TRENTON
- Attorney General Paula T. Dow and Criminal
Justice Director Stephen J. Taylor announced
that the owner of a Totowa nursing home
pleaded guilty today to Medicaid fraud after
a state investigation revealed that he billed
the Medicaid program for $302,877 in improper
and unsubstantiated costs, including more
than $100,000 in personal expenses.
According
to Acting Insurance Fraud Prosecutor Riza
Dagli, Victor Napenas, 63, of Piscataway,
pleaded guilty to an accusation charging
him with third-degree Medicaid fraud before
Superior Court Judge Irvin J. Snyder in
Camden County. Napenas owned the Valley
Rest Nursing Home on Bogart Street in Totowa,
which closed in 2007. In pleading guilty,
he admitted that he fraudulently obtained
payment from Medicaid for personal expenses
unrelated to patient care.
The
state will recommend that Napenas be sentenced
to 90 days in jail as a condition of three
years of probation. He must pay $302,877
in restitution to the Medicaid program,
$45,263 in penalties, and $31,859 in provider
taxes owed to the state. He will be prohibited
from acting as a Medicaid provider for eight
years. Judge Snyder scheduled sentencing
for Oct. 8.
The
investigation began when Department of Health
and Senior Services (DHSS) surveyors noted
severe deficiencies in the care delivered
to residents at Valley Rest, which resulted
in the owners voluntarily closing the facility
in 2007. In the process, DHSS ordered a
financial audit, which showed many irregularities
on the facility's 2005 cost report submitted
to Medicaid.
DHSS
referred the matter to the Division of Criminal
Justice. The Office of the Insurance Fraud
Prosecutor’s Medicaid Fraud Control
Unit worked closely on this investigation
with DHSS, in particular the Department’s
Director of Nursing Facility Rate Setting.
The
investigation revealed that the cost report
included $302,877 in improper charges, including
personal expenses and other amounts Napenas
could not document or prove were spent.
Napenas
issued business credit cards to himself
and his wife through the nursing home, which
they used for personal purchases, including
trips to the Philippines, dance lessons
and large family dinners. Napenas had those
credit card charges and other personal expenses
totaling more than $100,000 inserted into
the cost report, resulting in reimbursement
from Medicaid.
“This
nursing home owner treated the facility’s
Medicaid cost report like his own blank
check, fraudulently obtaining reimbursement
for over $100,000 in personal expenses in
a single year,” said Acting Insurance
Fraud Prosecutor Dagli. “Fortunately,
the Department of Health and Senior Services
audited the facility and detected irregularities
in the cost report. Our Medicaid Fraud Control
Unit will continue to work with the Department
of Health and Senior Services to uncover
and prosecute fraud and abuse involving
Medicaid providers.”
Deputy
Attorney General Linda A. Rinaldi took the
guilty plea. The case was prosecuted by
Deputy Attorney General Rinaldi and Deputy
Attorney General Erik Daab, Director of
the Medicaid Fraud Control Unit. Sgt. Frederick
Weidman, Auditor Kim Geis and Deputy Attorney
General Rinaldi conducted the investigation
for the Office of the Insurance Fraud Prosecutor.
Attorney
General Dow thanked DHSS Director of Rate
Setting Devon Graf for the referral and
the extensive assistance of his unit throughout
the investigation. She also thanked Supervising
Investigator Joe Marty of the Division of
Taxation for his assistance.
The
Medicaid program, which is funded by the
state and federal governments, provides
health care services and prescription drugs
to persons who may not otherwise be able
to afford them. The State of New Jersey
administers the Medicaid program through
the Division of Medical Assistance and Health
Services in the Department of Human Services
and through the Office of the Insurance
Fraud Prosecutor’s Medicaid Fraud
Control Unit, which investigates both criminal
and civil Medicaid fraud and abuse in that
program.
Anyone
with information about fraud or abuse involving
the Medicaid program or Medicaid providers
is urged to call the Medicaid Fraud Control
Unit toll free at 1-877-55-FRAUD
or visit www.NJInsuranceFraud.org.
All information received will remain confidential.
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