New York drivers are accused of bilking up to $196 million from a badly managed Medicaid transportation program.
A federal audit by the Department of Health and Human Services found the shocking amount had been paid to transport companies enrolled in the Non-Emergency Medical Transportation (NEMT) program, but rides “did not meet or may not have met Medicaid requirements.”
The 2022 report claimed almost half of $445 million in taxpayer money paid out in 2018 and 2019 in New York City was mismanaged. This included rides that were not properly documented, drivers who were not properly licensed, rides that weren’t pre-authorized by a medical practitioner and services which were billed but never happened, according to the report.
The federal government demanded New York State immediately pay back $84 million of the money and put a further $112 million under review.
In one shocking example, the owner and two employees of Queens-based Purple Heart Transportation were indicted by the state Attorney General for allegedly stealing $19 million, in a scheme that involved paying weekly cash kickbacks to patients who lent their IDs to use for Medicaid billing.
Purple Heart claimed to rack up 1,000 miles a day on New York’s crowded streets. They then allegedly funneled the proceeds overseas through shell companies, according to the AG. In October 2019, the three were arrested after returning to the US from their native Guyana. Ringleader Sean Ally, an illegal immigrant, and one accomplice pleaded guilty and were sent to prison, according to a lawyer involved in the case.
Despite the alarming audit, which included 322 transportation providers in New York City, Gov. Kathy Hochul rewarded the company in control of doling out the funds, Medical Answering Services (MAS), by expanding its approximately $1 billion contract in 2023.
HHS said state officials should work with MAS to “refund to the federal government any unallowable amounts.”
It is unclear if the state ever complied. Officials did not respond to The Post’s request for comment.
“Medicaid is generally vulnerable to fraud because its patients don’t usually pay copays, and so may not notice or report improper billing claims,” Chris Pope, a Medicaid expert and senior fellow at the Manhattan Institute, told The Post.
“Non-emergency transportation is particularly prone to fraud, because it allows people who aren’t licensed medical professionals to claim funds from the program.”
The state disputed the HHS report, admitting to only a small number of inconsistencies. It claimed most of the suspicious rides actually did meet requirements, or were due to bookkeeping growing pains as MAS expanded its territory.
The problems have since continued, The Post can reveal. In the last year, the New York Attorney General’s Medicaid Fraud Control Unit has reached agreements to reclaim $13 million allegedly stolen by NEMT contractors.
According to the settlement from the AG’s office, one Bronx-based company called American Base No. 1 will repay $4.75 million to resolve allegations it grossly inflated milage, among other alleged scams, including one driver who claimed 96 unique trips amounting to driving 2,158 miles in just a single day.
Another Bronx company, NBT Transportation, will pay back $1.5 million to resolve allegations it submitted claims for fake toll expenses from Medicaid, according to the AG.
Seaman Radio Dispatchers of Manhattan was sued for $1.2 million for allegedly collecting Medicaid transportation payments for dead people while the company’s taxi license was suspended. The defendants have denied civil charges against them, and the case is ongoing, court records show.
Other companies mentioned in the lawsuits and settlements used false addresses to claim payments, hired unlicensed or banned drivers — some of whom had previously been convicted of Medicaid fraud — and operated kickback schemes with passengers.
A Western New York State Senator told The Post of one harrowing fraud in his district involving a drug addict using NEMT to attend methadone treatments. The driver concocted a kickback scheme with the patient, splitting the fare if the patient promised to request the same driver.
The Senator’s office said instead of going to treatment the driver began taking the patient to “drug dealing areas.” The patient has since died.
The AG’s office also said they sent cease-and-desist letters to another 54 transportation companies suspected of fraud and abuse in January 2025.
MAS has sole control over the state’s ballooning Non-Emergency Medical Transportation (NEMT) program. A 2019 Cuomo-era report showed NEMT costs had skyrocketed 131% since 2011, but state lawmakers who spoke to The Post had no idea how much the program costs today — saying the governor’s office has not made that information available to them.
In a 2025 letter to Gov. Hochul urging she return NEMT to county-level control, Republican New York State Senator George Borrello wrote, “Medicaid transportation used to be a local responsibility, run cost-effectively by counties that understood their communities.
“Now it’s a billion-dollar boondoggle run by unaccountable brokers who answer to no one, while fraud is exploding and taxpayers are getting ripped off.”
In 2011, Cuomo had taken NEMT away from county-level management and awarded contracts to regional brokers, giving over $400 million in contacts to Maxwell.
By 2017, Maxwell’s MAS brokerage had control of all the state’s regional contracts, including New York City.
MAS owner Rus Maxwell, and his husband, have donated over $300,000 to ex-Governor Andrew Cuomo and his successor, Hochul, even hosting a fundraiser for Hochul just two months before she renewed his company’s contract.
Maxwell did not respond to a request for comment from The Post.
Maxwell’s husband, Syracuse firefighter Morgan McDole, donated half of his yearly salary, $37,500, to Cuomo’s campaign claiming at the time that it was an expression of gratitude for the governor’s gay marriage support.
In 2022, husband McDole donated an additional $52,000 to Hochul’s campaign.
Less than one month after the AG’s office announced the $13 million in lawsuits against MAS contractors in June 2025, McDole donated $16,000 to Hochul and Maxwell donated $26,000 to the Hochul-controlled New York State Democratic Committee, campaign finance documents reviewed by The Post reveal.
Together, the two donated $236,000 to Cuomo and over $100,000 to Hochul.
The New York Department of Health (DOH) declined to answer questions from The Post about the 2022 audit or if the state has since implemented reforms.
Unlike other states such as Florida, Texas and Minnesota, New York is notoriously tightlipped about its $115 billion annual Medicaid spend, by not providing details about where taxpayer money ends up, as we recently reported.
The Post recently uncovered how the state lost $1.2 billion of taxpayer money to scammers and middlemen through the Consumer Directed Personal Assistance Program (CDPAP) and how it spends up to $400 million a year on Social Adult Day Care centers, which mostly duplicate the offerings of senior centers.
Both of these programs, like NEMT, were Cuomo-era Medicaid overhauls that have been continued by Hochul. Prior to these changes — which were sold to taxpayers as cost-saving and fraud-reducing — the state spent about $50 billion a year on Medicaid.
Gov. Hochul has ignored recent bipartisan calls for an independent audit of the state’s Medicaid behemoth.