Nearly two dozen co-conspirators preyed on thousands of homeless and poor, promising free shoes to those with Medicaid cards in exchange for a battery of unnecessary tests and equipment, according to an announcement by Brooklyn District Attorney Ken Thompson. The scheme fraudulently billed Medicare and Medicaid nearly $7 million.
In the 199-count indictment, which included nine physicians and eight different companies, prosecutors allege that recruiters sought potential patients outside of homeless shelters and welfare offices throughout New York City, luring them to medical clinics to have their feet examined. After a cursory exam, Medicaid beneficiaries were provided with sneakers, along with orthopedic insoles, ankle braces or other medically unnecessary equipment. Aside from the nine physicians, the scheme cast a wide net of nurse practitioners, physician's assistants, technicians, office staff, recruiters, managers, and billers.
"These defendants allegedly exploited the most vulnerable members of our society and raked in millions of dollars by doing so," Thompson said in a statement. "The many poor people who were allegedly targeted at homeless shelters, welfare offices and soup kitchens and referred to as 'guinea pigs' by the defendants were exploited for hours, if not days, just because they needed a pair of shoes. That so many doctors allegedly participated in this elaborate scheme to defraud a health care system designed to help the poor is truly disgraceful."
Prosecutors have identified Eric and Polina Vainer as the mother-son tandem who served as the mastermind behind the scheme. Following the initial exam, Eric Vainer directed clients to refer patients for additional tests including pain management evaluations, cardiograms, or physical therapy. Some of the providers allegedly paid Vainer kickbacks or split the insurance reimbursement with him. His mother, Polina, oversaw the billing and payroll departments for several clinics.
The scheme has been coined by investigators as "The Sneakers Case," adding to a string of weird and innovative fraud scams this year, some of which have explointed the homeless in order to fraudulently bill Medicaid. At $7 million, the scam is not as high priced as others--witness the New Orleans group of 20 that was indicted for home health fraud valued at $30 million--nor is it as widespread as last year's notable 90-person takedown. However, the details of the case offer a more unique perspective of how fraudsters bilk the system.
- here's the District Attorney's statement