7 Long Island residents charged in multimillion-dollar Medicaid fraud

Eight employees of transportation companies — including seven from Long Island — were charged with fraudulently billing Medicaid for millions of dollars for services that were never provided, according to an indictment unsealed Tuesday at the federal courthouse in Central Islip.

The defendants also submitted claims to Medicaid for people who were dead, hospitalized or incarcerated, prosecutors with the Eastern District of New York said in a statement, which also said the defendants submitted artificially inflated claims to Medicaid. The defendants are also accused of billing the agency more than $16 million to transport clients to addiction treatment centers in New York City — even though there were numerous treatment centers on Long Island the beneficiaries could have used.

“As alleged, the defendants abused the trust placed in them by Medicaid by falsely and brazenly treating this essential program like a piggy bank for their own enrichment,” said Breon Peace, the United States attorney for the Eastern District of New York. “Their transportation scam ended today with law enforcement providing the defendants a free ride to the courthouse to face serious criminal charges.”

The indictment charges the defendants with conspiracy to commit health care fraud, health care fraud, conspiracy to defraud the United States and pay health care kickbacks, paying health care kickbacks, and money laundering.

The Long Island defendants are: Noman Ahmed, 37, of Port Jefferson Station; Adnan Arshad, 45, of Mount Sinai; Rehman Diwan, 24, of Hicksville; Jessica Hendrickson, 36, of Patchogue; Mohammed Saleem, 38, of Dix Hills; Faisal Shamsi, 49, of Massapequa; and Waqas Shamsi, 44, of Massapequa. Jose Marte, 33, of the Bronx, was also charged in the health care scheme, prosecutors said.

The defendants were arrested on Tuesday and all but Marte appeared before U.S. Magistrate Judge Arlene R. Lindsay for arraignment Tuesday afternoon. Lindsay released the seven defendants on bond following the arraignment. Marte is scheduled for arraignment on Wednesday.

“He has asserted his innocence at this time,” said Diwan’s attorney, Nancy Bartling. “He has indicated to me that all the transports he did were legal and legitimate.”

Attorneys for the other defendants did not immediately return requests for comment.

The defendants owned, operated or worked for several transportation companies, according to the indictment.

Between December 2020 and the present, the defendants paid illegal kickbacks to Medicaid beneficiaries so those beneficiaries would order medical transportation to addiction treatment centers and other facilities from the defendants’ businesses, prosecutors said. They said the defendants generally did not provide transportation, but their companies fraudulently billed Medicaid millions of dollars.

The defendants instructed the Medicaid beneficiaries to order rides to New York City treatment centers to obtain higher reimbursement rates, prosecutors said, and transportation companies owned or operated by the defendants billed Medicaid more than $16 million for trips to just three treatment centers in New York.