New York City Pharmacy Owner Arrested For $8.5 Million Fraud As Part Of Largest National Medicare Fraud Takedown In History

  Preet Bharara, the United States Attorney for the Southern District of New York, Diego Rodriguez, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), and Scott J. Lampert, the Special Agent-in-Charge of the New York Office of the Department of Health and Human Services, announced today that SAJID JAVED was charged with participating in a health care fraud scheme that used nine pharmacies in Brooklyn and Queens, New York, through which JAVED submitted more than $8.5 million in fraudulent claims to Medicaid and Medicare.  JAVED’s arrest is part of an unprecedented nationwide sweep led by the Medicare Fraud Strike Force, resulting in criminal and civil charges against 301 individuals, including 61 doctors, nurses, or other licensed medical professionals, for their alleged participation in health care fraud schemes involving approximately $900 million in false billings.  Twenty-three state Medicaid Fraud Control Units also participated in today’s arrests.  In addition, the HHS Centers for Medicare & Medicaid Services (“CMS”) also suspended a number of providers using its suspension authority provided in the Affordable Care Act.  This coordinated takedown is the largest in the history of the Medicare Fraud Strike Force, both in terms of the number of defendants charged and loss amount. 

JAVED was arrested earlier today and is expected to be presented in Manhattan federal court later this afternoon.

Manhattan U.S. Attorney Preet Bharara said: “As alleged, Sajid Javed induced others to forego their prescription medications for a kickback, and then fraudulently billed Medicare and Medicaid more than $8 million for the drugs that were never actually dispensed.  This alleged scheme not only put patients at risk, it also contributed to the multibillion-dollar pillaging of federally funded public health care subsidies.”

FBI Assistant Director-in-Charge Diego Rodriguez said: “These alleged criminals arrested around the country today and here in New York City are stealing money meant to help people seeking medical assistance.  It’s not a visible theft in public view, but the victims of the crime suffer greatly when they can’t get the assistance they need.  We are asking anyone who sees this sort of crime and fraud taking place to be vigilant, and report it to us at 1-800-CALL-FBI.”

HHS-OIG Special Agent in Charge Scott J. Lampert said: “Prescription drug scams, such as the one alleged in this case, work to undermine our nation's health care system.  Today’s arrests coordinated with our law enforcement partners serve as a stern warning to those who attempt to plunder government health programs meant to care for our most vulnerable citizens.”

As alleged in the Complaint and in other documents filed in Manhattan federal court[1]:

While owning and operating nine different pharmacies located in Brooklyn and Queens, SAJID JAVED conducted a multimillion-dollar scheme to defraud Medicare and Medicaid programs by seeking reimbursement for prescription drugs that were not distributed to customers.  Specifically, from January 2013 through December 2014, JAVED obtained more than $8.5 million in reimbursements from Medicare and Medicaid for prescription drugs that his pharmacies never actually dispensed.  JAVED defrauded Medicare and Medicaid into providing him with these reimbursements by obtaining prescriptions from other individuals, who were willing to forego delivery of the medications in exchange for a share of the reimbursed proceeds, in the form of kickbacks.  JAVED offered to pay, and did actually pay, kickbacks in furtherance of this scheme.

Including today’s enforcement actions, nearly 1,200 individuals have been charged in national takedown operations, which have involved more than $3.4 billion in fraudulent billings.  Today’s announcement marks the second time that districts outside Strike Force locations participated in a national takedown, and they accounted for 82 defendants charged in this takedown.

The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (“HEAT”), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  The Medicare Fraud Strike Force operates in nine locations and since its inception in March 2007 has charged over 2,900 defendants who collectively have falsely billed the Medicare program for over $8.9 billion. 

JAVED, 45, of Fresh Meadows, Queens, is charged with one count of health care fraud, which carries a maximum sentence of 10 years in prison, and one count of illegal remuneration in connection with a federal health care program, which carries a maximum sentence of five years in prison.  The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by the judge.

Mr. Bharara praised the investigative work of the FBI and HHS-OIG.

