A Glendale-based ambulance company is claiming that its operators were targeted in a federal corruption investigation, during which the company was denied millions in Medicare funding because of their ethnicity and driven into bankruptcy, according to a lawsuit filed against the federal government.
The owners of Trans-Aid Inc. are claiming that they were targeted in a federal fraud investigation solely because they were Armenian and among the top Medicare billers, according to the complaint.
While the lawsuit was filed a couple of years ago, the plaintiffs last month added new allegations that the federal government violated their constitutional rights. A representative of the U.S. Attorney’s office could not immediately be reached.
According to the lawsuit, before April of 2011, the majority of Trans-Aid’s revenues came from Medicare. In 2010, that reportedly totaled more than $8 million.
That month, however, Medicare reportedly began withholding payments, denying claims for “crazy reasons,” such as an illegible doctor’s signature and faded paperwork, said Kendall Jones, the attorney representing Trans-Aid.
The move came just six months after more than two dozen Los Angeles-area residents were arrested in a fraud scheme allegedly perpetrated by a Russian-Armenian crime ring in which Medicare was bilked out of more than $160 million, the lawsuit states.
“Because of the apparent existence of some ethnically Russian-Armenian organized crime groups and their alleged link to Medicare fraud, the federal government and its agents became intensely focused on scrutinizing all ethnically Russian-Armenian-owned Medicare providers,” the lawsuit states.
After nearly three years of withholding payments, during which time Trans-Aid was forced to lay off dozens of workers and eventually file for bankruptcy, “there was never one shred of evidence connecting the plaintiff to any criminal or fraudulent activity,” according to the lawsuit.
After two Caucasian men offered to buy the company, Medicare and its third-party fraud investigator, Safeguard, allowed the company to resume operations, Jones said.
“It’s pretty transparent,” Jones said.
According to Jones, more than 3,700 claims, worth nearly $2.5 million, filed in 2011 and 2012 have still not been paid by Medicare. Additionally, the company is claiming the investigation cost Trans-Aid more than $12 million in lost business.