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Authorities arrest 16 in Medicaid fraud scandal

Patient Financial Services Weekly Advisor, May 5, 2006

Federal authorities arrested 16 people this week and charged them conspiring to defraud by buying, selling, or renewing Medicaid identification cards, the New York Times reports.

Eight New York City employees were among the 16 accused of selling hundreds of cards for $300 to $400 apiece. The cards were then used to secure medical and prescription-drug benefits in a scheme that cost the government $3.9 million in 2004, officials say.

The investigation began with a tip from a man arrested in another credit card fraud case. The man had several phone calls with Miguel Paredes, whom prosecutors say coordinated many of the transactions. The alleged conspirators made out the cards to fictitious buyers whose names, dates of birth, and addresses were supplied by the government witness, prosecutors say.

Authorities accused the city employees of conspiring to illegally issue, sell, or renew cards for fraudulent buyers. They face a maximum sentence of 20 years in prison and a $250,000 fine, if convicted.

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