NEWARK, N.J. - A Springfield, New Jersey, man was sentenced today to more than four years in prison for his role in a scheme that used bogus records and unqualified home health aides to defraud Medicare out of $7 million, U.S. Attorney Paul J. Fishman announced.
Paul Mil, 67, previously pleaded guilty before U.S. District Judge Katharine S. Hayden in Newark federal court to an information charging him with conspiracy to commit health care fraud, money laundering and tax evasion. Judge Hayden imposed the sentence today in Newark federal court.
According to documents filed in this case and statements made in court:
Mil was the owner of People Choice Home Care Inc., a home health care agency located in Elizabeth, New Jersey, that provided home health aides and health care services to New Jersey residents. Mil was also the registered agent for HHCH Health Care Inc. in Linden, New Jersey, a home health care agency owned by Irina Krutoyarsky, 62, of Springfield, New Jersey. Home health aides visit patients at their homes and provide a variety of services, such as assistance with eating, dressing and grooming. These services were subsidized under the New Jersey Medical Assistance Program (Medicaid).
Mil, Krutoyarsky and others defrauded Medicaid through a variety of ways. First, they submitted false documents to the New Jersey 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.
Second, Mil, Krutoyarsky and others 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. In certain instances, home health aides gave cash kickbacks to patients who were also participating in the scheme.
Third, Mil, Krutoyarsky and others hired individuals with no home health certifications and no status in the country and then sent them to patients’ homes. They then billed Medicaid, fraudulently claiming that the services had been provided by duly certified home health aides.
In total, Mil and others defrauded Medicaid out of $7 million. After Medicaid paid the claims and transferred the funds into bank accounts controlled by Mil, he used the proceeds to purchase real estate and personal property.
Additionally, between 2007 and 2011, Mil cheated the IRS out of approximately $918,000 in taxes due and owing. As part of the scheme, home health aides were sent to the homes of patients who were not eligible for Medicaid. These patients wrote checks payable to HHCH and People Choice. Mil then cashed these checks at check cashing businesses and equally divided the cash with Krutoyarsky. On his corporate tax returns, he falsely characterized these payments as legitimate business deductions, thus reducing his business’ corporate taxes. He then filed federal individual income tax returns that concealed this income.
In addition to the prison term, Judge Hayden sentenced Mil to serve three years of supervised release and ordered him to pay forfeiture of $7 million. As part of his plea agreement, Mil also had to forfeit six homes and properties in New Jersey and New York.
U.S. Attorney Fishman credited agents of the FBI, under the direction of Special Agent in Charge Timothy Gallagher in Newark; IRS-Criminal Investigation, under the direction of Special Agent in Charge Jonathan D. Larsen; U.S. Citizenship and Immigration Services; New Jersey Office of the State Comptroller, Medicaid Fraud Division under the direction of Director Josh Lichtblau; The Enforcement Bureau of the New Jersey Attorney General’s Office on behalf of the Board of Nursing, Acting Attorney General Christopher S. Porrino; the New Jersey Department of Labor under the direction of Commissioner Harold J. Wirths; the Marlboro Police Department, under the direction of Chief Bruce Hall; and the U.S. Department of State-Diplomatic Security with the investigation leading to today’s sentencing.
The government is represented by Senior Litigation Counsel V. Grady O’Malley and Assistant U.S. Attorneys Peter Gaeta and Anthony Moscato of the New Jersey U.S. Attorney’s Office Criminal Division in Newark.
Defense Counsel: Nicholas G. Kaizer Esq., New York