For Immediate Release - November 29, 2012

Newton Man to Pay $700,000 for Medicaid Kickback Scheme

Transportation Company Owner Receives Suspended Sentence in the House of Correction

WORCESTER — A Newton man was ordered to pay $700,000 and received a suspended sentence of two and a half years in the House of Correction for paying kickbacks to employees at a regional transit authority in order to divert transportation services paid for by the state’s Medicaid program to five of his companies, Attorney General Martha Coakley announced today.

Alexander Shrayber, 57, of Newton pleaded guilty in June to charges of Medicaid Kickbacks (2 counts) and Corrupt Gifts, Offers or Promises to Influence Officials Acts (4 counts).

At the hearing today in Worcester Superior Court, Shrayber was sentenced by Judge James R. Lemire to two and a half years in the House of Correction, suspended for five years, with  five years of probation. Shrayber was also ordered to pay $200,000 in fines and $500,000 in restitution to the Massachusetts Medicaid Program.

“This defendant, through an elaborate kickback scheme, stole directly from taxpayers and compromised the integrity of the public bidding process,” AG Coakley said. “Our office will continue to aggressively root out corruption and fraud in the Medicaid system which provides critical services to our most vulnerable population.”

According to investigators with the AG’s Office, Shrayber made cash payments to Montachusett Regional Transit Authority (MART) employees between January 2007 and April 2010. Shrayber had an ongoing arrangement with these employees that 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 fully cooperated with this investigation. 

Investigators discovered that Shrayber owned five separate transportation businesses that contracted work with MART, a public 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.

Shrayber was arrested on July 20, 2010 without incident.  He was subsequently arraigned in Leominster District Court on charges of receiving Medicaid Kickbacks. In September 2010, Shrayber was indicted by a Worcester Grand Jury on charges of Medicaid Kickbacks (2 counts), and Corrupt Gifts, Offers or Promises to Influence Officials Acts (4 counts), and arraigned in Worcester Superior Court in October 2012.

Montachusett Regional Transit Authority is one of the Regional Transit Authorities (RTAs) which provides non-emergency medical transportation services to recipients of MassHealth, the Commonwealth’s Medicaid program. 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 included: Delta Community Transportation, Inc.; Women in Transit, Inc.; East-West Transportation, Inc.; IBF Transportation, Inc.; New England Trans Services, Inc.

Assistant Attorney Generals Toby Unger and George Zachos, of Attorney General Coakley’s Medicaid Fraud Division, were the prosecutors assigned to this case. The case was investigated by Kevin Ready and Dean Bates, investigators with AG Coakley’s Medicaid Fraud Division, along with members of the Massachusetts State Police assigned to the Attorney General’s Office. The Executive Office of Health and Human Services assisted in this investigation. 

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