Operators of a transitional residence in Brooklyn, a so-called three-quarter home, are being charged with medicaid fraud and money laundering for allegedly forcing their tenants to attend drug treatment services and then accepting kickbacks related to the treatment.
Yury and Rimma Baumblit were arrested Wednesday on charges accusing them of engaging in a monthly kickback scheme that netted them more than $600,000 in illegal kickbacks, said state Attorney General Eric Schneiderman, who announced the arrests Thursday.
If convicted on all charges, the Baumblits face up to 15 years in prison.
The Baumblits were the focus of an NBC 4 New York I-Team investigation in 2013 that explored allegations that they were sending clients to unnecessary and sometimes unproductive counseling sessions and inflating Medicaid bills for the treatment.
The charges against the Baumblits allege that they received the kickbacks through one of four corporations under their control: Marketing Service Inc., R Y B Realty, Steps to Better Living Inc. and Orbit Management Group, all operating in Kings County.
“As our complaint demonstrates, Yury and Rimma Baumblit lined their pockets by preying on some of the most vulnerable members of society,” Schneiderman said.
“Our complaint demonstrates that over several years, the Baumblits carried out a deliberate and illicit scheme to defraud taxpayers, rip-off Medicaid, and force residents into programs and services that benefited no one but themselves. We will deliver swift justice to the Baumblits once and for all.”
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Yury Baumblit, 65, was charged last year with two misdemeanors accusing him of illegally evicting tenants.
Three-quarter housing is regarded as a living arrangement somewhere between a regulated halfway house and a private residence. They typically provide shelter to poor people in treatment for alcohol and drug abuse, mentally ill individuals and people who refuse to go to homeless shelters.
Investigators found that the Baumblits kept kept their three-quarter homes in deplorable conditions, often without heat or air conditioning, and with vermin, mold, persistent leaks and broken windows, Schneiderman said.
Residents were also subjected to acts of violence and threats by the Baumblits and their house managers, and were locked out of the houses during much of the day, he added.
In addition to the felony charges filed Wednesday, the Attorney General’s Medicaid Fraud Control Unit filed a False Claims Act lawsuit and other civil causes of action against the Baumblits and others seeking over $1.9 million dollars in damages plus penalties.