The prosecution of this case is being handled by the Office’s Complex Frauds and Cybercrime Unit.  Assistant United States Attorneys Christopher DiMase and Sarah Paul are in charge of the prosecution.

The charges in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

Engel On House Adjournment Following Democratic Sit-In

   Congressman Eliot Engel, a senior member of the House Energy and Commerce Committee, issued the following statement after the House adjourned till July:

"Standing alongside my colleagues earlier today, I said that Republicans had tossed out the old rules about how the House functions. We no longer debate legislation and vote on it on the House floor, because the Republican Majority has decided that they are too afraid. Too afraid to stop terrorists from buying guns, too afraid to allow background checks, too afraid of what research about gun violence will show. Let's face it, they are too afraid of the NRA. So instead of working to fix these problems by voting on a solution that 90 percent of Americans agree on, the Republican Majority has decided that the House won't do any more business this month. They have decided that they would rather abdicate their responsibilities and skip town than work to address the issue of gun violence, which is killing more and more Americans every day. Their behavior is shameful, but we will not be discouraged in the face of their cowardice.    

"Democrats will stay on the floor and continue to fight, even if Republicans walk away. Because this is too important for any more moments of silence.

"As we've said all day: no bill, no break."

NYC Public Advocate Letitia James Endorses Jamaal Bailey for New York State Senate

  Today, New York City Public Advocate Letitia “Tish” James endorsed Jamaal T. Bailey to represent the open Senate seat in the 36^th District.

“Jamaal Bailey has been working hard on behalf of his community, both as the Community Relations Director for Speaker Carl Heastie and as a District Leader of the 83^rd Assembly District. I am confident he will bring the same vigor and dedication to the people of the 36^th Senatorial District,” said Public Advocate James.

“I’m grateful for the support of Public Advocate James,” said Bailey. She has been a staunch activist for the people of New York City and I hope to do the same for the constituents of Mount Vernon and the Bronx when elected to the State Senate.”

Public Advocate Letitia James is the first citywide elected official to endorse Jamaal Bailey.

EDITOR'S NOTE:

The petitioning is still going on, and candidate Bailey must make it to the ballot first. 

49th Precinct Community Council Meeting Tuesday, June 28th 7:30 PM at 49th Precinct Community Center, 2121 Eastchester Road

COMPTROLLER STRINGER AUDITS FIND POOR OVERSIGHT, WEAK FINANCIAL MANAGEMENT AT TWO CITY CHARTER SCHOOLS

Construction and management contracts for millions were never put in writing, 

limiting ability to track how taxpayer dollars were spent

  Audits released today by New York City Comptroller Scott M. Stringer found poor financial oversight and weak management by the boards of trustees at two New York City charter schools, Bedford Stuyvesant New Beginnings Charter School and Merrick Academy Queens Public Charter School. Each school’s board of trustees oversees the institutions’ finances and management to ensure the resources are available for children to receive a quality education.

The two audits uncovered that both schools spent millions of taxpayer dollars on renovations and the purchase of services and supplies but didn’t keep proper or consistent financial records, including written contracts. The New Beginnings board spent nearly $1.7 million on renovations without written contracts, detailed project plans, or adequate evidence that the board of trustees even signed off on the spending. Merrick Academy substantially altered a $1.3 million contract for educational and administrative services without putting the changes in writing and incurred an additional $4.5 million in expenses to relocate and renovate a new school building without formal approval from the board.

“Ensuring that every dollar we spend on schools goes toward the education of the next generation must be our highest priority,” Comptroller Stringer said. “Verbal agreements and informal arrangements to spend hundreds of thousands of taxpayer dollars are neither good business practice nor the appropriate way to fund our children’s education. There must be accountability to protect these resources from waste, fraud and abuse.” 

The separate audits reviewed oversight of financial operations by the board of trustees at the Bedford Stuyvesant New Beginnings Charter School and Merrick Academy Queens Public Charter School from July 1, 2012 through June 30, 2014. New Beginnings is located in Bedford Stuyvesant, Brooklyn, and is authorized by the New York City Board of Education; in Fiscal Year 2013, it served K-5 and K-6 in Fiscal Year 2014. Merrick Academy is a SUNY-authorized charter school in Springfield Gardens, Queens, which served students in grades K-6 but now serves students in grades K-5.

