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Corrections Officers Implicated in Healthcare Fraud




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We see many unusual False Claims Act cases. Criminals can be very enterprising. Their creativity is often amazing. Ultimately, most get caught and usually after a whistleblower steps forward and reports their wrongdoing. Unfortunately, it appears that New York State corrections officers and troopers are at the heart of this fraud.

Our story begins with Joshua Miller and the business he owns, Syracuse Hearing Aid Centers. If what prosecutors are saying is accurate, Miller’s scheme is one of the more creative frauds we have seen.

Hearing aids are certainly not a glamour business. Unless you suffer from hearing loss, you probably have never seen the inside of a hearing aid store.

Onondaga County New York prosecutor William Fitzpatrick claims that our alleged fraudster, Joshua Miller, decided to expand his business into high end headphones. Commonly used to listen to music or play video games, these headphones retail between $200 and $300 apiece. Not many audiophiles visit their nearby hearing aid store when shopping for audio gear. Miller is not your ordinary entrepreneur, however.

Miller’s ticket to paradise? He sold them to state employees and billed the New York State employees healthcare plan, Empire, for $3000 a piece. Prosecutors say he bilked taxpayers and Empire out of an estimated $1.65 million dollars.

To make the scheme work, Miller told the state’s insurer that the headphones were actually high tech hearing aids and that they were “medically necessary. They weren’t. An audit later revealed that well over 90% of the recipients had no hearing deficit and didn’t need hearing aids (let alone music headphones).

Normally the story would end here. New York’s State Inspector General, Catherine Leahy Scott, claims that most of the headphones were obtained by corrections officers and troopers. After announcing Miller’s arrest, Leahy Scott said, “I will continue this investigation into the theft of state funds, follow the evidence wherever it leads, and pursue and hold accountable anyone who uses their state position … in furtherance of a criminal scheme.”

Where will the “evidence lead?” It appears to eight upstate New York prisons, a drug treatment center and at least one state trooper barracks. Published reports say that one corrections officer has already been implicated in the scam after reportedly receiving $70,000 in referral fees from Miller.

Thus far, there has only been one arrest, although more are expected.

And where is Joshua Miller? As of last week, he was in the Onondaga County jail, in lieu of $50,000 cash bail. If the prosecutor’s allegations are true, some of Miller’s jailers may soon become cellmates.

Healthcare fraud costs taxpayers billions each year. Because state employees receive taxpayer funded healthcare, fraud against the program is both a felony and a violation of the New York False Claims Act. The latter pays whistleblowers up to 30% of whatever the government collects from wrongdoers. Last year, the U.S. Department of Justice paid over $435 million in whistleblower awards.

Whistleblowers can make a real difference in the fight against fraud and corporate greed. To qualify for an award under the federal program (and in most states that have a state false claims law), one must retain a lawyer and file a sealed lawsuit in court. The suit must be based on original source (inside) knowledge. Generally only the first to file receives an award.

About the author. Brian Mahany is a whistleblower lawyer and former corrections officer. He has helped his clients collect over $100 million in award monies. He practices throughout the United States.

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