Oneonta-based Company Principals Arrested for Medicaid Fraud

By WRILEY NELSON
ONEONTA

Philip Mtui, Mbaga Kaiza and Tony Taylor, principals at the Oneonta-based Phinaliz Communications LLC, were arrested in connection with a massive Medicaid fraud scheme on Thursday, August 24. State Comptroller Thomas P. DiNapoli announced the arrest on Monday, August 28 on behalf of state, local and federal investigating agencies. The defendants are accused of stealing over $1 million from Medicaid by billing for fake transportation services, duplicating and inflating costs, and paying kickbacks to Medicaid recipients.

Phinaliz Communications is enrolled in Medicaid as a participating transportation provider. It is owned by Mtui, 46, of Mechanicville. Kaiza, 47, is operational manager and is also a New York State resident. Taylor, 42, is a manager, dispatcher and driver. Medicaid patients may use registered transportation services to access legitimate medical appointments, with costs billed to Medicaid by the service provider. A four-year investigation by state, local and federal authorities revealed that Mtui and Kaiza defrauded Medicaid by claiming payments for rides that never occurred and by charging double, triple or quadruple the approved rates for rides that did occur.

Investigators found that Medicaid enrollees were paid kickbacks to use Phinaliz services and to provide their personal information to facilitate the alleged crimes. The multi-year investigation involved extensive surveillance and the execution of a search warrant on company headquarters. According to a release, this is the first round of arrests in an ongoing investigation. Another Phinaliz LLC has been registered in East Greenbush for the past 10 years, and Mtui’s LinkedIn profile says he is a University of Albany graduate and is based in the East Greenbush area.

Mtui and Kaiza were arraigned in Oneonta City Court on one count of grand larceny in the first degree, theft of over $1 million. They were both held on $250,000.00 bail. Taylor was arrested on one count of conspiracy in the sixth degree, a charge related to the kickback scheme, and will be arraigned on Tuesday, September 19. The Otsego County Department of Probation, the Otsego County Department of Social Services, the New York State Department of Motor Vehicles, the Oneida County Sheriff’s Office, the Saratoga County Sheriff’s Office and the East Greenbush Police Department assisted in the investigation.

“The defendants allegedly engaged in a systematic scam to defraud the Medicaid program of millions of dollars,” said DiNapoli. “Medicaid fraud impacts us all and diverts money from those truly in need. Thanks to the partnership between my office, Otsego County District Attorney [John] Muehl, Otsego County Sheriff [Richard] Devlin, Oneonta Chief of Police [Christopher] Witzenburg and the U.S. Department of Health and Human Services-Office of Inspector General, this fraud was uncovered and now these defendants will be held accountable.”

“In initiating this investigation, we immediately realized its impact and importance and are therefore appreciative of the support we received,” added Devlin. “We commend our local, state, law enforcement, and administrative partners, especially Paul White of Viapath Technologies, for their tireless dedication to a comprehensive and thorough investigation. Collectively, this effort identified, disrupted, and dismantled criminal activity that affected every citizen and taxpayer of New York State.”

“The disruption of this criminal behavior and associated kickbacks for fraudulent charges has an impact beyond theft,” said Witzenburg. “The kickbacks were undoubtedly used to fuel substance abuse issues for vulnerable people, resulting in a host of other complications in our community. It is not just an example of theft and fraud from the public, but the exploitation of people for profit.”