of Health and Human Services under a grant award totaling $60,071,905 for Federal fiscal year (FY) 2019-20, of which $45,053,932 is federally funded. The remaining 25 percent of the approved grant, totaling $15,017,973 for FY 2019-20, is funded by New York state. Through MFCU’s recoveries in law enforcement actions, MFCU regularly returns more to the state than it receives in state funding.

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