Huntington Medical Equipment Store Indicted on $2M Medicaid Fraud: AG

A Huntington medical equipment company and its major shareholder were indicted Friday on 50 charges in connection to stealing more than $2 million from Medicaid using customer’s identification numbers, according to Attorney General Eric T. Schneiderman.

The now closed Bennett Surgical Supply, Inc., located at 382 New York Ave., and its majority shareholder, Katia Donnelly, submitted thousands of false claims to Medicaid, causing Medicaid to pay more than $2 million dollars over six and a half years, the AG says.

From Jan. 1, 2006 to June 30, 2012, Donnelly served as the operator and 51 percent owner of Bennett when she allegedly falsified the claims to Medicaid.

The checks Donnelly claimed were for paying suppliers for the inventory were instead used for her personal use, the investigation claims. Donnelly allegedly used the money to pay for a time share in the Dominican Republic (which she visited frequently), a car loan and numerous credit cards used for travel and online shopping, among other things.

“Stealing from Medicaid drains resources from a program that is designed to help some of our most vulnerable members of society,” Schneiderman said in a press release.

The investigation in this case allegedly revealed:

• Donnelly used the Medicaid identification numbers of her customers to illegally purchase items.
• Donnelly falsified hundreds of records in Bennett’s customer files, including Official New York State Prescriptions, to make it look like physicians and a physician assistant ordered wound dressings and other items for their patients.
• Bennett received physician orders that were altered to include additional items.
• Donnelly falsified Bennett’s books and records to make it seems like she bought and paid for inventory that she billed Medicaid for dispensing to her customers.

The AG says these items were never processed, were not medically necessary, were never ordered by the customers’ medical professionals and were never delivered to the customers.

These purchases caused Bennett to be the highest biller statewide for at least 13 DME procedure costs, including eight wound dressing codes, three ostomy supply codes, one bariatric hospital bed code and one pressure reducing mattress code, the AG says.

Bennett and Donnelly are being charged with first-degree grand larceny, 17 counts of first-degree offering a false instrument for filing, 16 counts of second-degree criminal possession of a forged instrument and 16 counts of first-degree falsifying business records.

Donnelly faces up to 8 1/3 to 25 years in state prison if convicted of the top charge. She is being held on $500,000 cash bail with a $2 million bond alternative.