NYS Office of the Comptroller DiNapoli: Two Capital Region Residents Indicted for $1 Million Medicaid Transportation Fraud Scheme

 

The two principles of Phinaliz Communications LLC, Philip Mtui and Mbaga Kaiza were indicted for their alleged role in a scheme to steal more than $1 million from Medicaid by filing false and inflated reimbursements for transportation services, New York State Comptroller Thomas P. DiNapoli announced today on behalf of the joint state, local and federal investigating agencies.

“Mtui and Kaiza’s alleged Medicaid fraud tried to undermine the integrity of a vital program,” DiNapoli said. “It also diverted funds that should have gone to legitimate health care needs and services for vulnerable New Yorkers. Our joint investigation will ensure justice is served in this case and I hope it is a warning to anyone who would try and defraud New York’s Medicaid system."

Oneonta Police Chief Christopher Witzenburg said, “This operation is a perfect example of what can be accomplished through interagency cooperation. The positive impact of which has resulted in a significant decrease in funding that fueled large scale substance abuse and quality of life issues in our community.”

“This joint investigation revealed that the defendants sought to obtain funds from the Medicaid program to which they were not entitled,” stated Special Agent in Charge Naomi Gruchacz with the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG). “HHS-OIG works with our law enforcement partners to ensure that individuals who become involved in fraud schemes that exploit federal health care programs to satisfy their own greed are held accountable.”

The defendants were partners in Phinaliz Communications, an Otsego County-based transportation provider for Medicaid recipients. Patients can use participating transportation services, which are billed to Medicaid, for legitimate medical appointments. Over the course of four years, Mtui, 46, and Kaiza, 47, allegedly sought and received payments for rides that never happened and billed multiple times for rides that did occur. In some instances, they allegedly paid kickbacks to Medicaid enrollees for using their transportation service and providing their patient information to help facilitate the fraud. It is estimated that they stole more than $1 million from Medicaid.

Numerous local, state, and federal authorities assisted in the investigation that uncovered the alleged fraud, including Comptroller DiNapoli’s Office, the Otsego’s County Sheriff’s Office, the Otsego County District Attorney's Office, the Oneonta Police Department, the U.S. Department of Health and Human Services Office of the Inspector General, the Otsego County Department of Probation, the Otsego County Department of Social Services, the New York State Department of Motor Vehicles, the New York State Department of Financial Services - Criminal Investigations Unit, the Oneida County Sheriff’s Office, the Saratoga County Sheriff’s Office, and the East Greenbush Police Department.

Mtui and Kaiza were charged with grand larceny in the first degree and arraigned before Judge John F. Lambert in Otsego County Court. They are due back in court on May 6.

The charges filed in this case are merely accusations and the defendants are presumed innocent unless and until proven guilty in a court of law.

Since taking office in 2007, DiNapoli has committed to fighting public corruption and encourages the public to help fight fraud and abuse. New Yorkers can report allegations of fraud involving taxpayer money by calling the toll-free Fraud Hotline at 1-888-672-4555, by filing a complaint online at https://www.osc.state.ny.us/investigations, or by mailing a complaint to: Office of the State Comptroller, Division of Investigations, 8th Floor, 110 State St., Albany, NY 12236.