Major findings at New Beginnings:

The New Beginnings Board of Trustees did not responsibly manage the school’s finances 

• New Beginnings officials told auditors that they did not solicit competitive proposals for nearly $1.7 million of construction costs, which means the school might have overpaid for the work. Though the board expressly told auditors that there had not been competitive bidding for the construction, after school officials saw the audit’s preliminary findings, they claimed to have received documents from the former executive director that they said showed a competitive bidding process had taken place.
• Auditors also uncovered that there were no written contracts or project plans for $1.5 million of the nearly $1.7 million spent on construction work during the audit period. Because there were no contracts or plans, there is no way to determine if taxpayer dollars were spent, appropriately.

• Auditors found a lack of financial controls over New Beginnings’ handling of tens of thousands of dollars in cash received from families for school lunches, afterschool programs, and general fundraising. The audit found that $8,200 in cash collected during FY 2014 was not deposited into the school’s bank accounts and there was no evidence this money was then spent appropriately.

• New Beginnings was required to have $70,000 in an escrow account to pay for legal and audit expenses in case the school was forced to dissolve. At the end of FY 2013, however, the school only had $2,529 in the account and for nearly three quarters of that year, the account balance fell below the required $70,000 minimum.

School administration made payment requests in multiple small increments in an apparent attempt to skirt oversight requirements

To ensure that spending on large purchases is appropriate, New Beginning’s policies require checks for $5,000 or more to be signed by two school officials. Because of this requirement, auditors examined checks for amounts just below and above $5,000 to see if school officials complied with this financial control.

Auditors identified nearly $60,000 worth of checks – for amounts ranging from $4999.00 to $4,999.99 – which were made out to Antares, LLC, a firm used to pay the school’s former executive director. These twelve checks were signed only by the Vice Chair of the Board, who still holds that position. When questioned by auditors, the Vice Chair admitted the payments should not have been handled this way, but claimed it never occurred to her that the checks were intentionally designed to bypass greater oversight.

Auditors also reviewed a sample of 77 payments of more than $5,000 – which must be approved by two school officials. Of these payments, auditors identified $215,771 in spending – 13% of the sample total – which only had one signature, in direct violation of the school’s rules.

When auditors looked at a larger sample of 192 payments worth $2.2 million – including the 77 for more than $5,000 and 115 for less than that amount – they identified eight transactions, which constituted 12% of the total sample spending, that lacked supporting documentation. 

The Board of Trustees did not submit financial disclosure forms or remove board members who violated policies 

Despite clear language in the school’s charter stating that failure to submit financial disclosure forms is grounds for removal, 6 of 8 board members did not submit the required Financial Disclosure Reports by the deadline for FY 2013 and 3 of 8 were missing for FY 2014. Although the school’s charter states that a Board member should be removed if they fail to submit a disclosure report, no actions were taken – putting the school at risk of having its Charter revoked or terminated.

Auditors recommended that New Beginnings’ Board: 

• Ensure all contracts are approved, signed and dated by the Head of School. Further, all such contracts should be approved by the Board and evidence of such approval should be maintained;

• Make certain that it has proper estimates, plans and costs for any alterations done on premises;

• Implement adequate cash controls and financial management for school-related activities; and

• Maintain the minimum required balance of no less than $70,000 in its escrow account in accordance with its charter agreement.

Major findings at Merrick Academy include: 

Merrick Academy substantially altered the terms of a million-dollar contract for management and educational services without putting those changes in writing or documenting what services the payments they did make were for.  As a result, it is impossible to determine if funds paid went toward work that was actually performed.

In 2010, Merrick Academy entered into a five-year contract with Victory Schools, Inc. to provide management and educational services, create student assessments, and manage administrative and financial operations. Originally, Victory was supposed to be paid $1.3 million per year, but was paid only $600,000 in FY2013 and $624,000 in FY 2014, based on a “verbal agreement,” which both the school and contractor claimed reduced the scope of Victory’s involvement.

