ONEONTA, NY (WUTR/WFXV/WPNY) – According to New York State Comptroller Thomas DiNapoli, three people connected with the Phinaliz Communications corporation in Otsego County were arrested last Thursday, August 24, on fraud charges after they allegedly tried to steal over $1 million from the Medicaid program.
The arrests were part of a multi-year joint investigation between several state, local and federal agencies. The three men – Philip Mtui, Mbaga Kaiza, and Tony Taylor – were allegedly running a scheme that involved billing the Medicaid program for fake transportation services, duplicating and inflating costs, and paying kickbacks to Medicaid recipients.
“The disruption of this criminal behavior and associated kickbacks for fraudulent charges has an impact beyond theft,” Oneonta Police Chief Christopher Witzenberg said in a statement. “The kickbacks were undoubtably used to fuel substance abuse issues for vulnerable people, resulting in a host of other complications in our community. It is not just an example of theft and fraud from the public, but the exploitation of people for profit. I would like to thank the Otsego County District Attorney’s Office and the Otsego County Sheriff’s office, as well as the other partners in this investigation, for their cooperation and coordination.”
Under Medicaid regulations, patients may use transportation services for legitimate appointments which are billed to the program by the provider. According to the investigation, over a four-year period, the three suspects allegedly claimed payment for rides that never occurred and charged up to quadruple the amount for rides that did occur. Further investigation found that enrollees were allegedly being paid kickbacks by the company to use their service.
“The defendants allegedly engaged in a systematic scam to defraud the Medicaid program of millions of dollars,” DiNapoli said in a statement. “Medicaid fraud impacts us all and diverts money from those truly in need. Thanks to the partnership between my office, Otsego County District Attorney Muehl, Otsego County Sheriff Devlin, Oneonta Chief of Police Witzenburg and the HHS-OIG [Department of Health and Human Services-Office of the Inspector General], this fraud was uncovered and now these defendants will be held accountable.”
Mtui and Kaiza were arraigned in Oneonta City Court, both on one count of Grand Larceny in the First Degree – Theft of Over $1 million. They were both held on $250,000 bail. Taylor was arrested on one count of Conspiracy in the Sixth Degree, related to the scheme. He will be arraigned in Oneonta City Court on Tuesday, September 19.
According to the Comptroller, this is the first round of arrests stemming from this investigation. The investigation itself remains ongoing.