Westchester Ringleader Of $8M Medicaid Fraud Scheme Gets 95 Months

YONKERS, NY — The ringleader of a massive Medicaid embezzlement scheme has been sentenced to nearly eight years behind bars.

Julio Alvarado, of Yonkers, was sentenced to 95 months in prison for leading a scheme to defraud Medicaid of millions of dollars through the billing of fraudulent transportation claims, Damian Williams, the United States Attorney for the Southern District of New York, announced on Wednesday.

The 63-year-old previously pled guilty to one count of healthcare fraud.

"Julio Alvarado was the leader of a multi-million-dollar scheme to defraud Medicaid by filing false claims for medical transportation services that were never provided," Williams said. "He brazenly lined his own pockets with Medicaid funds meant to help the neediest New Yorkers. Today’s sentence makes clear that this type of criminal conduct will be prosecuted and punished to the full extent of the law."

According to court documents, from August 2017 to February 2020, KJ Transportation C Services Inc. received more than $20 million for providing transportation services for Medicaid enrollees across the New York City area. A large volume of those claims were fraudulent.

In some instances, the Medicaid recipient was deceased or abroad when KJ claimed it was transporting that person to medical appointments. In other instances, the company used stolen identities of Medicaid recipients who had never even heard of KJ and had never taken any rides with the company. In addition, some Medicaid recipients received unlawful kickbacks from defendants in exchange for either providing KJ their Medicaid information or for fraudulently scheduling trips they never took.

Alvarado supervised more than a dozen other participants in the scheme, and was responsible for billing more than $8 million in fraudulent trip claims.

In addition to the prison sentence, Alvarado was sentenced to three years of supervised release and ordered to pay $8,507,115 in restitution and to forfeit $8,507,115.

Williams praised the work of Homeland Security Investigations and the United States Department of Health and Human Services’ Office of Inspector General. He also thanked the Office of the Medicaid Inspector General for its assistance.