Brooklyn Landlord Who Operated Flophouses For Recovering Addicts Gets Bagged For Allegedly Bilking Medicaid By Pocketing Over $2 Million In Kickbacks From Providers Of Support Groups That He Forced His Tenants To Attend

In Brooklyn, New York, The New York Times reports:

• An operator of flophouses catering to addicts, who was the subject of an investigation last year by The New York Times, was arrested [...] on money laundering and Medicaid fraud charges.
  
  Investigators from the New York State attorney general’s office took the landlord, Yury Baumblit, and his wife, Rimma, who helped him run his business, into custody [...] at their Brooklyn home, a block from Brighton Beach. The couple were arraigned [...] in Kings County Criminal Court on felony charges of second-degree grand larceny, second-degree money laundering and violations of a law prohibiting Medicaid kickbacks.
  
  The charges center on allegations that Mr. Baumblit forced tenants of his flophouses to attend support groups at multiple substance-abuse treatment providers. In return for getting those tenants as clients, the providers paid companies run by the Baumblits more than $2 million in Medicaid kickbacks, Megan Friedland, an assistant attorney general, told the courtroom. If convicted, the Baumblits face up to 15 years in prison. The providers were not named at the hearing.
  
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  Officials have long known about Mr. Baumblit’s homes. In December 2010, MFY Legal Services, a nonprofit that has represented three-quarter-house tenants, filed a class-action lawsuit against the Baumblits and their companies over an alleged kickback scheme. The public radio station WNYC wrote about the lawsuit and the Baumblits’ network of homes about the same time. ProPublica, a nonprofit investigative news organization, also wrote about the Baumblits several years later, looking into their connection to the New York Service Network.
  
  Canarsie Aware, NRI and the New York Service Network, all regulated by the state Office of Alcoholism and Substance Abuse Services, remain open. Narco Freedom, which was accused last year by federal and state prosecutors of bilking Medicaid, has since been shut down.
  
  “It’s been so long that tenants have been complaining,” said Matthew Main, a lawyer with MFY. “Everyone knew this was happening. But Yury just kept opening new houses and opening new houses. The big thing that comes to mind is the tenants saw this as Mr. Baumblit being able to operate with impunity. This action by the attorney general’s office sends the message that their lives matter. The lives of poor people matter.”

For the story, see Flophouse Operator Is Arrested in a Scheme to Defraud Medicaid.