Attorney General James Announces Indictment of Long Island Physician for Defrauding Medicaid and Subjecting Patients to Invasive and Medically Unnecessary Testing

 

Payam Toobian, M.D., Allegedly Paid Kickbacks to Physicians for Patient Referrals and Subjected Medicaid Patients to Unnecessary Radiological Tests 

New York Attorney General Letitia James today announced the indictment of Payam Toobian, M.D., 52, of Kings Point, New York, and his company, America’s Imaging Center, Inc. (America’s Imaging), for defrauding Medicaid by forcing patients to get unnecessary and invasive medical tests. For years, Toobian allegedly ran a kickback scheme where he bribed other physicians for patient referrals, subjected some of those patients to tests and procedures that they did not need, and then caused false claims to be submitted to Medicaid for those tests. Toobian, through his corporation America’s Imaging, operated Empire Imaging, a diagnostic radiology center in Forest Hills, Queens. Toobian was charged with Grand Larceny in the Third Degree, Health Care Fraud in the Third Degree, eight counts of Falsifying Business Records in the First Degree, and three counts of violating the Social Services Law statute prohibiting the payment of kickbacks related to the provision of services under the state’s Medicaid program, all felony charges. 

“New Yorkers should be able to trust that their doctors are working to heal them, not profit off of their suffering,” said Attorney General James. “Bribery and kickback schemes corrupt our healthcare system and make it impossible for patients to receive the care that they need. The idea that a licensed physician would subject patients to unnecessary testing to line their pockets is unconscionable, and my office will continue to go after medical providers that jeopardize the health and safety of New Yorkers.” 

From January 2006 to August 2017, Toobian allegedly gave gift cards, cash, and checks totaling more than $547,000 to three physicians in exchange for the physicians’ referral of patients (including Medicaid beneficiaries) to Empire Imaging. Empire Imaging received more than $1 million in paid claims relating to patient referrals from those physicians. In addition to this kickback scheme, from January 2014 to August 2017, Toobian allegedly directed his employees at Empire Imaging to add additional, unordered radiological procedures to orders submitted by referring physicians to increase the amount of money Empire Imaging would receive from Medicaid. 

Toobian allegedly defrauded Medicaid, and subjected patients to medically unnecessary and often invasive radiological testing without the direction, consent, or approval of the referring physicians responsible for the underlying care of those patients. The additional, unnecessary tests included MRIs of the brain, cervical spine, and lumbar spine, all “with contrast,” which required subjecting patients to unnecessary and invasive injections. Toobian then directed his staff to submit claims for payment to Medicaid for those medically unnecessary tests.  

The Office of the Attorney General (OAG) is also, in a separate civil lawsuit filed in the United States District Court for the Eastern District of New York, seeking damages from Toobian and America’s Imaging, among other defendants, for violating the Federal and New York State False Claims Act and for other civil causes of action. 

The OAG would like to thank the U.S. Department of Health and Human Services, Office of the Inspector General, New York State Department of Health, and Medicaid MCOs, HealthFirst, MetroPlusHealth, and United Healthcare, for their cooperation and valuable assistance throughout the investigation. 

MFCU’s investigation was led by Detectives Thomas Bolen, Robert Hatt, Dawn Scandaliato, and Michael McNally, with the assistance of Supervising Detective Ronald Lynch, Deputy Chief Kenneth Morgan, and Deputy Chief William Falk. The underlying financial analysis was completed by Senior Auditor-Investigator Deowattie Persaud and Auditor-Investigator Khristian Diaz, with assistance from Regional Chief Auditor Stacey Millis. 

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

New York MFCU’s total funding for federal fiscal year (FY) 2022 is $59,918,216. Of that total, 75 percent, or $44,938,664, is awarded under a grant from the U.S. Department of Health and Human Services. The remaining 25 percent, totaling $14,979,552 for FY 2022, is funded by New York state.   

