Scores of Amtrak Employees Accused of Multi-Year Insurance Fraud Scam

Amtrak investigators say they have broken up a brazen health care fraud scheme involving more than 100 employees and more than $12 million in ill-gotten gains. One former employee involved in the case admitted to physically threatening to injure a health care provider unless he was paid several thousand dollars.The employees implicated in the scheme accepted cash kickbacks in exchange for the use of their insurance information and, in some cases, that of their dependents. Health care providers involved in the scheme would then file fraudulent claims. Amtrak’s health care plan was eventually billed more than $16 million and paid out more than $12 million.Amtrak’s Office of Inspector General says the years-long investigation began after unusual billing patterns were identified with three New York health care providers who shared a high number of Amtrak employees as patients.Amtrak’s inspector general, Kevin Winters, called the case “the largest employee conspiracy our office has ever investigated.”As part of the investigation, an undercover agent posing as an Amtrak employee met with a New York City acupuncturist, Punson Figueroa. She instructed the agent to sign his name approximately 30 times for services received, without dating the signatures.Investigators say Figueroa then submitted fraudulent claims to Amtrak’s health care plan, falsely indicating that the agent had visited providers at least seven times in a single month for acupuncture and physical therapy.The agent went back to the acupuncturist’s office and she allegedly handed him an envelope containing $1,000. Ms. Figueroa then continued to use the agent’s insurance information to submit dozens of fraudulent claims to Amtrak’s health care plan. She has pleaded guilty to fraud and was ordered to pay more than $9 million in restitution.Investigators say 119 Amtrak employees were implicated in the conspiracy. Of them, 28 have retired or resigned because of the investigation and 30 left the company for other reasons. A dozen employees have been criminally charged and seven have pleaded guilty, according to the report. Disciplinary action is pending for the 61 remaining active employees.“The sheer volume of employees who cavalierly participated in this scheme to steal Amtrak’s funds suggests not only a serious lapse in basic ethics, but a troubling workforce culture, at least in the Northeast region, in which blatant criminal behavior was somehow normalized,” Mr. Winters said.Investigators say a former employee, Devon Burt of Pennsylvania, worked with Hallum Gelzer of New Jersey to recruit Amtrak employees to participate in the scheme. They separately pleaded guilty to charges of conspiracy to commit health care fraud and conspiracy to communicate extortionate threats.As part of their plea agreements, Burt agreed to pay $959,072 in restitution and Gelzer agreed to pay about $1.66 million. They also admitted to threatening to injure a health care provider unless Gelzer was paid several thousand dollars. Six other employees have also pleaded guilty to health care fraud conspiracy charges.Muhammed Mirza, a medical doctor from New Jersey, was sentenced to 26 months in prison and was ordered to pay restitution of $1.37 million. Michael DeNicola, a New York podiatrist, has pleaded guilty to conspiracy to commit health care fraud, distribution of a controlled substance, and unlawful possession of a firearm charges and is awaiting sentencing.A medical biller who worked for Figueroa pleaded guilty to conspiracy to commit health care fraud and is also awaiting sentencing.Amtrak was warned as far back as 2018 that it needed to strengthen controls to better identify fraudulent medical claims sooner. A recent inspector general report also identified health care fraud as one of four high-risk areas Amtrak could face and identified several actions Amtrak could take to reduce the risk, including educating employees to better recognize and report fraud indicators.

Scores of Amtrak Employees Accused of Multi-Year Insurance Fraud Scam

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