The changes to the original contract were neither documented by Victory nor approved by the SUNY Institute, as required by the school’s charter agreement. As a result, there is no way for auditors or the public to know what services Victory was paid millions of taxpayer dollars to perform, or if they were received.

Merrick’s Board of Trustees failed to oversee financial decisions or approve $4.5 million in costs associated with the school’s move to a new location, neglecting its duty to manage the school’s finances

• There was no evidence that the Merrick board formally considered and approved relocation and renovation plans that moved the school from its previous location in Queens Village to a new site in Springfield Gardens, Queens. This means that there is no public document explaining why the school chose to spend millions of taxpayer dollars on the move.

• Despite spending over $431,000 in renovation expenses at the new location, $534,000 in costs to break the old location’s lease, $81,000 in moving expenses and incurring $3.5 million in additional rental expenses at the new site, board minutes show almost no discussion of the financial implications of moving and no evidence a vote was ever taken to approve the move. 

School officials consistently failed to follow operating procedures, increasing the possibility the school overpaid for goods and services 

• Auditors found no evidence of contracts, purchase orders, or work orders for 16 of the 54 vendors that received $10,000 or more in payments from the school.

• These 16 vendors received $907,198, or 38% of the total $2.4 million paid to the vendors.

• One contractor, Everlast Solutions Corp., was paid $302,000 to work on renovations at the school’s new location, but auditors were unable obtain a copy of the contract from the school.

• Of 119 payments totaling $1,437,541 which auditors reviewed, 13 payments worth $311,338 – 22% of the sample total – weren’t authorized by the appropriate staff member, increasing the risk that inappropriate payments were made.

Merrick Academy could not show that it consistently performed required criminal background checks for all employees, increasing the risk that inappropriate individuals could have had contact with school children

• Auditors examined a sample of 29 employees and determined that Merrick did not have evidence that background checks took place prior to their start date for 23 (79%) of them.

• Five of those employees worked for the school without proper clearance for between six months and four and a half years.

Auditors recommended that Merrick’s board:

• Ensure that any changes to its agreement to provide management and educational services are formalized in writing and approved by the SUNY Institute;

• Take steps to ensure that all contracts, purchase orders, or work orders are approved and documented;

• Review, consider, and vote on all significant financial matters and keep proper minutes; and

• Ensure that criminal background checks are obtained for employees before allowing them to work at the school.

“If you’re going to spend taxpayer dollars, you better be able to show what you paid for. When public money is spent without accountability, it raises serious questions about whether our children are getting the services they need to succeed. We can’t compromise on the education of our kids. These boards need to make immediate changes and ensure not another penny is spent without oversight and accountability,” Stringer said.

To read the full audit of the Bedford Stuyvesant New Beginnings Charter School, please click here.

To read the full audit of Merrick Academy Queens Public Charter School, please click here.

BRONX UNEMPLOYMENT DROPS TO 6.1%

  The Bronx’s unemployment rate has fallen to one of its lowest numbers ever, according to newly released statistics from the New York State Department of Labor.

The unemployment rate in The Bronx dropped to 6.1 percent in May 2016, down from 6.6 percent in April 2016 and 7.8 percent in May 2015. This is the lowest unemployment rate the borough has seen since Bronx Borough President Ruben Diaz Jr. first took office in May 2009, topping last month’s previous all-time low.

The total number of Bronxites employed also remains high, 567,500, with nearly 100,000 more Bronx residents employed today than when Borough President Diaz took office seven years ago. In addition, just 37,000 Bronx residents are currently unemployed, the lowest number of Borough President Diaz’s tenure.

“We are always looking to continue to build on the results that have helped decrease unemployment in our borough to record lows,” said Bronx Borough President Ruben Diaz Jr. “We will refuse to stay complacent as we seek to lower the unemployment rate even further, create new jobs, strengthen our existing businesses and grow our local economy. I want to thank all of our elected officials, community boards, business community, non-profits, neighborhood leaders and our more than 1.4 million residents. Everyone can be proud of these efforts.”