Reporting Medicaid Provider Fraud: MFCU defends the public by addressing Medicaid provider fraud and protecting 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 or call the MFCU hotline at (800) 771-7755. If the situation is an emergency, please call 911.  

NYS Office of the Comptroller DiNapoli: State Pension Fund Posts 9.5% Annual Investment Return

 

New York State Comptroller Thomas P. DiNapoli today announced that the New York State Common Retirement Fund’s (Fund) investment return was 9.51% for the state fiscal year that ended March 31, 2022. The return on investments increased the Fund’s value to $272.1 billion. “There has been tremendous volatility in the markets in recent months, but thanks to the state pension fund’s diverse investments, it finished the year above our assumed rate of return,” DiNapoli said. “Still, the turmoil in the markets since Russia’s invasion of Ukraine has sent shockwaves through the financial world with repercussions that are ongoing. With inflation and supply chain issues continuing to impact the economy, we expect a challenging investment environment for the foreseeable future.” The Fund's value reflects retirement and death benefits of $14.7 billion paid out during the fiscal year. Employer contribution rates are determined  by investment results over a multi-year period along with numerous other actuarial assumptions, including wage growth, inflation, age of retirement and mortality. Integral to the Fund’s strength have been the state and local governments, which consistently pay their contributions. As of March 31, 2022, the Fund had 49.70% of its assets invested in publicly traded equities. The remaining Fund assets by allocation are invested in cash, bonds, and mortgages (21.18%), private equity (13.64%), real estate and real assets (10.00%) and credit, absolute return strategies and opportunistic alternatives (5.48%). The Fund’s long-term expected rate of return is 5.9%. The timing of Fund’s annual valuation date is tied to the state fiscal year. Every three years the Fund is required to undergo an independent Fiduciary and Conflict of Interest Review. The review, most recently performed by Kroll LLC, found the Fund “continues to be a leader amongst its peers for management and operational transparency.”   Links Fund’s historic value and rate of return in prior years Third quarter results Return for 2021 Independent Fiduciary and Conflict of Interest Review

Governor Hochul Announces $682 Million in Financing for Affordable Housing

 Funding will Create or Preserve 1,600 Sustainable, Affordable, Supportive Homes Across New York State

 Governor Kathy Hochul today announced $682 million in bonds and subsidies have been awarded to create or preserve more than 1,600 affordable, sustainable, and supportive homes across the state. The developments will leverage an additional $218 million in private funding to create an overall investment of nearly $901 million to further local economic development efforts, reduce homelessness, and advance New York's commitment to expanding safe, secure and healthy housing opportunities for individuals and families.

"We are working tirelessly to expand much-needed affordable housing across New York State, and these new developments will help us build toward a more stable and equitable future for the next generation," Governor Hochul said. "When we invest in modern and healthy housing, we strengthen our communities and provide new opportunities for New Yorkers to thrive and succeed, and today is a significant step in helping secure and preserve safe, livable, and quality affordable housing for all New Yorkers."

The awards are part of Governor Hochul's sweeping plans to make housing more affordable, equitable, and stable. The Governor has introduced and successfully secured, in the 2022-23 State Budget, a new $25 billion, five-year, comprehensive housing plan that will increase housing supply by creating or preserving 100,000 affordable homes across New York including 10,000 with support services for vulnerable populations, plus the electrification of an additional 50,000 homes.

The financing is made possible through New York State Homes and Community Renewal's June 2022 bond issuance which provided $463 million in taxable and tax-exempt housing bonds and $219 million in subsidy, including $5 million in financing though the Clean Energy Initiative pilot program

Awards include:

Capital Region

$21 million for Yates Village Phase II, Parcel 3 in the city of Schenectady's Goose Hill neighborhood. The project will demolish and replace six existing public housing rental buildings along Van Vranken Avenue originally constructed in 1948. Once all phases of the project are complete, the 37 new two-story buildings will offer 211 affordable homes, including 43 apartments reserved for individuals with physical disabilities. These residents will have access to onsite services provided by the Schenectady Community Action Program. Phase I of the Yates Village redevelopment, also financed by HCR, was completed in 2021 and rebranded as Northside Village. The development team for Phase II consists of Pennrose Holdings, Duvernay + Brooks, LLC, and the Schenectady Municipal Housing Authority.

