Newton Man Pleads Guilty in Medicaid Kickback Scheme

A Newton man pleaded guilty yesterday to multiple charges tied to a Medicaid kickback scheme where he allegedly paid a regional transit authority to divert transportation services to one of his transportation businesses.

According to a press release issued by the attorney general's office, Alexander Shrayber pleaded guilty to two counts of Medicaid kickbacks, and four counts of corrupt gifts, offers or promises to influence officials.

Investigators with the attorney general's office allege that Shrayber made cash payments to the Montachusett Regional Transit Authority (MART) in exchange for avoiding the MART "low-bid system" and having transportation services for the state's Medicaid program diverted from other companies to one of Shrayber's transportation companies, the press release said. 

“This defendant pleaded guilty to orchestrating a kickback scheme that resulted in higher costs for taxpayers and compromised the integrity of the bidding process,” Attorney General Martha Coakley said in the press release. “The low-bid system is designed to ensure that Medicaid is paying the lowest price available for these much needed services and those who corrupt the bidding process will be held accountable.”

According to the press release, Shrayber owned five separate transportation businesses that worked with MART.

Shrayber is set to appear in Worcester Superior Court on August 16 for a restitution and sentencing hearing, the press release said. 

More details on the case are incuded in the attorney general's press release below:

WORCESTER — A Newton man pleaded guilty today to charges of paying kickbacks to employees at a regional transit authority in order to divert transportation services paid by the state’s Medicaid program to one of his companies, Attorney General Martha Coakley announced today. 

Alexander Shrayber of Newton pleaded guilty to charges of Medicaid Kickbacks (2 counts) and Corrupt Gifts, Offers or Promises to Influence Officials Acts (4 counts). A restitution and sentencing hearing has been scheduled on August 16 at 11 a.m. in Worcester Superior Court.

“This defendant pleaded guilty to orchestrating a kickback scheme that resulted in higher costs for taxpayers and compromised the integrity of the bidding process,” AG Coakley said. “The low-bid system is designed to ensure that Medicaid is paying the lowest price available for these much needed services and those who corrupt the bidding process will be held accountable.”

According to investigators with the AG’s Office, Shrayber made cash payments to Montachusett Regional Transit Authority (MART) employees between January 2007 and April 2010. Shrayber had an ongoing arrangement with these employees that involved monthly payments in return for bypassing the authority’s “low-bid system” and diverting transportation assignments for MassHealth recipients from other companies to one of Shrayber’s five transportation businesses. Payments for those rides were funded by MassHealth. Administrators at MART have cooperated with this ongoing investigation. 

Investigators discovered that Shrayber owned five separate transportation businesses that contracted work with MART, a public agency that brokers transportation services to vendors in Pioneer Valley, North Central Massachusetts, South Central Massachusetts and Greater Boston. MART provides transportation to recipients of MassHealth, a state Medicaid program responsible for providing health insurance for the economically disadvantaged.

Shrayber was arrested on July 20, 2010 without incident.  He was subsequently arraigned in Leominster District Court on the charge of Medicaid Fraud Kickbacks (1 count) and Bribery (1 count) in connection to the same alleged scheme. In August, Shrayber was arraigned in Fitchburg District Court on charges of Medicaid Fraud Kickbacks (1 count) and Bribery (1 count).

Three additional employees of the MART also face charges of accepting kickbacks and colluding with Shrayber. A Grand Jury returned the indictments on September 24, 2010. All of the defendants were arraigned in October in Worcester Superior Court. 

Montachusett Regional Transit Authority is one of the Regional Transit Authorities (RTAs) which provides non-emergency medical transportation services to recipients of MassHealth, the Commonwealth’s Medicaid program. The RTA acts as a broker, accepting requests for transportation from MassHealth members and matching those requests with transportation providers based on lowest price, availability and vendor capacity. Assuming that the vendor has availability and capacity, the RTA must match requests for transportation to the provider with the lowest bid. This is referred to as the “low-bid system.”

Shrayber’s businesses included: Delta Community Transportation, Inc.; Women in Transit, Inc.; East-West Transportation, Inc.; IBF Transportation, Inc.; New England Trans Services, Inc.

Assistant Attorney Generals Toby Unger and George Zachos, of Attorney General Coakley’s Medicaid Fraud Division, are the prosecutors assigned to this case. The case is being investigated by Kevin Ready and Dean Bates, investigators with AG Coakley’s Medicaid Fraud Division, along with members of the Massachusetts State Police assigned to the Attorney General’s Office. The Executive Office of Health and Human Services assisted in this investigation.