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Feds Probing Medicaid Fraud at SUNY Research Foundation

June 11, 2011

A federal criminal investigation into systemic fraud related to audits of New York’s Medicaid program is targeting numerous supervisors and employees at the state Health Department and the Research Foundation for the State University of New York.

Interviews with people familiar with the matter and documents obtained by the Times Union show that in recent weeks at least seven employees with those agencies received letters from federal prosecutors in Albany notifying them they are targets in the investigation. The letters say evidence is being prepared for presentation to a federal grand jury for indictment in a case involving fraud, health care fraud, falsification of records and conspiracy.

The targeted employees were encouraged to contact prosecutors to discuss a pre-indictment settlement, and to consult attorneys if necessary. The letters were sent by assistant U.S. Attorney Sara Lord, who specializes in white-collar crime cases.

Federal investigators with the U.S. Department of Health and Human Services are pursuing whether the scandal reaches into the upper levels of management for the SUNY Research Foundation and the state Health Department, according to sources briefed on the case. At stake is more than $22 billion in annual matching federal funds for Medicaid. The allegations are that Research Foundation workers, who were under contract with the state Health Department to audit the program, were pushed to manipulate data related to the percentage of ineligible people receiving benefits.

On Saturday, the Research Foundation issued a written statement that shifted focus to an arm of the Research Foundation in Buffalo. People briefed on the investigation said workers at the foundation’s Albany headquarters are targets of the probe.

People familiar with the case said several Research Foundation workers have alleged they were fired or retaliated against after questioning the practice of altering data or manipulating information such as residency requirements of Medicaid recipients.

One such employee, Ava Dock, filed a civil complaint against the Research Foundation in U.S. District Court alleging that Research Foundation’s ”purpose to underreport New York’s error rate for Medicaid claims was to defraud the federal government … in order to avoid the disallowance of federal matching funds for Medicaid to New York,”

The Research Foundation considers itself a private, not-for-profit agency though its leaders are mostly made up of top SUNY officials. The foundation handles about $1 billion annually in revenues, mostly in research grants from the federal government. Its workers also routinely conduct business on behalf of the state through government contracts, and many of its employees have state government jobs and state e-mail addresses.

This is not the first time NYS and SUNY Research Foundation Have Been Investigated for Fraud

One Comment
  1. Robert Stein permalink

    The TAXPAYERS ARE the Wallets of “OUR” Administrative Fat Cats. OUR NATIONAL DEBT–WHAT THE GOVERNMENT (S.B.A.) and The Research Foundation (CUNY/SUNY) in partnership with the taxpayer’s money do not want you to know—and the solution is awareness. The largest (hopefully not national) Billion dollar scam involving 5 taxpayer funded “economic” campus offices in partnership with our government and dealing with our backbone—the small business owner. Add publicly funded hire education that is going higher, as they need the needed lies, the inflated (overstated) numbers, the unnecessary voucher spending, and false time sheets as the con (strategic summary) played at the expense of the taxpayer. The MQS and F.O.I.L. reports are opening eyes—it all starts with no-show work ethics and the fudged reporting numbers needed for continued funding purposes

    No-One is Helping “Main Street”—funding and need is to help themselves…… POLYGRAPH ANYONE?

