For years, Nassau County officials paid Daniel Mairzadeh and his wife Medicaid benefits, believing that he was a contractor earning between $405 and $633 a week for a development company called Fundstone Developers LLC, prosecutors said.
In fact, Mairzadeh was Fundstone's owner, who between his two homes and corporate interests was worth more than $3 million, prosecutors said.
Wednesday Mairzadeh, who prosectors say is known around the county as "Danny Fundstone," and his wife, Dalia, a real estate agent, were arrested and charged with stealing $33,553 in undeserved Medicaid payments between April 2004 and April 2009. If convicted, they could each face 21/3 to 7 years in prison.
"These two defendants stole from each and every taxpayer in this county and abused a system designed to help those who are truly in need," said Nassau District Attorney Kathleen Rice in a statement Wednesday.
Prosecutors also said that Mairzadeh's company built more than a dozen homes that were found to violate town building codes during a Nassau district attorney's investigation of the North Hempstead building department in 2008.
Three town building department officials were convicted of bribery and coercion in that investigation, but Mairzadeh and his company were never criminally charged, said Nassau prosecutor Karen Bennett, who investigated the North Hempstead building department as the county's deputy bureau chief of public corruption.
Daniel and Dalia Mairzadeh, both 45, of Old Westbury, each pleaded not guilty Wednesday in First District Court in Hempstead to charges of third-degree grand larceny, third-degree welfare fraud and first-degree offering a false instrument for filing.
Their lawyer, Sean Sabeti, of Smithtown, could not be reached for comment.
Prosecutors said the couple "intentionally underreported their personal income" to Social Services to qualify for Medicaid to get undeserved payments for themselves and their three children.
Daniel Mairzadeh submitted fake receipts to make it look like he was renting a home he actually owned, and his wife did not report her income at all, prosecutors said.
The couple bought a $2.159-million home in 2006 and owned a second home that they purchased in 2005 for $990,000, prosecutors said.