Medicaid fraud investigations in New York City have been on the rise for several years. Most of them usually resulted in non-criminal dispositions. However, the certain categories of Medicaid beneficiaries have been hit more often then others and some of them have been consistently prosecuted in criminal courts at much higher rates compared to the other groups. With the recent Human Resources Administration management shuffle, which occurred since Mayor DeBlasio took office, there has been a spike of criminal prosecutions for Medicaid fraud in NYC. Some of the most consistently targeted groups are the spouses of MTA (Metropolitan Transit Authority) employees. This article explains why MTA employees’ families are targeted by fraud investigators, what raises red flags before the investigation begins, what the consequences of such fraud are, and how to protect against them.


Anatomy of a Medicaid fraud case

In very basic terms, Medicaid fraud occurs when the benefits recipient makes a false statement about their household income to the government agency responsible for administering the program. In NYC such agency is the Human Resources Administration. In order to qualify for any of the public benefits programs, the recipient household income must not exceed a certain level. The reality is that the edibility levels are pretty low, making it very difficult for most families to qualify for Medicaid.


The main issue arises when it comes to determining the household income. Married couples are considered one household in most cases, even if they don’t live together on a full time basis. This includes the families where spouses simply don’t get along together and may choose to live separately for some time. These “on and off” relationships are very common. The same rules apply to couples that have children together but are not formally married.


In such cases, not disclosing the fact that the couple is married, may be considered fraudulent.


Furthermore, the applicant must disclose all types of income, including earned and unearned income, and all types of contributions and financial support from anyone else.


Making a false statement on an application for any public benefits is a crime and can give raise to criminal investigation , arrest, and prosecution.


Why MTA employees’ families are targeted


As stated above, MTA employees’ families are specifically targeted by NYC fraud investigators. Traditionally, City and other public sector employees have been the subject of increased scrutiny when it comes to public benefits fraud such as Medicaid, Section 8, and food stamps. Each year our office represents a number of spouses of MTA workers who were receiving some of these benefits. There are several reasons this group is singled out. First, it is easy for the city agency such as the HRA to access employment databases of other government agencies such as the MTA. In fact, the HRA maintains some of the most sophisticated computer records matching databases in the country, making employment and wages searches quick and efficient. Second, most MTA employees’ wages are high enough to disqualify their households from all public benefits programs. Third, all MTA employees have health insurance, which automatically disqualifies their families from Medicaid. These three facts combined make almost a guarantee that when the HRA database match comes up with a name of a recipient who is married to or has children with a MTA worker, further inquiry will prove that fraud took place.


So, in short, MTA spouses make an easy and soft target, which is why they are targeted at a higher rate than other recipients. The same applies not only to MTA but also to other government or government-related agencies such as ConEd, FDNY, and even the Department of Corrections.


What Raises Red Flags


As stated above, the HRA uses very sophisticated databases to access all sorts of information. The goal is to come up with evidence that (1) the family lives together, as one household, and (2) that has not been disclosed, and (3) the household income (combined) exceeds the allowed limit, making the recipient ineligible. Therefore, the following factors generally raise red flags, triggering a fraud investigation:


  1. Birth Certificate information showing the MTA worker as the father of the children who receive the benefits
  2. MTA employment records showing the father’s address as that of the recipient family
  3. DMV records (including the driver’s license) that have the same address
  4. Joint bank accounts
  5. MTA spouse receiving mail at the address where the family lives
  6. Auto insurance records showing both spouses on the same policy
  7. Jointly filed tax returns
  8. Both spouses’ names appearing on property deeds


HRA fraud investigators have access to numerous databases that can reveal these facts. Once there is a match, they will automatically start to look into the case, conducting additional investigation. They may and often do visit the recipient family’s home and check who lives there. They may speak to neighbors and building supers to see if the husband actually lives at the address.


Consequences of Medicaid Fraud


Once the investigation is completed, the recipient spouse will often receive the interview letter requesting her to come in for the “interview”. In reality, this is often no more than a pretext to get her to come in so that she could make incriminating statements. The investigator already has most of the documents, even though the interview letters lists many documents the recipient is to bring with her. So, the best advice we give our client is to call an experienced Medicaid fraud attorney before speaking with the investigator. The worst-case scenario in cases involving spouses of MTA employees on public benefits is criminal prosecution. If the agency determines to press criminal charges, it will refer the case to the District Attorney’s Office and eventually the target spouse will be contacted by a detective with the DA Detective Squad. That process takes approximately 8-12 months. Because the Medicaid program paid for the recipient’s medical coverage, the City wants to recoup the money and the fraud itself is a financial crime. The spouse will then be arrested and charged with several felony counts, which include Welfare Fraud and Grand Larceny.


Consequences of this may include having a permanent criminal record, immigration issues for non-citizens, loss of employment, and professional discipline for those holding professional licenses.


How to protect yourself


There are many ways to avoid legal trouble when applying for Medicaid and other public benefits. The best and most effective way to stay safe is not to commit fraud. Unfortunately, many cases involve situations where the applicant really is unaware that her actions could be fraudulent. For example, in “on and off” sort of family relationship, many women leave out the information about the husband or partner because in their mind they don’t live together.


If you received an interview letter from the HRA, speak to our experienced NYC Medicaid fraud lawyers. We have handled hundreds and hundreds of Medicaid fraud cases in New York, including scores of cases involving MTA employees. Call us today at (212) 577 6677 before speaking with the investigators.