    Then and Now covers an abbreviated period of time where a Director was replaced by Politics and what happens to the NOW once politics replaced accountability and integrity—as the real increase of budgets (not the written or talk of decrease)is F.O.I.L. documented and MQS reported–and when former accountability returned “unused” funds earmarked for our Veteran’s that needed to be more “creative” and was never returned (campus/government calls this “diversion”) along with reporting no-shows and false reports for funding purposes on campus with these in- partnership government offices and the retaliation needed by the system.
    Then—as I review the C.S.I. reports…the number one office in the State of New York as to Small Business Economic assistance and Job Development as outlined by FOIL and include … 1) Economic Impact and Stimulus 2) Jobs Created/Jobs Saved and 3) Clients Counseled and Hours that go into Billing… starting after 9/11/2001 and continuing for many years.
    First the Now…Politics from “our” new economic business Director who originally resigned based on the reports and later advised in writing… “As you know, Staten Island is continuing to experience a booming economy”—written for a reason—but look around as to growth–and
    “Since budget limitations preclude additional staff, the CSI—SBDC center…..” is the politics needed at C.S.I. to silence our freedom of speech when reporting taxpayer theft of time, of services and false reports as they then need to “restructure” as their needed lie….in writing to eliminate whistleblowers.
    Then–FOIL DOCUMENTS—Federal FY 2006 Operating Budget–$332,000—staff of 4
    Now–FOIL DOCUMENTS—Federal FY 2009 Operating Budget–$491,000 plus and the many “extra’s) we pay for and now a—staff of 4 and ½. And in 2010—up again—a $200,000 increase in budget staff of 4 and ½, and half the accomplished accountable results the previous award winning team achieved-your policy and politics. Half of what the former team accomplished and we all said no when our integrity, our work ethics and accountability was compromised…but that is not what CUNY and our Government seek—the goal is increased funding and tuition hikes to pay for this.

    Then—the best Director in the State received roughly half of what politics now receives and took an additional $15,000 in “extras”—and with an allowed –life threatening illness took time off…
    NOW that has doubled to over $100,000 and $29,000 in unnecessary “extra’s’” in a short period of time—no wonder he unresigned and thanks to false numbers able to bump it all up and his “ tough economic times in his “restructuring” report” didn’t affect these offices—Gosh bless him and the system that allows. Every person in this former award winning office left saying NO to overstating of numbers and theft of time and as to our Veteran Program, it is NOW an embarrassing con of taxpayer funding. Add pensions and benefits for all—FOREVER….FOREVER – and who pays for this?—US as in US.

    Then—after 9/11/2001 the best in the State assisting the Small Business Community and our Veterans—and fully accountable for their reports and accomplishments… for many years. Then–2005- 2006 Operating results—407 clients, 2114 counseled hours, 287 Jobs Created, 74 Jobs Saved, 11.5 Million in VERIFIED Economic Stimulus, along with a nationally acclaimed Veteran program—with an ill Director and 2 counselors.
    Now—Operating results 2007—240 Clients counseled, 1,889.9 client hours, 142 jobs created, 63 jobs saved and $8,7 million in economic impact, adding counselors—with these numbers in question….based on reports. Any idea of the client cost—well over $2,000.00 per client—that is an awful lot of tuition.
    Then—Our Veteran’s Program—Once the best in the State with an average of 25-35 Veterans enrolled each year and we received roughly $20,000 in additional Veteran Grants and were to return unused funds of $7,000 which have been campus “diverted” and cost our Director his job as politics needed a more creative person—see Albany emails, and CUNY FOIL claiming records do not exist—they do—as the account numbers and emails will verify.
    Now—2009, as reported by Central Information 3 Veterans in the Program and advised $100,000 spent and no funds returned—as per the Research Foundation (CUNY.) 3—FOIL documented.
    Director salary Then—45,000-$50,000—Now—double plus…Fringe Benefits Director then-$15,000 now $29,000—and mind you—with an ill Director we were the best in the State with almost double the now accomplishments and a budget within budget and an eye out to protect the taxpayer.
    Total Office Fringe then–$55,000—now $83,000, and the week- long supposed yearly educational vacation for over 300 at $650.00 a head that could be done for free I house rather than a resort each year….we can add the receipts we have for lunches and vouchers not related to business paid for by checking account number two from this small office and does exist along with the Veteran Outreach Account. Not bad for “budget cutbacks” as outlined in letters and considering S.C.O.R.E. does similar work for FREE and dozens of these offices doing yeoman work in the community all paid for by the taxpayer and 50% not needed—give the funds to the deserving, not the politics due to association.