The Department of Labor’s statistics can be found at http://labor.ny.gov/stats/pressreleases/prlaus.shtm.

Since Borough President Diaz took office in 2009, The Bronx has seen more than $9.4 billion in total development, which has led to the creation of thousands of new jobs. In addition, a partnership announced by Governor Andrew Cuomo announced in August 2014 between the New York State Department of Labor and the Bronx Overall Economic Development Corporation, as part of the “NY Works,” program is placing Bronx residents in these jobs, helping to ensure that new development here benefits everyone, especially Bronxites.

Espaillat Unveils Plan to Strengthen Local Schools

  Today, State Senator Adriano Espaillat unveiled a new policy paper, putting forward his priorities for federal investment in local schools. Senator Espaillat has already released policy proposals outlining his ideas to prevent displacement in gentrifying neighborhoods, address the epidemic of gun violence, and reduce the exploding costs of child care.

 

Senator Espaillat has led the race in putting forward specific policy ideas to address the biggest issues of the day. No other campaign in the race has put forward detailed policy papers to solve problems impacting residents in the 13th District.

 

Espaillat’s latest policy paper, Opportunity for All: Tapping the Potential of Every Child, lays out his vision for supporting education at the federal level, which includes an expansion of foreign language learning, access to AP and technology courses, and support for afterschool programs. 

 

In the Legislature, Espaillat spearheaded the Ladder program, which allocated funding for school construction to the tune of $300 million dollars, creating 16 new schools in the 13th District, and helped fight overcrowding in our classrooms. Espaillat also filed an Amicus Brief on behalf of the Campaign for Fiscal Equity and has been an outspoken voice for New York City schools to receive full and fair funding. Espaillat was a vocal supporter of universal pre-k when it was debated and ultimately enacted in 2014. The program now serves almost 70,000 New York City children. 

 

“To build a strong foundation for our future, we need a quality public education system that taps the potential of every child,” said Senator Adriano Espaillat. “Every parent who wants to send their child to a dual language program should have that option, every student who is capable should be able to enroll in AP courses, and to prepare all of our children for the jobs of the future, they need to receive a dedicated national curriculum on technology. To do this, not only is more investment required but bolder thinking. In Congress, I will provide that leadership to expand access to opportunity to every child.”

 

In Congress, Senator Espaillat will fight for a series of reforms to help local schools.

• Increase federal funding for innovative dual language programs, and support initiatives like the Bilingual Family Literacy Breakfast Program: Our world is more interconnected than ever before, and this trend will only continue. Teaching our young students another language at an early age will catalyze cognitive development and promote academic achievement. But today, most public school students in New York City receive no foreign language instruction until high school, when it becomes exponentially more difficult to develop language proficiency. Congress must make bold investments toward a multilingual future and create a language learning system for the 21st Century that serves our children from an early age.
• National Curriculum on Technology: A fully implemented national curriculum on technology would help harness the full potential of the digital revolution. In order to prepare our children for the jobs of the future, they need to receive instruction in coding, robotics, virtualization, and all science applications.
• Expand AP courses through the federal Advanced Placement Incentive Program grant: This grant increases the participation of low-income students in pre-AP and AP courses and tests. Grants can be awarded to local school districts or to nonprofit organizations in the community to make AP courses more accessible, particularly to students of color. In order to unleash the full academic talent of our young students, they must have the opportunity to showcase their skills.
• Title I Schools: Title I schools should be allowed to extend after school programs to 6pm and provide our students with additional opportunities and resources to succeed.

EDITOR'S NOTE:

  It does not take an election for congress for a State Senator to say what he will do to improve a lacking educational system. Why has this not been already proposed by this State Senator in Albany? 

Yes I know it is federal monies, but it could have been applied for all these years, and Senator Espaillat ran two times before for this congressional seat. Why all of a sudden in this election does he say it? 

Where was he the two previous elections - SILENT?