TRENTON - Attorney General
Paula T. Dow and Criminal Justice Director
Stephen J. Taylor announced that the owner
of a Totowa nursing home was sentenced today
for fraudulently obtaining payment from
the Medicaid Program. 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,
64, of Piscataway, was sentenced to 30 days
in county jail as a condition of three years
probation by Superior Court Judge Irvin
J. Snyder in Camden County. In addition,
Napenas 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.
The sentence was based on
Napenas’ Aug. 16 guilty plea to an
accusation charging him with third-degree
Medicaid fraud. 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
payments from Medicaid for personal expenses
unrelated to patient care.
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 represented the Office
of the Insurance Fraud Prosecutor at the
sentencing. 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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