The heads of a Mott Haven-based chain of drug rehabilitation clinics and two local transitional housing facilities were arrested today, charged with stealing millions from Medicaid through multiple scams.
The Attorney General’s Office announced it was indicting the top four executives of Narco Freedom Inc., saying they bilked the federal government of $27 million by forcing patients to come in for drug treatment, even when it wasn’t warranted, in order to cash in on their Medicaid reimbursements. In addition, the four rehab honchos are charged with evicting homeless patients from transitional housing facilities when they refused to comply with phony treatment regimens, committing insurance fraud and setting up shell companies to maximize their profits from the broad-ranging scheme.
Those arrested include the group’s former CEO, Alan Brand, 65, and his son, Jason Brand, 36, along with its current CEO, Gerald Bethea and controller Richard Gross. Alan and Jason Brand were first indicted last October.
In a separate indictment, Jonathan Brand, another son of Alan Brand, and John Cornachio, the brother of a business partner of Alan Brand, were also charged.
Narco Freedom, which opened in the Bronx in 1971, is a non-profit headquartered at 250 Grand Concourse near 138th Street. On its website, it boasts of its experience providing methadone and chemical dependency treatment, primary medical care and social support services. It says it has “extensive experience dealing with government agencies around licensing, rate setting, and compliance with regulations.”
In 1996, the agency expanded to Brooklyn and Queens, but six of the group’s ten clinics are located in Mott Haven, according to the group’s website.
The indictment maintains that the current and former CEOs “controlled and managed” the rehab programs to wring the maximum possible gain out of Medicaid, disregarding patients’ needs. Although the law permits patients to attend treatment and pick up their medications at the clinic at their convenience, Narco Freedom forced patients to come in for treatment five days a week, the indictment states, to maximize reimbursement.
On its website, Narco Freedom says that its scattered site housing program provides varied support services, ranging from “assistance with daily living skills” to “permanency planning.” But the indictment says Freedom Houses are “poorly maintained, making for difficult living conditions. Bed bug infestations are common as are drug dealing and violence.”
The indictment refers to the Brands and their associates as the Brand Criminal Enterprise, and estimates the group syphoned 10 percent of Narco Freedom’s Medicaid billings annually. One method of bilking the system, the indictment states, was done through the creation of a shell company, B&C Management, which billed Narco Freedom hundreds of thousands of dollars in services that were never provided.
Jonathan Brand, who is accused of setting up the phantom B&C Management, and Cornachio “drove luxury vehicles, such as a Porsche 911 Carrera and a Range Rover, paid for and maintained by Narco Freedom, although they did no work for the charity,” the Attorney General alleges.
In addition, Alan Brand allegedly demanded and received $13,000 monthly in personal kickbacks for basing some of the group’s facilities in buildings belonging to a particular real estate developer.
A judge has granted the AG’s office permission to freeze $33 million of the ring’s assets.
Narco Freedom receives nearly $40 million annually in Medicaid reimbursements, the Attorney General’s Office said.