$50.7 million for The Lion Factory in the city of Troy. The historic industrial building will be adapted into 151 affordable apartments and nearly 9,000 square feet of ground floor commercial space. Occupying an entire city block, the six-story building is on the National Register of Historic Places. The building's historically and architecturally significant design elements will remain intact, while also incorporating new energy efficiency measures including all-electric heating and cooling systems. Twenty-five homes will be reserved for homeless families in need of supportive services provided by the Unity House of Troy and funded through the Empire State Supportive Housing Initiative. The developer is Regan Development Corporation.

Finger Lakes

$70 million for Tailor Square in the city of Rochester. The project will convert the historic four-story manufacturing building home to Hickey Freeman into 134 affordable apartments, including 45 homes for seniors in need of supportive services funded through the Empire State Supportive Housing Initiative. Originally constructed in 1910, the building will undergo a gut renovation that will preserve the historic architecture and retain approximately 77,000 square feet of manufacturing space and an outlet store for continued use by Hickey Freeman. The energy-efficient design will incorporate geothermal and photovoltaic solar technology to manage the heating and cooling systems. The developer is Home Leasing.

$46 million for Canal Street Apartments in the city of Rochester. The project will convert a vacant factory and warehouse known as the Utz and Dunn Shoe Company Building into 123 affordable apartments. Located in the Susan B. Anthony historic neighborhood, the century-old building's original architectural details and industrial character will be carefully preserved. Seventy apartments will be reserved for adults experiencing homelessness who will have access to on-site supportive services funded through the Empire State Supportive Housing Initiative and administered by the New York State Off. The developer and service provider is East House.

Mid-Hudson

$80 million for West View Apartments in the city of New Rochelle. The 24-story building at 26 Garden Street in the city's historic downtown will offer 186 affordable apartments and residential parking. The development is the result of New Rochelle's transit-oriented rezoning designed to make downtown more economically vibrant and pedestrian friendly. The developer is MJ Garden Affordable Developer, a joint venture between Mark Stagg and Joseph Simone.

$32 million for the La Mora Senior Apartments in the city of Yonkers' Hollow neighborhood located southwest of the Central Business District. When complete, the newly constructed building will feature 60 apartments for seniors aged 62 and older who will each receive Section 8 Project-Based Voucher Housing Assistance administered by the Municipal Housing Authority of the city of Yonkers. The development incorporates sustainable design elements and is expected to achieve Passive House certification. The developer is The Mulford Corporation.

New York City

$65 million for Logan Fountain in the Cyprus Hills neighborhood of Brooklyn. The 13-story U-shaped building will offer 174 affordable apartments, including 105 with supportive services. The building's east wing will contain a separately owned and financed transitional housing facility for families being served by the NYC Department of Homeless Services. The building will also include a nearly 10,000-square-foot residential courtyard and 7,600 square feet of ground floor retail space along Atlantic Avenue. The development team is a joint venture between The Hudson Companies and DCV Holdings, Inc.

$104 million for Phase 1B of the redevelopment of the Brooklyn Developmental Center. The redevelopment of this 35-acre property in East New York is part of the Vital Brooklyn Initiative, a comprehensive community development initiative that is addressing chronic social, economic, and health disparities in Central Brooklyn. The six-phase redevelopment is expected to ultimately create 2,400 affordable homes with other mixed-uses on a campus with walkways, streets, and open space. Phase 1B consists of a six-story building with 124 apartments designed to be all-electric and achieve Passive House standards. The development team is Apex Building Company, Inc., and L+M Development Partners, LLC.

