The City of New York
Department of Investigation
ROSE GILL HEARN
COMMISSIONER
80 MAIDEN LANE Release #49-2008
NEW YORK, NY 10038 nyc.gov/html/doi
212-825-5900
FOR IMMEDIATE RELEASE CONTACT: DIANE STRUZZI
WEDNESDAY, JUNE 18, 2008 (212) 825-5931
JOINT INVESTIGATION BY DOI AND FEDERAL AUTHORITIES LEADS TO THE ARREST OF THREE
INDIVIDUALS ON CHARGES OF PARTICIPATING IN A MEDICAID CARD FRAUD SCHEME
--Today’s arrests are the result of an ongoing probe into Medicaid fraud--
IMAD HABIB, CLIFTON LEROY and ISAAC YEBOAH were arrested today as part of an ongoing
investigation by the New York City Department of Investigation (“DOI”) and federal authorities into a multi-
million dollar Medicaid fraud scheme that has already resulted in the conviction of 15 individuals, including
seven former employees of the New York City Human Resources Administration/Department of Social
Services (“HRA”). The individuals arrested today are not HRA employees.
HABIB, 45, of North Bergen, N.J.; LEROY, 41, of Manhattan, N.Y. and YEBOAH, 47, of Bronx, N.Y. are
each charged with Mail Fraud, Health Care Fraud and Conspiracy to Commit Mail and Health Care Fraud.
They were arraigned today in U.S. District Court for the Eastern District of New York. Each defendant, if
convicted, faces up to 20 years imprisonment on Mail Fraud; up to 10 years imprisonment on Health Care
Fraud and up to five years imprisonment on the conspiracy charge. The Office of Benton J. Campbell, United
States Attorney for the Eastern District of New York, is prosecuting the cases.
DOI Commissioner Rose Gill Hearn said, “Fraud on the Medicaid program diverts precious resources
from those who are eligible and need it most. DOI, along with the federal authorities, will continue to follow
the facts and ensure that those involved will be held accountable.”
The defendants are charged in a federal indictment with participating in a conspiracy to defraud the
Medicaid program and acting as middlemen between individuals who sought to purchase Medicaid cards and
a then-HRA employee and one other co-conspirator who arranged for the creation of those cards. The
indictment charges that in 2005 and 2006 the defendants obtained cash payments of between $300 and
$450 from the purchasers and provided information, such as the purchasers’ names, to those involved in
producing the cards. The fraudulently created cards enabled the purchasers to obtain Medicaid benefits,
according to the indictment.
HRA employees are supposed to open Medicaid accounts for needy clients through an application and
evaluation process. Eligibility is determined based on various factors, including the applicant’s annual
income, living expenses and outstanding medical bills.
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As part of this ongoing probe, 15 individuals – seven former HRA employees and eight other individuals
– have pleaded guilty to federal offenses in connection with the Medicaid fraud scheme that operated
principally out of HRA’s Central Medicaid Office on 34
th
Street in Manhattan. Seven of the individuals
convicted have already been sentenced to penalties ranging from probation to up to six years in prison. The
most recent sentencing took place on Tuesday, June 17, 2008, when former HRA employee Donna Dorr was
sentenced to five years in prison to be followed by three years of supervised release. She was also ordered
to pay $850,904 in restitution.
The convicted individuals participated in a lucrative scheme to sell Medicaid cards for cash fees of
several-hundred dollars per card. It is estimated that the Medicaid program lost more than $3.9 million as a
result of these defendants’ scheme.
Today’s arrests and the 15 convictions are the culmination of a joint investigation by DOI; Office of the
Inspector General for the U.S. Department of Health and Human Services, New York Regional Office; U.S.
Secret Service, New York Field Office; the Federal Bureau of Investigation’s Health Care Fraud Unit in New
York and the U.S. Postal Inspection Service.
Commissioner Gill Hearn thanked Benton J. Campbell, U.S. Attorney for the Eastern District of New
York, for prosecuting the cases. Commissioner Gill Hearn also thanked HRA Commissioner Robert Doar for
his and his staff’s assistance and cooperation.
Participating in the investigation for DOI was Chief Investigator Frank DeLisi from DOI’s Office of the
Inspector General for HRA, Supervising Chief Investigator Anthony DeLeo and Confidential Investigator
Carmelo Galarza, under the supervision of Inspector General Pat Russo.
Assistant U.S. Attorney Marisa Megur Seifan of the U.S. Attorney’s Office for the Eastern District of
New York is prosecuting the cases.
An indictment is merely an accusation. Defendants are presumed innocent until proven guilty.
DOI is one of the oldest law-enforcement agencies in the country. The agency investigates and refers for
prosecution City employees and contractors engaged in corrupt or fraudulent activities or unethical conduct.
Investigations may involve any agency, officer, elected official or employee of the City, as well as those who
do business with or receive benefits from the City.
Get the worms out of the Big Apple.
To report someone ripping off the city, call DOI at (212) 825-5959.
