Nine doctors and 14 others have been arrested in an alleged Medicaid fraud scheme in which residents in low-income neighborhoods and homeless shelters were recruited to take unnecessary medical tests in exchange for free footwear, authorities said Monday.
Eric Vainer, 43, of the Upper West Side, is accused of masterminding the large-scale scheme across the five boroughs, according to Brooklyn District Attorney Ken Thompson.
According to the indictment, between October 2012 and Sept. 30, 2014, the doctors, nurse practitioners, physician's assistants, technicians, office staff, recruiters, managers and billers involved in the operation fraudulently billed Medicaid for more than $6.9 million as part of the operation.
Authorities say recruiters went out to low-income areas and approached people outside of homeless shelters and welfare offices throughout New York City and offered them free sneakers if they could produce a Medicaid card and would agree to have their feet examined at a medical clinic.
If the person agreed, they were taken to one of Vainer's clinics in either Williamsburg or the Bronx, prosecutors said. Once there, a podiatrist would perform a brief exam, then provide the client with footwear and unnecessary medical equipment like an ankle brace or orthotic insole, for which the clinic could bill the insurer.
The clients were also frequently referred for other medically unnecessary tests and procedures like vein tests, pain management evaluations, physical therapy and cardiograms.
Vainer allegedly decided what medical tests, procedures and equipment would be ordered, dispensed and billed, and sometimes how the doctors would be compensated.
Local
Prosecutors say some of the doctors accused in the scheme paid Vainer a kickback and others split with him the money generated from insurance billings.
The investigation began in July 2012 after a Brooklyn resident went to the D.A.'s Action Center and told officials was approached by recruiters and taken to a medical clinic, where she met with a podiatrist and was given a knee brace and sneakers.
When she said she didn't need the knee brace, she was told she had to take it in order to receive the sneakers.
The recruiters operated in the Bronx, Richmond Hill and Jamaica in Queens, Chelsea in Manhattan, and Bushwick, Brownsville and East New York in Brooklyn, among other neighborhoods, authorities say.
Vainer and the other defendants were being arraigned in Brooklyn Supreme Court Tuesday. They face various charges of enterprise corruption, money laundering, scheme to defraud, health care fraud, falsifying business reocrds, grand larceny, conspiracy and petit larceny.
Attorney information for Vainer wasn't immediately clear.
