2 Upstate New York Men Indicted of Stealing over $1 Million from Medicaid

Two Otsego County men are facing grand larceny charges for trying to defraud Medicaid of over $1 million via transportation scheme.

Announcement from New York State Comptroller DiNapoli

According to an announcement from New York State Comptroller Thomas DiNapoli, two high-ranking officials of Phinaliz Communications allegedly hatched a plan to bilk over a million dollars from Medicaid.

Phinaliz is an Oneonta-based transportation provider for those using the govermental program. Medicaid provides health insurance for adults and children with limited income.

DiNapoli said 46-year-old Philip Mtui and 47-year-old Mbaga Kaiza allegedly crafted a scheme where they submitted inflated transportation service claims over the course of four years.  Mtui is the owner while Kaiza is the operational manager.

Said the comptroller:

[They] allegedly sought and received payments for rides that never happened and billed multiple times for rides that did occur. In some instances, they allegedly paid kickbacks to Medicaid enrollees for using their transportation service and providing their patient information to help facilitate the fraud.

Oneonta Police Chief Christopher Witzenberg added the kickbacks most likely helped to fuel "substance abuse issues for vulnerable people, resulting in a host of other complications in our community."

In all, the ploy managed to bilk over $1 million from Medicaid. An exact amount of what was stolen was not announced as the amount is still estimated at this time.

Charged with Grand Larceny

DiNapoli first announced the arrests in August, but three were implicated in the scheme.

Mtui and Kaiza were arraigned before Judge John F. Lambert in Otsego County Court and were charged with grand larceny in the first degree, which is a felony. They will return to court on May 6.

A third defendent had been identified as Tony Taylor in a prior release. Taylor, who was not mentioned in the latest update, was a manager, dispatcher and driver for Phinaliz Communications.

He was originally arrested for conspiracy in the sixth degree related to the kickback scheme and is set to be arraigned on September 19.

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In New York Sate, first degree Grand larceny is a Class B felony that carries a maximum sentence of 25 years behind bars, per the Law Offices of Stephen Bilkis & Associates.

The defendents are presumed innocent until proven guilty. The scheme was uncovered by numerous state, local, and federal authorities including the U.S. Department of Health and Human Services Office of the Inspector General, the Otsego County Sheriff’s Office, the New York State Department of Financial Services - Criminal Investigations Unit, and multiple other departments.

DiNapoli Warns Other Fraudsters

The comptroller is hoping that those intending to defraud or steal money from federal or governmental assistance programs think twice.

"Our joint investigation will ensure justice is served in this case and I hope it is a warning to anyone who would try and defraud New York’s Medicaid system," he said.

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