$8M Fraud Scheme: Westchester Man Billed Millions In False Transportation Claims

A Westchester man will spend years in prison after billing more than $8 million in false transportation service claims as part of a multi-million-dollar Medicaid fraud scheme. 

A Yonkers man will spend years in prison after participating in a multi-million dollar Medicaid fraud scheme.
A Yonkers man will spend years in prison after participating in a multi-million dollar Medicaid fraud scheme. Photo Credit: flickr/Jonathan Cutrer

Yonkers resident Julio Alvarado, age 63, was sentenced to 95 months in prison on Wednesday, March 29 for leading the scheme which ended up defrauding Medicaid out of millions of dollars, according to the US Attorney's Office for the Southern District of New York. 

According to federal officials, Alvarado was responsible for billing more than $8 million in fraudulent transportation services for Medicaid enrollees in the New York City area between August 2017 and February 2020 for KJ Transportation C Services Inc. 

During this time period, the company was paid more than $20 million for providing these transportation services, a large volume of which were fraudulent. 

In many cases of these false service claims, the Medicaid recipient was dead or out of the country when the company claimed that it was taking the person to their medical appointments. 

The company would also use the stolen identities of Medicaid recipients who had never heard of KJ and had never used their services. 

Additionally, employees of KJ would unlawfully bribe Medicaid recipients into providing their Medicaid information or falsely scheduling trips that they did not take, federal officials said. 

Alvarado, who pleaded guilty to one count of healthcare fraud, supervised more than a dozen participants in the scheme. 

In addition to his prison term, Alvarado will also serve three years of supervised release and will pay $8,507,115 in restitution, as well as forfeiting that amount. 

US Attorney Damian Williams said that Alvarado took advantage of a system meant to help the less fortunate. 

"He brazenly lined his own pockets with Medicaid funds meant to help the neediest New Yorkers. Today’s sentence makes clear that this type of criminal conduct will be prosecuted and punished to the full extent of the law," Williams said. 

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