Fraudulent Medicaid claims filed through drug treatment centers fund lavish purchases
Investigations into New York City-based Narco Freedom, following indictments of the father-son ownership duo in October, reveal a disturbing lack of state oversight that allowed fraudulent claims by the drug treatment company to go undetected for years, according to the Crime Report. Perhaps even more disturbing was the dichotomy of abhorrent patient conditions next to the luxurious lifestyle of the nonprofit's owners.
Alan Brand and his son Jason were indicted by the New York Attorney General on criminal charges of fraud and money laundering. Days later, the federal government also filed a lawsuit against the pair, according to Reuters, alleging Narco Freedom organized an illegal kickback scheme in which individuals are offered housing in exchange for enrolling in outpatient programs for which the company billed Medicaid tens of millions of dollars. Ninety percent of Narco Freedom's $40 million annual revenue comes from Medicaid, according to the Crime Report.
Documents obtained by the Crime Report show that state agencies knew about the company's questionable billing practices in 2008, but the company still managed to skirt authorities. The Brands bought luxury cars--state prosecutors seized a Jaguar, a Corvette and a 2013 Tesla--along with purchasing homes in Florida and Long Island and hiring relatives for "no-show" jobs. Additionally, the Brands created at least six for-profit companies to embezzle money.
Meanwhile, records show the houses that were set up for patients were decrepit and unsafe, infested with bed bugs and rodents, and riddled with mold and water damage. In some cases, more than a dozen occupants slept in one room, according to NBC News.
A 2013 report by The Crime Report raised questions about the company, but state officials didn't step in until more than a year later. State and federal officials have not attempted to shut down the facilities in part because they provide treatment to 10 percent of New York City's heroin addicts; if they closed their doors approximately3,200 patients would be left without access to drug treatment services, according the Crime Report. Both the state and federal government have instead requested injunctions, and state prosecutors have asked to appoint Acacia Network to take over the company.