AG James reveals arrests and indictments of 9 individuals charged with defrauding Medicaid

 July 10, 2024

New York Attorney General Letitia James recently launched a crackdown on a particular form of Medicaid fraud that had fleeced taxpayers for several million dollars over the past few years.

Over one week in late June and early July, AG James announced the indictments and arrests of nine individuals who stand accused of using medical transport companies in New York to defraud Medicaid with false claims for reimbursement, the Times Union reported.

The charged individuals face a slew of felony counts and, if convicted, some could face as much as 25 years in prison.

Defrauding Medicaid with false bills for reimbursement

On July 3, AG James announced the arrests and indictments of Daler and Damir Yuldashev along with Nigina Iskandarova, who operated a medical transport company in Orange County known as DYD Universe, Inc., for allegedly stealing more than $2.3 million from Medicaid.

The alleged scheme, which ran from April 2018 through March 2023, involved overcharging Medicaid by submitting bills for fake trips or by adding fake toll charges that were never incurred. They are also alleged to have recruited Medicaid recipients into the scheme by paying them kickbacks of as much as $1,000 for rides that would then be reimbursed for tens of thousands of dollars.

The Yuldashevs face up to 25 years in prison for multiple felony counts that include First Degree Grand Larceny, Second Degree Health Care Fraud, Medical Assistance Provider Prohibited Practices, and First Degree Offering a False Instrument for Filing. Iskandarova, for her part in recruiting riders with kickbacks, faces up to four years in prison for the Medical Assistance Provider Prohibited Practices charges.

"Medical transportation providers are an essential service for New Yorkers who lack the resources to travel to receive care," James said. "These individuals abused our health care system and stole millions of taxpayer dollars meant to provide care for New Yorkers in need. Taking advantage of Medicaid recipients is reprehensible, and my office will always ensure those who attempt to illegally profit from health care fraud face justice."

Paying cash to riders as kickbacks

That same day, AG James also revealed the arrest and indictment of David Moore of Tompkins County, who engaged in a similar fraudulent scheme with his medical transport company known as ASAP 2, and is accused of stealing more than $1 million from Medicaid.

Between January 2019 and August 2023, Moore submitted false claims for reimbursement for fictitious trips, overinflated the mileage of real trips, and billed for multiple passengers as if they'd received separate rides. He also paid kickbacks to riders by giving them cash off-the-books through services like Cash App and Venmo.

Moore faces up to 25 years in prison for felony counts that include First Degree Grand Larceny, Second Degree Health Care Fraud, and Medical Assistance Provider Prohibited Practices.

Alleged money laundering through shell companies to pay kickbacks

Less than a week earlier, in a June 27 press release, AG James also announced the arrests and indictments of five individuals who operated seven medical transport companies in two counties and are accused of defrauding New York's Medicaid program out of a combined $4.4 million dollars.

In Orange County, Muhammad Rizwan Khan, Muhammad Usman Khan, and Farhan Khan operated four companies from September 2019 to October 2023 and overcharged Medicaid by more than $3.8 million with submitted bills for false trips and fake toll charges, and are also accused of paying kickbacks to recipients for the fraudulent rides.

Likewise, in Rensselaer County, John Gouzos and Richard Sehl operated three medical transport companies between December 2021 and March 2023 and stole more than $650,000 from Medicaid by way of overinflating the mileage of rides as well as paying kickbacks to riders, some of whom were recruited and paid to participate in the scheme on a weekly basis.

On top of the First Degree Grand Larceny and Second Degree Health Care Fraud charges, for which both sets of defendants face up to 25 years in prison, both sets of defendants are also charged with Money Laundering for setting up fake shell companies to funnel their illicit proceeds through to receive cash that was used to pay the kickbacks.

"Using vulnerable patients to personally profit at the expense of New York taxpayers is reprehensible," AG James said at the time. "New Yorkers should be able to trust that all levels of the medical system -- from doctors and hospitals to the companies driving them to their appointments -- are acting honestly. The illegal schemes these defendants engaged in not only exploited New Yorkers seeking care, but also undermined honest health care providers. My office will continue to root out fraud and abuse in our health care system to protect New Yorkers."

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