Home Health Owner Sentenced to 5 Years in $7 Million Scheme

The owner of a New Jersey home health agency has been sentenced to five years in prison for her role in a $7 million scheme to defraud Medicaid.

In addition to the prison term administered Tuesday, Irina Krutoyarsky, 62, of Springfield, New Jersey, was sentenced to three years of supervised release and was ordered to pay $7 million in restitution, the U.S. Attorney’s Office for the District of New Jersey announced. A forfeiture order was also entered for $7 million, including forfeiture of her home in New Jersey and properties in New York City and Florida.

Krutoyarsky pleaded guilty last year to charges of conspiracy to commit health care fraud, bribery, conspiracy to commit money laundering and tax evasion. She owned Linden, New Jersey-based HHCH Health Care Inc., an agency that provided home health aides and health care services for New Jersey residents, including assistance with eating, dressing and grooming, according to documents filed in the case and statements made in court. Services completed by home health aides were subsidized under Medicaid.

As part of the scheme, Krutoyarsky and others submitted false documents to the New Jersey Board of Nursing, the state agency responsible for issuing home health aide certifications, claiming that prospective home health aides had attended and finished required training and testing, She then turned around and charged the aides hundreds of dollars for fraudulently obtaining their certifications, according to court records.

Krutoyarsky also billed Medicaid for services not actually rendered to patients, and several HHCH home health workers falsified records to show they had visited patients and provided health care services, when they were actually on vacations, had other jobs or were elsewhere in the state. The aides sometimes gave cash kickbacks to patients involved in the scheme, as well.

In an undercover investigation conducted by federal agents, a cooperating witness posing as a prospective home health aide was confronted about joining the scheme to defraud Medicaid. During the meeting, Krutoyarsky explained they would fraudulently bill Medicaid to get “free money [from the] government.” Her scheme defrauded Medicaid out of $7 million, which she transferred to aides and used to purchase property and pay for personal expenses.

Additionally, Krutoyarsky bribed a New Jersey Department of Labor employee, who was working undercover with federal agents. In 2010, the department requested certain HHCH records, and she realized they would reveal the Medicaid fraud scheme. She then paid the undercover employee $10,000 in cash to obstruct the department’s investigation. She went on to pay a second cash bribe of $15,000 to the employee the following year in relation to a second investigation.

Finally, between 2007 and 2011, Krutoyarsky bilked the IRS out of $907,150 in taxes owed to the United States, according to the documents. Home health aides were sent to patients ineligible for Medicaid, who wrote checks to HHCH. Such payments were claimed as business deductions on corporate tax returns.

Other Fraud News

Another person involved in a bribery scheme at a Skokie, Illinois-based home health care agency was convicted Tuesday following a federal investigation.

Jenette George, 62, of Chicago, was found guilty of two counts of accepting kickbacks for referring elderly patients to Rosner Home Healthcare, according to the U.S. attorney’s office. She was also convicted of conspiracy to defraud Medicare.

George was the 11th person convicted in the fraud involving Rosner. Others include the agency’s co-owners, physicians, nurses and marketers.

Written by Kourtney Liepelt