$123 million for Starhill Phase I in the Morris Heights section of the Bronx. The newly constructed development will offer 326 apartments, including 200 with supportive services funded through the Empire State Supportive Housing Initiative and administered by the New York State Office of Addiction Services and Supports. Residents will benefit from free internet access in each unit, and several building-wide amenities. The developers are Bronx Pro and Services for the Underserved.

Southern Tier

$58 million for the rehabilitation of three public housing developments operated by the Ithaca Housing Authority to create 118 modern and affordable homes in the city of Ithaca. Overlook Terrace and Southview Gardens will undergo extensive upgrades while Northside Apartments will be demolished and replaced with 82 townhouse-style apartments and two new playgrounds. The new construction of Northside Apartments is designed to meet HCR's Stretch Sustainability Standards for energy efficiency and was awarded additional subsidy through the Clean Energy Initiative. The development team consists of the Ithaca Housing Authority and 3D Development Group LLC.

Western New York

$31 million for Whitney Apartments in Buffalo's West Village Historic District. Ten historic multifamily buildings with 135 apartments will undergo substantial repairs and improvements designed to enhance quality of life, improve safety, and reduce energy consumption. Twenty-one homes will be reserved for veterans experiencing homelessness who will have access to supportive services from Soldier On. All 135 apartments will be covered under a Project-Based Section 8 Housing Assistance Payment contract administered by the federal Department of Housing and Urban Development. The developer is Winn Companies.

MAYOR ADAMS ANNOUNCES EMERGENCY PROCUREMENT DECLARATION TO RAPIDLY PROCURE SHELTER, SERVICES FOR ASYLUM SEEKERS

 

Emergency Procurement Declaration Will Allow City to Rapidly Contract With Shelter and Service Providers  

City in Discussions With Federal Government to Seek Reimbursements for Emergency Costs 

 New York City Mayor Eric Adams today announced an emergency procurement declaration to rapidly procure shelter and other services for people seeking asylum in New York City. 

  

“New York is a city of immigrants, and we will always welcome newcomers with open arms. Over the past two months, we have seen a significant increase in the number of asylum seekers arriving in our city’s shelter system,” said Mayor Adams. “To fulfill our city’s legal and moral mandate to provide quality shelter to anyone experiencing homelessness, and to ensure we are providing appropriate services to asylum seekers, we are immediately issuing an emergency procurement declaration to rapidly procure additional shelter and services to serve these individuals and families. We are working across city agencies and with not-for-profit partners to ensure these individuals have access to a range of services, including legal support, health care, and education. We can no longer wait — and this declaration will allow the city to procure sorely needed additional resources as quickly as possible. We are deeply committed to providing shelter and support to everyone who needs it, and we cannot do this work alone. We will continue to work with federal and state partners to procure additional financial resources immediately.”  

 

“New York’s commitment to providing shelter is an essential part of what makes our city a welcoming safe haven," said New York City Comptroller Brad Lander. "We will work closely with the administration to appropriately expedite contracts and ensure New York City can deliver the shelter and services that families seeking asylum here urgently need.” 

  

Approximately 4,000 asylum seekers have entered the New York City shelter system since late May — the primary driver of the approximately 10 percent increase in the New York City Department of Homeless Services’ census. Additionally, on average, the city’s shelter system is currently receiving over 100 additional asylum seekers looking for some form of housing per day. To protect individuals from federal detainment or deportation, and because the city provides shelter to all who need it — regardless of immigration status — the city does not track individuals’ immigration status on intake forms. Accordingly, this is a conservative estimate based on comprehensive interviews of people entering the city shelter system. An influx of approximately 4,000 individuals requires a significant number of new shelter sites to ensure appropriate capacity. 

