Two Medicaid Providers Operated by Disqualified Individual Required to Pay Back $44 Million in Stolen Taxpayer Funds

NEW YORK, N.Y. (July 14, 2010) - Attorney General Andrew M. Cuomo today announced that two Brooklyn-based Medicaid providers controlled by an individual disqualified from the state Medicaid program have pleaded guilty to grand larceny and ordered to repay $44 million to taxpayers.

ANR Advance Medical Care Inc. (ANR), a home health care agency, and Rainbow Medical P.C., a primary care clinic, both pleaded guilty in Kings County State Supreme Court to felony charges of stealing a total $44 million from the taxpayer-funded Medicaid program. ANR pleaded guilty to Grand Larceny in the First Degree and Health Care Fraud in the First Degree, and Rainbow pleaded guilty to First- and Second-Degree Grand Larceny. Judgments in the amount of $42 million and $2 million, respectively, were entered against the companies.

Both companies illegally operated as Medicaid providers while they were actually controlled by an individual, Staten Island’s Alexander Levy, who had been disqualified from the Medicaid program since 1997. Both companies filed documents with the state asserting Levy had no control over the companies when in fact he had complete control and managed the day-to-day operations of them both.

“These companies are part of a disturbing trend in which disqualified Medicaid providers continue to operate illegally, cheating taxpayers out of tens of millions of dollars,” said Attorney General Cuomo. “This case is another example of our commitment to vigilantly investigate and prosecute the theft of tax payer dollars through Medicaid fraud.”

According to court records, ANR and Rainbow Medical were illegally controlled and operated by Levy, of 26 Grasmere Court, Staten Island, who was excluded from the Medicaid program by the New York State Department of Health in 1997 for submitting false claims for medically unnecessary services and for services that were never performed. Levy, five associates and five other companies he allegedly controlled, remain under indictment in Brooklyn on charges including Grand Larceny, Health Care Fraud and Money Laundering.

Also according to court records, money was funneled from the various health care entities that Levy controlled to shell companies that he created and owned and to a construction company he specifically set up to receive Medicaid funds. In addition, Levy manipulated funds through a home health care agency he controlled to spend hundreds of thousands of dollars on luxury cars and on paying his ex-wife to settle their divorce proceeding.

ANR is a licensed home health care agency located at 2604, Avenue U, Brooklyn. It provided home health aide services to the elderly and infirm. Rainbow, a medical clinic located at 2015 Bath Ave., Brooklyn, provided primary care to Medicaid recipients.

Defendants in the pending indictment include Zona Castellano, 69, Brooklyn NY; Aaron Bethea, 53, Brooklyn, NY; Leonid Sklyar, 30, Brooklyn NY; Yelena Bogatyrov, 43, Brooklyn NY; and Arthur Gutman, Israel.

Other corporations named in the indictment include Ambulette P.R.N., Inc. d/b/a New York City Ambulette; Global Line Transportation, Inc.; Bath Medical, P.C.; Bath Management, Inc.; and Meridian Construction & Development, LLC.

The charges against Levy and the other remaining defendants are merely accusations, and they are presumed innocent until and unless proven guilty.

The criminal case is being prosecuted by Special Assistant Attorney General Mark Cannon of the Medicaid Fraud Control Unit’s New York City Regional Office with assistance from Investigator Mark Morgan, and Auditors Thomasina Smith and Kashmir Singh. The civil case is being handled by Special Assistant Attorney General Andrew Gropper of the Medicaid Fraud Control Unit’s Civil Enforcement Unit.