The Village of Island Park attorney, Anthony Cornachio, and a Brooklyn couple have been charged in an alleged $1.7 million Medicaid fraud scheme, according to State Attorney General Eric Schneiderman.
Cornachio, 74, of Garden City, who is a Nassau Community College trustee, was arrested on Nov. 11, along with Yury Baumblit, 66, and Rimma Baumblit, 60, of Brooklyn.
Charges were also filed against two Medicaid-enrolled drug-treatment programs controlled by Cornachio, NRI Group LLC and Canarsie A.W.A.R.E. Inc., as well as the Baumblits’ company, Back on Track Group Inc.
According to prosecutors, the Baumblits operate what are called “three-quarter houses,” which are housing units for poor and penniless, formerly homeless people who may have been recently released from jail or prison. The New York City Human Resources Administration largely funds the housing.
Prosecutors alleged that the Baumblits forced residents in their Brooklyn housing units to attend drug-rehabilitation sessions at Cornachio’s programs, NRI and Canarsie A.W.A.R.E, whether or not they needed the services, according to papers filed in New York City Criminal Court and State Supreme Court. If they did not attend the sessions, they faced eviction, according to authorities.
In return, prosecutors said, the Baumblits received illegal kickback payments from Cornachio amounting to $900,000, dating back to at least 2013. To make the payments, officials charged, Cornachio submitted an estimated $1.7 million in "false" Medicaid reimbursement claims, often for “medically unnecessary” treatments.
Prosecutors are seeking more than $5 million in damages, plus penalties, from the three defendants.
“We allege that the defendants engaged in a deliberate scheme to exploit those struggling with substance abuse in order to line their own pockets with millions,” said Schneiderman. “Medicaid cannot serve as a personal piggy bank for criminals and fraudsters who have little regard for the well-being of their fellow New Yorkers.”
Cornachio maintains his innocence. “I didn’t do anything wrong,” he said in a Herald phone interview. “I have done well as a lawyer and was trying to give some back. When a person is in drug treatment, they need a safe, drug-free place to stay. These were long-term street addicts, sleeping in subway tunnels, doorways, committing larceny to pay for the drugs, prostituting themselves.”
According to Cornachio, each patient underwent an evaluation by a certified clinician and a nurse. Only hard-core drug addicts were accepted into treatment. Many were turned away.
Some had Medicaid, and some had private insurance, he said. They were charged the regular rate, not a higher one, he added.
“I made no money on this,” Cornachio said. “In fact, I put $540,000 of my own money into the business. We had a high success rate.”
Investigators also charged that the three-quarter housing units had leaking pipes, mold, no heat and no fire exits; were missing fixtures; and were infested with bugs.
Conditions at the units were first brought to light in a New York Times exposé, after which the City of New York began moving out residents of the homes.
Cornachio said that an exterminator had to come often because tenants brought bugs with them from the streets. He said the buildings received only one citation, when a New York City inspector found a roof door locked. It was subsequently unlocked, he said.
“I intend to fight this,” Cornachio said. He also said that intends to remain the Island Park village attorney. Hauppauge-based attorney Joseph Quatela is representing him.
Cornachio, NRI and Canarsie A.W.A.R.E. were charged with first-degree grand larceny, second-degree money laundering and a violation of the Social Services Law, which prohibits an enrolled Medicaid provider from paying kickbacks.
Yury and Rimma Baumblit and Back on Track Group Inc. were charged with first-degree grand larceny, second-degree money laundering and a violation of the Social Services Law.
If convicted of all charges, the three each face up to 25 years in state prison.
Schneiderman also froze the bank accounts and other property held by the three, amounting to more than $5.2 million.
Special Assistant Attorneys General Megan Friedland and Erin Kelsh are prosecuting the case.
The Baumblits were indicted earlier this year in another alleged kickback scheme with a different substance-abuse treatment program, according to Schneiderman. They remain in jail while awaiting trial in Kings County Supreme Court.