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N.Y. Cavalcade of Corruption Continues

MANHATTAN (CN) - New York's seemingly endless cavalcade of corruption continues, with the Young Adult Institute dba National Institute for People with Disabilities Network and five of its current and former officers ordered to pay $18 million in civil damages under the False Claims Act. YAI, "the largest operator of residential facilities and other programs for developmentally disabled individuals in New York State," submitted false claims to Medicaid, federal prosecutors said.

U.S. District Judge Richard Berman approved the $18 million settlement on Tuesday.

The U.S. Attorney's Office said in a statement announcing the settlement: "From 1999 through 2010, YAI repeatedly submitted to OPWDD [the New York Office for People with Developmental Disabilities] consolidated fiscal reports ('CFRs') that falsely inflated the costs of certain residential facilities in order for YAI to obtain additional Medicaid funding to which it was not entitled. The complaint alleges that, among other things, (i) YAI improperly shifted the costs of certain employees' salaries and fringe benefits to facilities where they did not work; (ii) YAI improperly categorized its senior program administrative staff and other unlicensed or uncertified persons as clinical social workers; and (iii) YAI improperly categorized its fund-raising staff as administrative employees. The complaint further alleges that these shifts and misallocations were in violation of the instructions for submitting CFRs and appeals, and that they resulted in YAI receiving inflated Medicaid reimbursements."

The defendants will pay $7.2 million to the United States and the rest to New York - though YAI does not admit that it did anything wrong.

Defendants in the stipulation and settlement, in addition to the YAI and its dba, are Joel M. Levy, Philip H. Levy and Karen Wegmann.

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