New York Medicaid Fraud: AG James Nets $13M from Fake Medical Transportation Billing

by Anna D’Agostino and Faaria Zubair

On June 30, 2025, New York Attorney General (NYAG) Letitia James announced that her office successfully investigated 25 transportation companies for billing Medicaid for fraudulent trips, such as nonexistent rides, inflated mileage, and illegal patient kickbacks, securing over $13 million in settlements.

How Transportation Companies Committed Billing Fraud

Millions of New Yorkers rely on Medicaid and Medicaid-covered services, including transportation to and from healthcare facilities. Unfortunately, some companies have taken advantage of this system and exploited New Yorkers’ healthcare needs for their own personal gain.

The Medicaid fraud in NYAG James’ enforcement announcement was carried out by companies authorized to transport Medicaid patients to and from healthcare facilities.  While transportation providers are allowed to bill Medicaid for services actually rendered, including a base rate, mileage, and tolls, those services must be conducted appropriately and recorded accurately.

According to the NYAG Office’s Medicaid Fraud Control Unit (MFCU), the companies named in the press release fraudulently billed Medicaid for extra mileage, fake or inflated tolls, trips never taken, and trips conducted by unlicensed drivers, thereby unlawfully receiving millions of Medicaid dollars that should have gone toward legitimate patient care.

The following 16 transportation companies agreed to settlements with the NYAG:

1. American Base No. 1: Paid $4.78M to settle civil and criminal charges for billing Medicaid for inflated trip miles, impossible amounts of daily service, trips never taken, and for paying kickbacks to patients to request rides from American Base No. 1.
2. Agape Luxury Corp: Paid $2.45M for inflating the mileage it reported on Medicaid-reimbursed trips.
3. NBT Transportation: Paid $1.52M for billing fake toll expenses.
4. Angel Medical Transportation: Paid $1.1M for billing nonexistent trips and using improperly licensed drivers.
5. Lakeview Global: Paid $684K for trips never taken and trips with false addresses leading to overpayment.
6. U.S. Trips and Trade: Paid $500K for submitting inflated and fake tolls.
7. Buzz Transport: Paid $364K for billing fake tolls.
8. JD Express: Paid $331K for fake tolls and using unlicensed, improperly licensed, or suspended drivers.
9. Vic and Bay Care Service: Paid $250K for billing trips that did not occur.
10. Divine Hearts Transportation: Paid $227K for fictitious trips and false address billing.
11. Equaltrans: Paid $225K for billing trips that did not occur as claimed.
12. KFH Medicaid Transportation: Paid $144K for submitting fake rides.
13. Shamrock Transportation: Paid $148K for billing inflated and fake tolls.
14. Interstate Luxury Limousines: Paid $142K for trips that did not occur as described in the claims.
15. Lak Sam: Paid $120K for fake rides and tolls.
16. A Nice Ride: Paid $28K for billing inflated tolls and services not provided.

In addition to these 16 companies, NYAG James has filed lawsuits against seven transportation companies that failed to comply with cease-and-desist letters regarding the fraudulent practices sent earlier this year.  Three individuals have also been charged or convicted in connection with the schemes.

Kickbacks and Exploiting Vulnerable Individuals

Several transportation companies not only defrauded Medicaid but also exploited the very individuals the program was designed to protect, including the elderly, low-income individuals, and people struggling with substance abuse. In many cases, these companies paid kickbacks to vulnerable Medicaid recipients, bribing patients to request rides from their companies, even, as was the case with American Base No. 1, rides they did not need.  This practice results in hundreds of thousands of dollars in false Medicaid payments.

Consequences of Fraudulent Medicaid Billing

The federal False Claims Act (FCA) and the New York False Claims Act establish civil liability for individuals or entities that defraud government programs, like Medicaid, by overcharging or providing false or low-quality goods and services. Submitting false claims to Medicaid can lead to serious penalties resulting in fines of up to three times the amount of the program’s losses, plus a civil statutory penalty between $14,308 and $28,619 for every false claim submitted. As a “claim” refers to each time a service or item is billed to Medicaid, these penalties can add up to significant damages.

Although the FCA comes into play when someone “knowingly” submits false claims, it is important to note that a specific intent to defraud is not required under the law. The term “knowing” includes not just actual knowledge but also situations where someone acted in deliberate ignorance or with reckless disregard for whether information was true or false. Anyone who submits false claims under these circumstances could face criminal fines of up to $250,000 and up to five years in prison. Violating the FCA can also lead to exclusion from participation in all Federal Healthcare Programs.

The kickback schemes described here also violate the Anti-kickback Statute (AKS), which carries similar penalties of fines, jail terms, and exclusion from participation in the Federal healthcare programs.

The Role of Whistleblowers in Medicaid Fraud

The FCA not only helps recover taxpayer dollars, but, more importantly, it makes sure that government programs like Medicaid are properly used to help the people who rely on them. Whistleblowers play a huge role in this process, since they are often the ones who first report fraud or misconduct to the government.

Because of their essential role in discovering fraud, the government offers strong incentives and protections to encourage whistleblowers to speak up. In recognition of their efforts, whistleblowers can receive anywhere from 15 to 30 percent of the funds the government recovers, and they are also protected from retaliation for coming forward about the wrongdoing they have witnessed.

How to Report Healthcare Fraud Safely

If you believe you have witnessed healthcare fraud, consider taking the following steps to protect yourself and your claim:

Document the Evidence: Gather everything you believe is relevant to your claim

Maintain confidentiality: Avoid discussing issues with others prior to receiving legal counsel

Use Secure Reporting Channels: For Medicaid Fraud, report to the U.S. Department of Health and Human Services (HHS)

Consult a whistleblower Attorney: An attorney can help you understand the legal process and move forward with your claim

How Miller Shah Can Help

Medicaid overbilling is an all-too-common form of fraud which deprives essential government programs of taxpayer money meant to support legitimate patient care.

Miller Shah is dedicated to combating healthcare fraud through the qui tam provisions of the FCA and its state law counterparts. We have extensive experience representing whistleblowers in qui tam actions and have successfully litigated these claims in state and federal courts.

For information about your rights or how Miller Shah handles healthcare fraud matters, contact us online or call (866) 540-5505 to arrange a consultation.