 

"Boiler Room" Operator Pleads Guilty to International Securities Fraud Conspiracy

 

Defendant and Co-Conspirators Manipulated the Price and Trading Volume of a Publicly Traded Stock in the United States

 Earlier today, in federal court in Brooklyn, Lee Cohen, a citizen of the United Kingdom, pleaded guilty to conspiracy to commit securities fraud for his role in a scheme to manipulate the price and trading volume of HD View, 360, Inc. (HDVW), a publicly traded company that purported to distribute and install security surveillance systems.  In connection with his plea, Cohen also admitted that he agreed to launder money that was purported to be the proceeds of similar securities fraud schemes.  The proceeding was held before United States District Judge Kiyo A. Matsumoto.  When sentenced, Cohen faces up to five years in prison.

Breon Peace, United States Attorney for the Eastern District of New York, and Michael J. Driscoll, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the guilty plea.

“Cohen ran his scam from a ‘boiler room’ more than 8,000 miles from the federal courtroom in Brooklyn where he pleaded guilty today to defrauding investors, proving that distance will never protect criminals from the reach of our Office’s outstanding attorneys and FBI Special Agents who brought the defendant to justice,” stated United States Attorney Peace.

Mr. Peace thanked the United States Securities and Exchange Commission, New York Regional Office and Washington, D.C. Office, for their assistance in the case. 

As set forth in court filings, Cohen operated a self-described “boiler room” in the Philippines.  Cohen and his co-conspirators used the boiler room to defraud investors and potential investors in HDVW by inducing investors to buy HDVW shares at particular prices.  At the same time, Cohen coordinated with a co-conspirator who controlled the majority of HDVW’s shares, then sold the shares for a profit.  During the scheme, over 1,000 investors purchased shares of HDVW and lost more than $1.2 million.   

In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC).  As the leader of the subcommittee, Mr. Peace will play a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including mail and wire fraud, bank fraud, health care fraud, tax fraud, securities and commodities fraud, and identity theft. 

Comptroller’s Fiscal Year-End Analysis Shows City Has Funds to Fully Reverse Cuts to School Budgets and Increase Deposits to Rainy Day Fund

 

Comptroller’s office identifies $800 million in FY22 year-end excess revenues that could be deposited into long-term savings to prepare for economic downturn.

Updated forecast for DOE federal Covid stimulus rollover shows more than enough to cover the $469 million reduction in school budgets.

  New York City Comptroller Brad Lander announced today that his office’s FY22 year-end fiscal review continues to identify sufficient resources to fully cover school budget cuts, while also substantially increasing the City’s Rainy Day Fund to prepare for the possibility of an economic downturn.

“Preparing for the future means both fully funding our schools to help our kids recover from the pandemic and getting our fiscal house in order for the possibility of a recession,” said Comptroller Lander. “Our year-end analysis shows we can do both. There’s no fiscal need to shortchange our kids.”

The Comptroller’s office review found that the City will end the year with $800 million in tax revenues above what was included in financial plan at the time the City’s budget was adopted. These additional revenues were not projected in either the FY22 or FY23 budgets.

Comptroller Lander urges that these excess revenues be placed in the City’s Rainy Day Fund, to prepare to soften the blow of a possible economic downturn. The Mayor and the City Council made significant FY22 deposits of $2.2 billion into the City’s long-term reserves (the Rainy Day Fund, aka the Revenue Stabilization Fund, plus the Retiree Health Benefits Trust fund). This brings the City’s long-term reserves to $6.55 billion, or 9.4% of tax revenues, still well below the 16 percent that the Comptroller’s office projects would be needed to weather the full length of a recession. An additional $800 million would put the City’s long-term reserves above $7 billion for the first time ever. The Comptroller also called for the City to adopt a formal policy for deposits, fund target, and withdrawals.

