A Long Island taxi company owner was sentenced to 97 months (about 8 years and 1 month) in prison and ordered to forfeit over $19 million in proceeds from a nearly four-year long medical assistance fraud scheme. Adnan Arshad, 47, who operated the Long Island MTK Taxi company and co-owned the All-Star Taxi company, was convicted in the Eastern District Federal Court in New York on the 21st.
According to the Brooklyn federal prosecutors, from December 2020 to June 2024, Arshad and at least five accomplices devised a sophisticated scam to fraudulently obtain over $19 million from Medicaid through a scheme involving layers of deception.
In the U.S. Medicaid system, there is a welfare benefit called “non-emergency medical transportation.” Medicaid allocates funds to qualified taxi companies or specialized passenger vehicles to provide transportation for low-income patients without access to transportation to clinics, rehab centers, or doctors’ appointments.
The prosecution outlined four main methods used in the fraud scheme. Firstly, offering kickbacks to recruit patients: Arshad and his associates illegally paid kickbacks to Medicaid beneficiaries to attract them to book medical transportation services through their companies, especially targeting patients in need of regular methadone addiction treatment.
Secondly, falsely claiming “phantom rides”: The companies submitted claims for a large number of nonexistent transportation services to Medicaid, even applying for transportation assistance for individuals who were deceased, hospitalized, imprisoned, or otherwise unable to use the services, in order to fraudulently obtain government funds.
Thirdly, artificially extending routes to increase reimbursement amounts: To raise the fare for each trip, the companies asked beneficiaries to request transportation to addiction treatment centers in New York City, despite the availability of numerous rehab centers on Long Island. They also requested beneficiaries to provide fake boarding and drop-off addresses to show longer trip distances for higher Medicaid reimbursements.
The defendant fraudulently obtained over $16 million from Medicaid for transportation services solely to three addiction treatment centers in New York City.
Fourthly, expanding operations with fraudulent proceeds. The prosecution stated that Arshad reinvested illegal gains into purchasing more operational vehicles, continuously expanding the scope of the fraud scheme. He used the criminal proceeds to acquire luxury real estate and vehicles worth millions of dollars, including Ferrari cars, multiple BMWs, and Mercedes-Benz vehicles, leading a lavish lifestyle.
As of now, at least five accomplices have admitted involvement in the fraud scheme and are awaiting sentencing by the court.