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AG: Nesconset family turned Medicaid into ‘bank account’

A Nesconset couple and their daughter reaped millions of dollars in Medicaid kickbacks by requiring patients to attend their treatment programs or face eviction, the state attorney general’s office said yesterday.

This scheme violated patients’ rights — and various laws — by preventing them from freely choosing medical providers, Attorney General Eric T. Schneiderman said in a statement.

Robert Corrado, 56, executive director of Interline Employee Assistance Program Inc., offered housing to homeless individuals at below-market rents — as long as they were outpatients at Interline’s addiction programs, Schneiderman said.

Corrado and Queens-based Interline were indicted on felonies, including grand larceny, in an indictment unsealed Monday, the attorney general said.

A daughter, Kristina Corrado, 32, who managed the “Care House” homes in Queens and Brooklyn from Interline offices, was charged with a felony, along with Robert Corrado and Interline, for violating anti-kickback laws, Schneiderman said.

The wife, Kim Corrado, was not criminally charged.

She was named in a civil complaint, along with Robert and Kristina Corrado and Interline for obtaining “substantial financial benefits from the fraud,” Schneiderman said.

The wife is listed in state filings as Interline’s sole owner, he said.

Schneiderman in a statement said Medicaid cannot be turned into a “bank account for criminals.”

“We allege that the defendants engaged in a systematic, ongoing scheme to exploit those struggling with homelessness and substance abuse in order to line their own pockets,” he said.

Robert Corrado and Interline fraudulently claimed at least $2.3 million from Medicaid, officials said.

Richard Harrow, an Albany-based lawyer, said he represented Robert and Kristina Corrado and the firm at their arraignment on Monday.

“The Corrados and the company will vigorously defend these charges,” Harrow said. “This is a Department of Health regulatory and civil matter that should not be pursued in the criminal courts, and finally, a thorough investigation will show that all the services were rendered.”

Harrow added: “And actually, there was a waiting list to get into the Care Houses.”

Kristina Corrado tracked whether Care House residents were attending Interline outpatient programs, the attorney general’s office said. This information, and the patients’ progress, was “regularly shared” by Interline staff with Care House workers, Schneiderman said.

Residents who did not adhere to Interline’s “mandatory treatment requirements” were evicted, he said. “The overlap in staff and operations between Interline’s outpatient treatment program and its Care Houses created a de facto residential treatment program, that neither entity is licensed to operate,” the attorney general said.

Medicaid paid the husband and Interline for treatment claims that were based on the kickbacks, Schneiderman said.

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