PLATTSBURGH | A sixth defendant has been arraigned on federal conspiracy charges related to a sweeping Medicaid fraud scheme.
Arshad Nazir was charged on Thursday with conspiracy to commit health care fraud and offering and conspiring to pay bribes and kickbacks to Medicaid beneficiaries.
Following his appearance at the Northern District of New York United States District Court in Plattsburgh, Nazir was remanded into the custody of state police, and is expected to face additional charges as part of the joint state and federal probe of what authorities contend is an industry plagued with corruption and abuse.
Details on potential state charges were not immediately available.
Ten medical taxi providers across the eastern Adirondacks have been implicated in the scheme.
Nazir, owner of Avalanche Taxi in Ticonderoga, is the 13th defendant to face criminal charges.
For the suspects, many of whom have associations with convenience stores and other businesses across the region, linking into the state’s Medicaid transport system via start-up taxi operations proved to be extremely lucrative.
Since 2015, Adirondack Taxi & Limo, Ti Taxi and Green Mountain Medical Transportation have collectively received $7.3 million in taxpayer-funded payments, according to the FBI, and Nazir’s indictment brings the total number to $9.7 million.
It’s unclear how many of those were legitimate medical trips, but the funds pouring in from the state Department of Health (DOH) constituted all but a small percentage of their profits.
The FBI cited intercepted phone discussions between Nazir and Adirondack Taxi & Limo owner Khalid Chadder discussing in their native Punjabi what appeared to be a systemic payment and gift structure designed for drivers to convince passengers to retain their services to transport them to what were ostensibly medical appointments across the region.
“Nazir informed Chadder how his drivers pay money to passengers,” according to a signed affidavit by FBI special agent Michelle L. Pherson. “Then the passengers apparently negotiate with the drivers, looking for more money.”
In the phone call, Nazir told Chadder how he’d entice passengers with $20, $40 and then $60, with two packs of cigarettes per passenger being the proverbial cherry on top.
Nazir is also accused of conspiring with his drivers and beneficiaries to bill Medicaid for phantom trips, or those in which the beneficiary drove themselves.
‘TELL ME YOU LOVE ME’
An unnamed female passenger referred to as “MB1” in court documents texted Nazir last March:
“I just set up ANOTHER ride!!! Tell me you LOVE ME,” she wrote.
Nazir appeared pleased, but warned her to limit the trips because the number of daily disbursements for round trips was limited.
“Hi Hun u can not put too many job in one day,” Nazir wrote back.
“MB1” responded with a string of three question marks.
“They were all real apt [appointments] I had thought u would appreciate,” she responded.
The casual and familiar nature of Nazir’s relationships with passengers was also used in another exchange in which a client indicated they were being recruited by one of his competitors.
“We have to talk, pops. Cuz someone is offering me lil more to ride with them but I wanted to talk with you first,” wrote the passenger.
Nazir told them he would follow up on Monday.
He also joins co-defendants Chadder, Armstrong and Gondal in scheming how they can benefit from transporting recovering addicts to and from Conifer Park, a drug treatment facility in Plattsburgh.
Armstrong, who worked at Ti Taxi, allegedly discussed with his boss, Gondal, what it would take for a patient to switch to their company for trips to the facility six days per week.
Gondal told Armstrong he should ask her what she wants and “make it happen.”
“Anything [the other company] can do, I can do better,” Armstrong told him.
Avalanche appears to be the other competitor as outlined in the newly-released charges against Nazir.
A beneficiary told Nazir her friend “MB7,” who is also a passenger, was thinking about swapping cab companies for the near-daily visits to Conifer Park.
“MB7 said the friend would go with Avalanche Taxi for $40 a day,” according to the affidavit. “Nazir told MB7 he would pay the friend $30 a day to ride with the company.”
And in a series of phone calls with another passenger last April, Nazir negotiated the conditions of transport to Elizabethtown from Ticonderoga for blood work.
The passenger asked for $20, and the two bartered back and forth until she agreed to use Avalanche Taxi in exchange for a pack of Marlboro Shorts.
Like the other defendants facing federal charges, Nazir also allegedly misrepresented trips to Medical Answering Services (MAS), the dispatch center that schedules trips and handles billing, in order to squeeze the DOH for more funds.
Nazir allegedly instructed a beneficiary to lie to MAS about a pickup location in order to generate a larger payout from the trip.
On another occasion, the DOH paid Avalanche Taxi $244.46 for a trip a patient made to Saratoga in his own personal vehicle.
MAS has not been accused of wrongdoing in the two-year probe.
DOH said they are cooperating with the investigation and said they would not tolerate “fraudulent or wasteful” behaviors.
The schemes appeared to be varied and complex, each designed to shuttle state taxpayer dollars into their suspects’ pockets, several hundred dollars at a time.
And the operators were brazen, conducting the illicit activity even as the Essex County Board of Supervisors aggressively pushed the DOH and Office of the Medicaid Inspector General to probe the allegations, which had percolating at a steady drip, frustrating county officials who felt helpless.
No beneficiaries have been arrested, but officials have said the investigation is ongoing.
Nazir also owns a convenience store in Ticonderoga, and formerly owned the Ti Food Mart before transferring the business.
He was accompanied by an attorney on Thursday, Kevin O’Brien, who said his client didn’t pose a flight risk because he voluntarily turned himself in from Maryland.
Details on Nazir’s state charges are unavailable, and the Essex County District Attorney was not immediately available for comment on Thursday afternoon.
REMANDED TO CUSTODY
Each of the six defendants facing federal charges were arraigned on Thursday before Hon. Judge Gary L. Favro.
Khalid Chadder, Qaiser Gondal and Armstrong join Nazir in being charged with conspiracy to commit health care fraud and offering and conspiring to pay bribes and kickbacks to Medicaid beneficiaries.
Waqas Nauman and Khurram Gondal have been charged with conspiracy to commit health care fraud alongside a series of state charges, including grand larceny and falsifying business records.
Detention hearings have been set for May 29.
Nauman and Khurram Gondal each indicated they had the financial resources to obtain counsel.
Bail for each was set at $2 million by Essex County Judge Richard Meyer earlier in the week.
Qaiser Gondal said he doesn’t know if his financial assets have been seized as part of the investigation.
“I don’t know what I have,” he said. “At the moment, I don’t know if my accounts have been seized.”
He said his family is arranging counsel.
Chadder, who was was remanded on $2 million cash bond in Essex County Court on Tuesday, hasn’t spoken with his family since he was taken into custody, and was unaware if someone was lining up legal help.
“I don’t speak with anybody yet,” he said, “so I don’t know.”
Armstrong, of Port Henry, was determined eligible for assigned counsel after telling Favro he earned between $300 and $400 each week driving a cab for Ti Taxi.
Assistant U.S. Attorney Michael Barnett declined to comment on if any assets had been seized, citing the ongoing investigation.