At the same time, the Comptroller’s office updated its estimate of Federal Covid stimulus dollars allocated to the New York City Department of Education (DOE). As of June 2022, the DOE has spent $2.33 billion of the $3.02 billion in stimulus dollars budgeted. While the DOE can continue to expend through September, the Comptroller’s office estimates that $505.6 million remains yet uncommitted, enough to fully cover the $469 million Fair Student Funding cut from school budgets for FY23. (DOE claims that the amount being cut from individual schools is $215 million, but the Comptroller’s analysis of the actual school budgets shows the gap facing principals is more than double that figure). In total, the City currently has $4.4 billion remaining in federal Covid stimulus aid for education that must be spent by FY25.

INVESTOR ALERT: Attorney General James Urges New Yorkers Deceived by Crypto Platforms to Report Concerns to OAG

 

AG James Encourages Workers in the Crypto Industry Who May Have Witnessed Misconduct to File a Whistleblower Complaint

  New York Attorney General Letitia James today issued an investor alert urging any New Yorker deceived or affected by the cryptocurrency crash to contact her office. Many high-profile cryptocurrency businesses have frozen customer withdrawals, announced mass layoffs, or filed for bankruptcy, while investors have been left in financial ruin. As part of the Office of the Attorney General’s (OAG) ongoing investigative work, OAG is interested in hearing from New York investors who have been locked out of their accounts, who are unable to access their investments, or who have been deceived about their cryptocurrency investments. New Yorkers who have been affected by this conduct are strongly encouraged to report these issues to OAG. Attorney General James also encourages workers in the cryptocurrency industry who may have witnessed misconduct or fraud to file a whistleblower complaint with her office, which can be done anonymously.

“The recent turbulence and significant losses in the cryptocurrency market are concerning,” said Attorney General James. “Investors were promised large returns on cryptocurrencies, but instead lost their hard-earned money. I urge any New Yorker who believes they were deceived by crypto platforms to contact my office, and I encourage workers in crypto companies who may have witnessed misconduct to file a whistleblower complaint.”

In the last few months, investors have lost hundreds of billions of dollars in cryptocurrency markets. New Yorkers who have been affected by the dramatic devaluations of the Terra and Luna virtual currencies and the account freezes on cryptocurrency staking or earning programs, such as Anchor, Celsius, Voyager, and Stablegains, are strongly encouraged to contact OAG’s Investor Protection Bureau. In addition, any New Yorker who believes they are a victim of fraudulent or deceptive conduct should also share their experiences with OAG.

If you are worried that you or someone you know has been a victim of investment fraud, contact OAG’s Investor Protection Bureau online or email investor.complaints@ag.ny.gov. If you have worked in the crypto industry and believe you may have knowledge of wrongdoing, contact OAG’s Investor Protection Bureau, email investor.complaints@ag.ny.gov, or file a complaint using the online whistleblower portal. 

MAYOR ADAMS DECLARES MONKEYPOX STATE OF EMERGENCY IN NEW YORK CITY

 

New York City Mayor Eric Adams today issued an emergency executive order declaring a local state of emergency due to the monkeypox outbreak and released the following statement: 

 

“As the monkeypox outbreak continues to grow in New York City and across the country, I am today issuing an emergency executive order declaring a local state of emergency. New York City now has over 1,200 reported cases, approximately 25 percent of cases nationally, and we are continuing to see the numbers rise. This order will bolster our existing efforts to educate, vaccinate, test, and treat as many New Yorkers as possible and ensure a whole-of-government response to this outbreak. In partnership with federal, state, and local officials we will continue to respond with the urgency required to keep people safe and this order is another tool to help us do so.” 

 

As the governor has declared a state of emergency in New York, this emergency executive order allows the mayor to suspend local laws, and enact rules, as necessary, to protect the well-being and health of all New Yorkers. The separate public health declaration of emergency issued on Saturday by the New York City Department of Health and Mental Hygiene (DOHMH) allows DOHMH Commissioner Dr. Ashwin Vasan to issue commissioner’s orders amending provisions of the New York City Health Code to protect public health and slow the spread.