Suffolk Officials Push Rewards For Tips Exposing Medicaid Fraud

HAUPPAUGE, NY — Suffolk County prosecutors have helped build Medicaid fraud cases resulting in a $19 million forfeiture and another $35 million in fraudulent billing, officials said.

However, District Attorney Ray Tierney said his office receives none of the complaints submitted to New York's Medicaid fraud hotline.

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State lawmakers joined Tierney and Suffolk County Executive Ed Romaine on Thursday to unveil two bills that would require credible fraud tips to be shared with local district attorneys, track what happens to each allegation and reward whistleblowers whose information leads to a guilty plea or conviction.

"We're willing to do that, and we will do that," Tierney said. "We just need the information."

State Sen. Dean Murray unveiled the two-bill package at the H. Lee Denison Building in Hauppauge alongside Romaine, Tierney, Assemblyman Joe DeStefano and state Sens. Anthony Palumbo and Mario Mattera.

The first proposal would designate the New York State Office of the Medicaid Inspector General, or OMIG, as the clearinghouse for the state's official Medicaid fraud hotline, 1-877-87-FRAUD.

The Medicaid Inspector General already evaluates complaints to determine whether allegations appear credible. Murray's legislation would require credible allegations to be sent to both the state attorney general's Medicaid Fraud Control Unit and any prosecutor with jurisdiction, including a local district attorney.

Within 30 days, authorities would have to decide whether to investigate the allegation and which agency would lead the case. That decision would be reported to the Medicaid Inspector General, which would also have to be notified of the outcome when the investigation ends.

Murray said simultaneous disclosure is important because a complaint that appears insignificant to a statewide agency could connect with evidence already gathered by local investigators.

"There may be a tip that the AG thinks doesn't mean much, but locally that could be the missing piece of an open investigation," Murray said. "You just don't know. Why would we let the AG make that determination without our local DA having any input or knowledge of the tip in existence?"

The Medicaid Inspector General would also prepare an annual report showing how many tips were received, how many generated investigations, which agencies handled the cases and how the investigations ended. The report would go to the governor, attorney general and legislative leaders.

Rewards Would Come From Fraud Recoveries

The second bill would establish a Medicaid Fraud Tip Reward Program for people whose documented information directly contributes to a guilty plea or conviction.

"Let's sweeten the pot," Murray said. "Let's give a little incentive there for folks to call it in if they see something funny going on."

Between 1 and 2 percent of money obtained through Medicaid fraud recoveries, seizures and forfeitures would be placed into a dedicated reward fund.

A seven-member board would establish eligibility standards, set minimum and maximum payments and determine how rewards would be issued. It would also create procedures to protect a tipster's anonymity when requested.

The governor would make two appointments to the board. The lieutenant governor and the majority and minority leaders of the state Senate and Assembly would each select one member.

The proposals were still being finalized Thursday and did not yet have bill numbers. Murray said he expected them to be formally introduced the following week.

The bills could be considered if lawmakers return to Albany for a special session before the end of the year. Otherwise, Murray said they would be reintroduced in January.

"Everybody's screaming about affordability," Murray said. "Why don't we help our taxpayers right now by not throwing money into the pockets of criminals?"

Suffolk Cases Involved Medical Transportation

Tierney said Suffolk's Medicaid fraud cases have largely involved nonemergency medical transportation companies rather than the fraudulent clinics or medical "mills" more commonly associated with densely populated areas.

He highlighted the federal prosecution of Adnan Arshad, owner of MTK Taxi in Montauk and co-owner of All-Star Taxi in Ronkonkoma.

Federal prosecutors said Arshad and his co-conspirators paid kickbacks to Medicaid recipients and submitted transportation claims that generally did not occur. Some claims involved people who were dead, hospitalized or incarcerated.

Arshad was sentenced July 21 to 97 months in federal prison and ordered to forfeit more than $19 million, including properties and vehicles.

Tierney said Suffolk County police detectives assigned to the district attorney's office began the investigation. Because the conduct extended beyond Suffolk, the case was brought to the U.S. Attorney's Office for the Eastern District of New York, where a special assistant district attorney from Tierney's office helped prosecute it.

A pending federal case also involves Tri-Hamlet Taxi, a Shirley-based medical transportation business.

Federal prosecutors charged Saad Aziz and Zabed Chowdhury in July with paying kickbacks and billing Medicaid for transportation that was not provided or was artificially inflated. Prosecutors said the company fraudulently billed Medicaid for more than $35 million between 2019 and 2025. The defendants are presumed innocent unless proven guilty.

Tierney said such investigations require extensive surveillance, financial analysis and personnel because authorities often must establish that hundreds or thousands of claimed trips never occurred.

When asked whether Suffolk prosecutors could handle a substantial increase in referrals, Tierney acknowledged that his office's resources are already stretched but said prosecutors would prioritize the work.

"That would be a great problem to have, because first we have to get there," Tierney said. "Our resources are spread thin to begin with. But you make do, so we'll make do."

Romaine called for local prosecutors to retain part of the money recovered through Medicaid fraud cases and reinvest it in additional investigations.

"When you steal money from this program, you steal it from the very people that would benefit from this program," Romaine said. "We need to fund our local efforts by saying if you recover money from a fraudster, you're entitled to keep some of that money to keep on going after fraudsters."