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Owner pleads guilty in nation's largest criminal Medicaid fraud case

Compliance Monitor, April 11, 2001

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The owner of a Brooklyn adult day care health facility pleaded guilty this week to stealing tens of millions of dollars from the Medicaid program. Lawrence Friedman was charged with billing Medicaid for senior citizens' meals, social activities, and unnecessary transportation instead of approved medical care at the Parkshore Adult Health Center. According to New York Attorney General Eliot Spitzer, this case is believed to be the nation's single largest criminal Medicaid fraud case.

Friedman will make restitution of $25 million to state taxpayers for his fraudulent billings. In addition, Parkshore will have $23.4 million withheld from its future reimbursements by the state Health Department as a result of a rate readjustment for the year 2000 and the first quarter of 2001. He will be sentenced on June 1, at which time he faces a minimum of one to three years in prison.

Friedman routinely submitted false records, between July of 1996 and December of 1999, claiming those attending Parkshore were receiving medical care including physical and occupational therapy and blood pressure screenings, according to the press release. Parkshore would receive $139 for each senior who was at the facility for five-hour "therapy" sessions. At its peak, Parkshore was operating three shifts daily and billing Medicaid for "treating" close to 1,000 people per day at two locations. In addition, Friedman also billed taxpayers for unnecessary ambulatory transportation for seniors who were able to get to the facility on their own.

"We have achieved all of our objectives in this case," said Spitzer. "The defendant has admitted all charges against him, he will receive time in prison and repay taxpayers tens of millions of dollars in ill-gotten gains."

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