New York Attorney General Letitia James has announced the indictments and arrests of five Medicaid-contracted transportation providers and their seven companies for allegedly stealing over $4.4 million from New York’s Medicaid program. The accused parties include Muhammad Rizwan Khan, Muhammad Usman Khan, and Farhan Khan of Orange County, along with their companies Tristate Express NY, Inc., Meditrans NY, Inc., Empire Trans NY, Inc., and A1 Class Car, Inc. They are charged with defrauding Medicaid of over $3.8 million.
John Gouzos and Richard Sehl of Rensselaer County, along with their companies Medi Cab Corp., Jay Auto Care, Inc., and Hojo Detail Center, Inc., are accused of stealing more than $650,000 from Medicaid. Both groups face additional charges of money laundering.
“Using vulnerable patients to personally profit at the expense of New York taxpayers is reprehensible,” said Attorney General James. “New Yorkers should be able to trust that all levels of the medical system – from doctors and hospitals to the companies driving them to their appointments – are acting honestly.”
The indictment details schemes in which both sets of defendants allegedly overcharged Medicaid for transportation services between September 2019 and October 2023. The Khans reportedly paid Medicaid recipients to use their cabs, submitted claims for fictitious trips, and added fake tolls to inflate costs by up to $50 per trip.
Between December 2021 and March 2023, Gouzos and Sehl allegedly submitted false claims for transporting patients from addresses significantly farther than where they actually lived. Both groups are also accused of running kickback schemes involving Medicaid patients to fraudulently bill more rides.
In addition to fraud charges, both sets of defendants face accusations of money laundering through shell companies. These activities purportedly allowed them to obtain illegal proceeds in cash and distribute kickbacks.
The Khans have been charged with Grand Larceny in the First Degree, multiple counts of Healthcare Fraud in the First Degree (each involving fraud greater than $1 million), Money Laundering in the Second Degree, Offering a False Instrument for Filing, and violating Social Services Law.
Gouzos and Sehl face charges including Grand Larceny in the Second Degree as well as two counts each of Money Laundering in the Fourth Degree and felony counts related to filing false documents.
All defendants are presumed innocent until proven guilty. If convicted on top counts, Muhammad Rizwan Khan, Muhammad Usman Khan, and Farhan Khan could each face up to 25 years in prison; Gouzos and Sehl could face up to 15 years.
This investigation was a coordinated effort involving several agencies including the United States Department of Health and Human Services – Office of Inspector General; New York State Department of Health; Office of the Medicaid Inspector General; Medical Answering Services; New York State Police; Orange County Sheriff's Office; Town of Crawford Police Department; Federal Bureau of Investigation; among others.
The investigative team included Detective Supervisors John Benshoff and Jeffrey Pitts alongside Detectives Aleksandr Lipkin, Katelyn Matousek, Brendan Ryan, Thomas Walker with financial analysis by Principal Auditor Investigators Sandra Iskowitz and Lora Pomponio among others. Special Assistant Attorneys General Samantha McCullagh led prosecution efforts supported by MFCU Regional Director Todd Pettigrew.
The public can report suspected Medicaid provider fraud or nursing home abuse via a confidential complaint online or call MFCU hotline at (800) 771-7755. For emergencies dial 911.
MFCU's funding for FY 2024 totals $68.9 million with 75 percent funded by a grant from U.S Department Health & Human Services amounting approximately $51.7 million while remaining covered by New York State funds totaling about $17.2 million.