    Then—Office number 1—Counseling Statistical Summary—10/01/2005—8/29/06—C.S.I. office—Total Clients (not quite the year) 407, Counseling Hours 2,010, over 11,500.00 in verified economic impact. Same dates for Training Statistical—14 events…..Salary well deserved.
    Office number two– Counseling Statistical Summary—10/01/2005—8/29/2006 Business Solutions Center-Totals for 2 supervisor/counselors for the year…Total clients 26, Counseling Hours for two employees—44.5 in total for the year—IN TOTAL FOR THE YEAR which amounts to ¾ of an hour each per week, Impact 000 and the additional Training statistical summary FOIL reports shows—000 accomplishment for the year—two employees—3/4 an hour of work a week FOIL reports not mine—yours Mr. President—get me this job or that part timer at $29,000 that is not necessary—or how about Susan B at $100,000 and a no-show. When we complained as to why this is allowed—see the complaints and campus threats on other campuses when reporting no-shows and inflating numbers– (Bruno, Dock, Fals.).
    Office number 3….repeats the same process—
    Office number 4…same campus another no different than Dock or Fals, or….
    Office number 5—see Corona—Elmhurst and the $500,000 to be spent on “minority services” that lacked minorities and services…..lots of pony and dog at the beginning but when closed like the satellite at SBS….

    50% of these so-called economic offices are political and not needed. One of the mandated for these “offices” was Jobs Created/Jobs Saved”—see ABC news.
    Administration requests employees to overstate numbers for taxpayer funding—and those that say no….Add NO record of mandated training events or programs for the C.S.I. office for the year after 2006—see documents and when questioned as to specific mandated seminars as to location and room—“no training record found”—
    Review and understand MQS 0.4 “I met with client” reports and how thirty minutes is easily billed for 8-20 hours of work—times thousands of offices………….not a word or document yet denied…
    Many of us said no to false reports, wasteful spending, client double billing and no-show allowed work at CUNY/SBDC. They eliminated the then that said NO or we walked out refusing to compromise our integrity–and replaced the team with now YES political associates and Lies. Honesty and integrity—oh some abused time in the past, but it never became theft— and now you have egos, lies and greed that our debt crisis is based on.
    Your reports Government and CUNY/SUNY—time for the long overdue awareness as tuition is about to be hiked 25-40%–ask our Chancellors and their relatives who will benefit from this. We are giving 130 million in additional funding to an organization that made the news as to false Jobs Created/Jobs Saved Reports that made headlines.… The ASBL in recent Supreme Court Victories estimate the “Stimulus Con” not necessarily going to the small business owner– or did we ask the small business owners lately if this is not true and it is estimated cost the country 100 Billion as non- profits grow and capitalism as we know it is struggling as the SBA refuses to open their books to this. Citytime is all the time when it comes to taxpayer funding……….and this is only the beginning of the reports and how far the system needs to go to quiet us…

    Note…this is not F.E.M.A. before Katrina as they since have cleaned up their act (at least what I have seen—but then again I was mandated to put the claim packages together (not the field work under criticism) and I was honored to represent them for an additional 4 year term after 5 with the SBA/CUNY funded SBDC…the division that needs exposure is the S.B.A dealing with our countries backbone, the small business owner “in partnership” with CUNY under the guise of higher (HIRE) education and small business “academia” assistance (look at what is actually accomplished.) The taxpayer cost is estimated to be upwards of 1 Billion a year with 50% of all these organizations not necessary—or dontcha think it is time to give it to the organizations that deserve it, as Staten island has at least seven similar, all basically doing the same work with SCORE FREE—and we do not need the politics of Nepotism, created jobs as favors, or false numbers and billing to justify paychecks and to keep the pyramid of Ponzi numbers going. Time to expose the game played with taxpayers and the country (at least in the five offices I have come to know and privy to the reports.) No more Citytime–anytime for any and all of our taxpayer funded organization(s.) Mr. President and Governor Cuomo– It is time for our government and publicly funded institutions to clean up their acts and let us all get back to honesty and transparency as to work ethics, accomplishment and spending.
    Not a word, document, email, letter, disclosure, FOIL report, and MQS report yet to be denied—even by our A.G. who represents the system—perhaps it is time to bring Marty back?

    Respectfully submitted,

    Robert Stein

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