Owner Of Home Health Care Agency Admits Fraud, Bribery And Other Charges
NEWARK, N.J. – The owner of a home health agency today admitted her role in a $7 million scheme to defraud Medicaid and engage in bribery, money laundering, and tax evasion, U.S. Attorney Paul J. Fishman announced.
Irina Krutoyarsky, 61, Springfield, New Jersey, pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information that charged her with conspiracy to commit health care fraud, bribery, conspiracy to commit money laundering, and tax evasion.
According to documents filed in this case and statements made in court:
Krutoyarsky owned HHCH Health Care Inc., of Linden, New Jersey, which provided home health aides and health care services to New Jersey residents. Home health aides visit patients at their homes and provide a variety of health care services, such as assistance with eating, dressing, and grooming. These home health aide services were subsidized under the N.J. Medical Assistance Program (Medicaid).
Krutoyarsky and her conspirators defrauded Medicaid by submitting false documents to the N.J. Board of Nursing, the state agency responsible for issuing home health aide certifications. Krutoyarsky falsely represented that prospective home health aides had attended and satisfactorily completed required training and testing. In truth, Krutoyarsky charged prospective home health aides hundreds of dollars for fraudulently obtaining their certifications.
Krutoyarsky also fraudulently billed Medicaid for services not actually rendered to patients. Numerous HHCH home health aides routinely falsified records that claimed they had visited patients and provided them health care services. In truth, these home health aides had other jobs, were on vacations overseas, or were in other parts of the state during the times they claimed they were with patients. Home health aides sometimes gave cash kickbacks to patients who were also participating in the scheme. Federal agents introduced a cooperating witness (CW), posing as a prospective home health aide to Krutoyarsky. During one meeting in January 2012, Krutoyarsky and another conspirator meet with the CW to discuss having him join the scheme to defraud Medicaid. In explaining the scheme, Krutoyarsky explained that they would fraudulently bill Medicaid to obtain “free money [from the] Government.”
Krutoyarsky hired individuals with no home health certifications and no status in the country and then sent them to patients’ homes. Krutoyarsky and her conspirators then billed Medicaid, fraudulently claiming that the services had been provided by duly certified home health aides.
Krutoyarsky defrauded Medicaid out of $7 million. She directed certain home health aides to establish checking accounts at a bank near HHCH’s office and then took control of their checkbooks. After Medicaid paid the claims and transferred the funds into HHCH accounts, Krutoyarsky then transferred portions of the money into the aides’ accounts and used the money to purchase, maintain, and pay for real property in New Jersey, New York, Florida; purchase personal property for her own use and benefit; and pay for personal expenses for her own use and benefit and the use and benefit of her family.
Krutoyarsky also bribed an employee of the N.J. Department of Labor (NJDOL), who was working in an undercover capacity with federal agents. In mid-2010, the NJDOL received a complaint that Krutoyarsky was not paying overtime wages to her employees and commenced an investigation. The department demanded Krutoyarsky produce certain HHCH records. Realizing that providing these records would reveal the Medicaid fraud scheme, Krutoyarsky paid approximately $10,000 in a cash bribe to the employee for the purpose of obstructing and unlawfully influencing the NJDOL investigation. The employee, however, was wearing a recording device and recorded Krutoyarsky making the bribe payment on video.
In May 2011, Krutoyarsky paid a second cash bribe of approximately $15,000 to the employee for the purpose of obstructing and unlawfully influencing a second NJDOL investigation related to one of Krutoyarsky’s conspirator’s companies. This bribe payment was also captured on video.
Between 2007 and 2011, Krutoyarsky cheated the IRS out of $907,150 in taxes due and owing to the United States. She sent home health aides to the homes of patients who were not eligible for Medicaid. These patients wrote checks payable to HHCH. A conspirator cashed these checks at check-cashing businesses in New Jersey and equally divided the cash with Krutoyarsky. Krutoyarsky also issued HHCH checks to “no show” employees, who then wrote personal checks back to Krutoyarsky. On her corporate tax returns, she falsely characterized these payments as legitimate business deductions, thus reducing her business’ corporate taxes.
The counts of conspiracy to commit health care fraud, bribery and money laundering each carry a maximum potential sentence of 10 years in prison, and the count of tax evasion carries a maximum potential sentence of five years in prison. All counts are also punishable by a fine of $250,000. As part of the plea agreement, Krutoyarsky will be ordered to pay a $7 million forfeiture money judgment to the United States and will forfeit several homes and properties in New Jersey, New York, and Florida, as well as hundreds of thousands of dollars seized from her bank accounts or bank accounts that she controlled. Krutoyarsky’s sentencing is scheduled for Sept. 14, 2015.
As other defendants, the charges and allegations contained in the complaint are merely accusations, and those defendants are presumed innocent unless and until proven guilty.
U.S. Attorney Fishman credited special agents of the FBI, under the direction of Special Agent in Charge Richard M. Frankel, in Newark; IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; U.S. Citizenship and Immigration Services; Acting N.J Attorney General John J. Hoffman; N.J. State Comptroller Marc Larkins; Division Director Mark Anderson, Office of the State Comptroller, Medicaid Fraud Division; New Jersey Division of Consumer Affairs, under the direction of Acting Director Steve C. Lee; the N.J. Board of Nursing; the N.J. Department of Labor, under the direction of Commissioner Hal Wirth; U.S. Department of State-Bureau of Diplomatic Security; and the Marlboro Police Department, under the direction of Chief Bruce Hall, for the investigation leading to today’s guilty plea.
The government is represented by Assistant U.S. Attorneys V. Grady O’Malley, Peter Gaeta, and Anthony Moscato of the U.S. Attorney’s Office Criminal Division in Newark.
Defense counsel: Edward V. Sapone Esq., New York