The Poughkeepsie owner of a nonprofit business that helped people with disabilities has admitted to ripping off Medicaid for $2.4 million and has agreed to pay back $220,000.


Henry Alfonso Coley signed stipulations with the federal government and the state attorney general agreeing to pay about 9 cents for every Medicaid dollar he diverted for 10 years from Maranatha Human Services Inc., according to documents filed Nov. 16 in U.S. District Court in White Plains.

“The settlement amount represents the amount the United States is willing to accept,” the federal stipulation states, “due solely to defendant’s financial condition.”

The whistleblower who revealed the schemes, Maranatha’s former chief operating officer, Stephanie Munford, was awarded $19,360.

Coley founded Maranatha in 1988 and ran it until he resigned this past July 31. The business was organized as a not-for-profit corporation to provide services to people with developmental disabilities, with offices in Poughkeepsie and Richmond Hill, Queens. It was funded almost entirely by Medicaid.

Maranatha filed annual fiscal reports, signed by Coley, that separated allowable Medicaid expenditures from nonallowable expenditures. The reports were used to determine Medicaid reimbursements.

From 2010 through 2019, Coley admitted, he submitted false claims for Medicaid payments.

Three years ago, Munford filed a whistleblower complaint claiming that Coley was using Medicaid funds to pay for pet projects, low-show and no-show jobs, consulting contracts awarded to himself and family and friends, and for personal expenses.

Her complaint was sealed and the case was kept secret until this month.

According to the stipulations, Coley used millions of dollars from Medicaid to enrich himself, his family and his friends, and to support for-profit ventures he owned or controlled.

Medicaid money supported Mighty Mite Distributors Inc., an online home goods store and later a wellness hub founded in 2014; Wellness 365 Inc. for promoting wellness, founded in 2015; Caregiver Compass LLC, an online tool for choosing caregivers, founded in 2018; and Caregivers Connect LLC, to promote nonmedical services for senior citizens, founded in 2019.

Coley told his board of directors that the plan was always for “Maranatha to use government funds as a launching pad to create private enterprises that would enable it to not be dependent on government,” the stipulations quote him as saying, while at the same time fulfilling its mission.

He paid employees, contractors and family members to work on the non-Medicaid ventures, including more than $300,000 to his daughter.

Coley was paid more than $2 million in salary and benefits since 2010, claiming that the full amounts were allowable Medicaid costs even though he devoted much of his time to the private ventures. Since 2014, he has received more than $225,000 in annual compensation, while the state allowed no more than $199,000.

Maranatha had about $9.5 million in revenues, according to its 2019 nonprofit tax report, including more than $8.4 million from Medicaid.

Coley consented to a $2.4 million judgment in favor of the United States. The federal government agreed to accept $88,000, and the state government $132,000 as full satisfaction, to be paid by next September.

The state barred Coley from working for or even volunteering for any entity that receives Medicaid funds. He was permanently barred from serving as an officer or soliciting contributions for any New York charities.

He agreed to not make any public statement that contradicts the admitted conduct or to suggest that his conduct was not wrong.

Munford signed a stipulation in which she consented that the $19,360 whistleblower payment is fair and reasonable.

Whistleblowers can be paid from 15% to 30% of the recovered funds. In this case, Munford was awarded 22%. At that rate, if Coley had agreed to pay back the full $2.4 million, she could have received $528,000.

The stipulations were approved by U.S. District Judge Kenneth Karas and filed Nov. 16 in U.S. District Court, White Plains.

State attorney Ting Ting Tam represented the attorney general. Assistant prosecutor Jacob Lillywhite represented the United States. Albany attorney Christopher V. Fenlon represented Coley. Attorney Heidi Wendel represented Munford.

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Poughkeepsie Medicaid fraudster agrees to 9-cents on the dollar payback – Westfair Online