For Immediate Release - July 20, 2010

Newton Man Arrested, Arraigned for Alleged Kickback Scheme with Employee at Regional Transportation Authority

Transit Authority Brokers Transportation Services In Pioneer Valley, North Central and South Central Massachusetts, And Greater Boston

LEOMINSTER - A Newton man was arrested and arraigned today on charges he paid kickbacks to an employee at a quasi-state agency in order to get the employee to divert transportation services paid for by the state's Medicaid program to one of his five transportation companies, Attorney General Martha Coakley announced today.

According to authorities, Alex Shrayber, 55, owns five separate transportation businesses that contracted work with the Montachusett Regional Transit Authority (MART), a quasi-state agency that brokers transportation services to vendors in Pioneer Valley, North Central Massachusetts, South Central Massachusetts and Greater Boston. MART provides transportation to recipients of MassHealth, a state Medicaid program responsible for providing health insurance for the economically disadvantaged.

"We allege that the defendant executed a kickback scheme with employees of this regional transportation agency to funnel business to him," AG Coakley said. "The authority's low-bid system is designed to ensure that Medicaid is paying the lowest price available for these much needed services. This scheme resulted in higher costs for taxpayers and our Medicaid program, and it compromised the public integrity of the bidding process."

An investigation conducted by authorities found that Shrayber made cash payments in increments of $300 to $500 per month to a MART employee between spring 2007 and April 2010. Authorities allege that Shrayber had an ongoing arrangement with that employee which involved monthly payments in return for bypassing the authority's "low-bid system" and diverting transportation assignments for MassHealth recipients from other companies to one of Shrayber's five transportation businesses. Payments for those rides were funded by MassHealth. Administrators at MART have cooperated with this ongoing investigation.

Shrayber was arrested today at his home in Newton, and arraigned in Leominster District Court on charges of one count each of Medicaid Fraud Kickback and Bribery. Clerk Raymond J. Salmon ordered that Shrayber be held on $50,000 cash bail. At the request of the defendant, the matter was set for further hearing on bail conditions at 11 a.m. tomorrow in Leominster District Court.

Montachusett Regional Transit Authority is one of the Regional Transit Authorities (RTAs) run by the Executive office of Health and Human Services, which provides non-emergency medical transportation services to recipients of MassHealth. The RTA acts as a broker, accepting requests for transportation from MassHealth members and matching those requests with transportation providers based on lowest price, availability and vendor capacity. Assuming that the vendor has availability and capacity, the RTA must match requests for transportation to the provider with the lowest bid. This is referred to as the "low-bid system."

Shrayber's businesses include: Delta Community Transportation, Inc.; Women in Transit, Inc.; East-West Transportation, Inc.; IBF Transportation, Inc.; New England Trans Services, Inc.

Assistant Attorneys General Melissa Celli and George Zachos, of Attorney General Coakley's Medicaid Fraud Division, are the prosecutors assigned to this case. The case is being investigated by Kevin Ready and Dean Bates, both investigators with the Attorney General Coakley's Medicaid Fraud Division, along with members of the Massachusetts State Police assigned to the Attorney General's Office. Both the Massachusetts Medicaid Program and the Department of Public Health assisted in this investigation.

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