Driving Away with Fraud

17477953 - business executive in formal suit giving money as a bribe

Medicaid beneficiaries are eligible to receive rides to and from the doctor’s office, hospital or another medical office if their non-emergency care is approved by the government health insurance program. (This is a great benefit for those qualified beneficiaries who have a physical or mental disability; are unable to drive themselves; do not have a car that works; or, do not have a driver’s license.) An article published in The Dallas Morning News tells about three executives at a cab company with a contract to provide transportation for eligible Medicaid beneficiaries. They ran a scheme that stole more than $1 million from the health care benefits program.

The story states that three former employees of the cab company filed a lawsuit involving the cab company, its parent company and other affiliated companies stating that that virtually none of the claims submitted for transportation complied with Medicaid regulations. (Incidentally, the former employees who worked for the Medicaid Services division of the company were fired.)

The three former employees claimed their termination was directly related to the cab company’s fraudulent activities.

The three executives at the center of the lawsuit allegedly enabled the fraud to continue for years. The cab company’s vice president would fine drivers for committing Medicaid fraud, but did not report the fraudulent activity to the state or reimburse the state or Medicaid. (The extra income went directly into the cab company’s bank account.) The lawsuit also states that the cab company’s compliance officer detected fraud on a daily basis, but charged the drivers lenient fines which also went back to the company’s coffers. The parent company’s chief financial officer (CFO) allegedly commented that if the state was ”too stupid’ to recognize that claims had been paid multiple times, then the reimbursements went directly to the cab company’s bank account as well.

The three former employees claimed they all had a front row seat to the fraud. One of the drivers who worked for the company for eight years claimed he did not receive one of the two checks he was supposed to receive each week. (It looks like the cab company executives were skimming off of everyone they could.) Another employee in charge of scheduling the Medicaid trips for 10 years saw fraud committed on the trip sheets on a daily basis. Another witnessed the CFO compiling false financial statements.

The three North Texas cab company executives and their entities agreed to pay $1.125 million for violating the False Claims Act, which punishes parties for defrauding government programs. The three former employees will receive $202,500 from the settlement.

Fortunately, these three executive fraudsters were caught before they had a chance to drive away with fraud, showing that the government does not tolerate fraud or the misuse of taxpayer money. (Perhaps incarceration as a punishment would be better than a payback option. Other potential offenders may be dissuaded from committing similar crimes if they realize there are tough consequences for selfish actions.)

Source: Today’s ”Fraud of the Day” is based on an article entitled, ”Yellow Cab parent company must pay $1.125M to resolve Medicaid fraud allegations,” published by The Dallas Morning News on June 27, 2016.

Three North Texas cab company executives and their entities have agreed to pay the U.S. more than $1 million to resolve Medicaid fraud allegations.

Jackie Bewley, Jeff Finkel and Elizabeth George — all executives at Irving Holdings, the parent company of Yellow Cab — will pay a total of $1.125 million for violating the False Claims Act, a law that penalizes parties for defrauding government programs, U.S. Attorney John Bales announced Monday. The settlement also includes Irving Holdings and six other affiliated companies.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.