3 charged with bilking Medicaid in drug-treatment scheme

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A New York attorney who operated two drug treatment programs has been charged with bilking the state’s Medicaid program alongside the notorious owners of “three-quarter houses.”

New York Attorney General Eric T. Schneiderman announced the arrest of Anthony Cornachio, who owned and operated NRI Group and Canarsie A.W.A.R.E. Cornachio is being charged with participating in a Medicaid fraud scheme alongside Yury Baumblit and Rimaa Baumblit--the owners of unregulated three-quarter houses in New York City--who were arrested earlier this year

A New York Times investigation in 2015 revealed the Baumblits were using the sober homes or transitional houses as part of a scheme to defraud Medicaid. The investigation found that residents were often forced into treatment programs and sometimes persuaded to relapse in order to continue substance abuse treatment.

According to Schneiderman, Cornachio allegedly paid the Baumblits more than $900,000 in kickbacks to siphon sober home residents to his drug treatment programs. Cornachio then billed Medicaid at least $1.7 million for unnecessary treatment. Prosecutors are also seeking more than $5 million in False Claims Act damages, plus penalties.

“We allege that the defendants engaged in a deliberate scheme to exploit those struggling with substance abuse in order to line their own pockets with millions,” Schneiderman said in the announcement.

In states like Florida, the substance abuse treatment industry has been overrun with kickbacks schemes and marketers who pay addicts to enroll in treatment programs or halfway houses, leaving providers scrambling to rehabilitate the industry’s image. Although the federal budget has devoted more funding to substance abuse treatment in the wake of opioid overdoses, more stringent oversight is necessary to root out widespread corruption.