NY Woman Pleads Guilty to $2 Million Medicaid Theft

On paper, Bennett Surgical Supply Inc., was one of the fastest growing and busiest medical supply companies in New York. Even though located on the north shore of Long Island Sound and miles from busy Manhattan, Bennett Surgical had some impressive sales figures. According to prosecutors, the company was the highest biller statewide for wound dressings, ostomy supplies, bariatric hospital beds and pressure reducing mattresses. Unfortunately for taxpayers, it was all just a Medicaid fraud scam.

NY Woman Pleads Guilty to $2 Million Medicaid Theft

Earlier this year the New York Attorney General’s Office and the state’s Medicaid Fraud Control Unit obtained a Grand Jury indictment against the company and its majority owner, Katia Donnelly. The 52 count indictment charges the company and its owner with a wide variety of Medicaid fraud related crimes including grand larceny, offering a false instrument, forgery and falsifying records.

In order to sell so many dressings, hospital beds and other medical equipment, the company allegedly falsified thousands of claims and submitted them to Medicaid. Because Medicaid is funded with tax dollars, taxpayers wound up footing the bill for the phony charges.

In a formal media statement, the attorney general’s office said that Bennett Surgical received almost $2 million “for dispensing durable medical equipment and supplies that it had never possessed, that were not medically necessary, that its customers’ medical professionals never ordered, and that its customers in fact never received.“

The indictment was announced in May of 2016. In October 2016, prosecutors announced that Bennett and Katia Donnelly admitted to stealing more than $2 million.

In announcing Bennett’s admission of criminal wrongdoing, New York Attorney General Eric Schneiderman said, “This defendant helped herself to an exorbitant amount of money from the Medicaid program, a taxpayer-funded program intended to help some of our most vulnerable members of society. This case illustrates that no matter how clever the scheme, we will root out Medicaid fraud and punish those responsible.”

Medicaid Fraud and Whistleblower Awards

Medicaid, Medicare and Tricare all rely on taxpayer funding. Under the federal and New York State False Claims Act, people with inside knowledge of fraud involving government funds and programs can earn an award for their information. With triple damage a generous award provision of up to 30% of whatever the government collects, the potential award in this case could be as high as $1.8 million.

How to Report Medicaid Fraud

Insiders with knowledge of healthcare fraud and mismanagement have three choices. They can ignore the greed and fraud going on in front of them, call the government’s toll free hotline or call a lawyer and file a sealed False Claims Act case. (Don’t have a lawyer? The Coalition can help. Call our operators at 888.742.7248. They will have a lawyer call you back with 1 business day. No cost. No obligation.)

Filing a lawsuit sounds scary but is not. Sure, the technical rules are long and complex but there are some whistleblower lawyers with the savvy to take on these cases. In most instances the lawyer will not charge unless they collect money for you.

Medicaid fraud costs the Empire State billions of dollars annually. Without tips and qui tam lawsuits filed under the False Claims Act, prosecutors and auditors will never be able to catch up.

Whistleblowers provide a valuable public service by alerting authorities to fraud, misconduct and poor patient care. Their tips can prevent patients from suffering harm, particularly when a provider is forging prescriptions and providing medical equipment that patients don’t need.

If you have knowledge of Medicare or Medicaid fraud, submit your report. Submitting your claim online or calling our toll free number is the first step to putting a stop to fraud and collecting a cash award for your efforts.


Medicaid Fraud Hotline: 888.742.7248 or Report Online