Attorney General James announces the convictions and sentences of five taxi company owners in Orange and Rensselaer Counties for stealing millions from Medicaid

Five individuals and seven transport companies entered guilty pleas to stealing over $4.4 million from New York’s Medicaid program through illegal kickbacks and false billing, as well as money laundering and other fraudulent schemes to hide their crimes, according to a statement released today by New York Attorney General Letitia James.

On December 4, Muhammad Usman Khan, 40, Farhan Khan, 29, and Muhammad Rizwan Khan, 38, of Orange County, together with their associated businesses, entered a guilty plea in Orange County Court to the theft of over $3.8 million from Medicaid.

Consequently, Farhan Khan will spend one to three years in state jail and Muhammad Rizwan Khan will spend two and a third to seven years. Muhammad Usman Khan will be placed on probation for five years and jailed for six months by the court. In addition, the Khans will reimburse Medicaid $2 million for their criminal offenses.

In another case, Richard Sehl, 57, of Saratoga County, and John Gouzos, 48, of Nassau County, along with their businesses, entered a guilty plea in Rensselaer County Court on November 26 for stealing over $650,000 from Medicaid.

John Gouzos will be placed on probation for five years and jailed for six months by the court. Richard Sehl will receive a five-year probationary term from the court.

Attorney General James said it is unlawful and abhorrent to take advantage of vulnerable New York patients in order to embezzle millions of taxpayer funds. Money that ought to have been used for services and medical care for underprivileged New Yorkers was siphoned by fraudulent operations.

In addition to stealing from Medicaid, these criminals damaged the operations of respectable transportation companies, endangering vital patient services. The fight against fraud and abuse in our healthcare system will continue in my office.

Approved companies that transport Medicaid patients to and from covered medical treatments are reimbursed by Medicaid. Schemes operated by both groups of defendants unlawfully overcharged Medicaid for transportation services.

The Khans and their businesses routinely added bogus tolls to travels that were significantly greater than any actual toll that could be paid in the service region, frequently amounting to $50 per trip, and filed claims for fictitious trips between September 2019 and October 2023.

They overcharged Medicaid by $3.8 million in total. In order to inflate their Medicaid claims, Gouzos and Sehl also submitted false claims for travels with faked mileage between December 2021 and March 2023.

In order to recruit patients for illegally billing more costly Medicaid visits, both organizations mainly depended on unlawful kickback schemes involving Medicaid patients.

The Khans and their businesses gave Medicaid recipients the identification numbers they needed to submit fraudulent claims in exchange for weekly kickbacks.

In order to raise their fees each ride, Gouzos and Sehl also unlawfully paid kickbacks to Medicaid clients who asked for rides from places far from their actual transportation.

Additionally, both groups of defendants used their own shell corporations to launder money. Through these money laundering activities, they were able to pay kickbacks to Medicaid recipients they had recruited and obtain cash rewards for illegal Medicaid payments.

Farhan Khan, Muhammad Rizwan Khan, and their businesses, Empire Trans NY, Inc. (Empire), Meditrans NY, Inc. (Meditrans), and Tristate Express NY, Inc. (Tristate), have entered guilty pleas to the class B felony of Grand Larceny in the First Degree.

While corporate defendant A1 Class Car, Inc. (A1 Class) entered a guilty plea to Money Laundering in the Second Degree, a class C felony, Muhammad Usman Khan entered a guilty plea to Grand Larceny in the Third Degree, a class D felony.

Gouzos, the president and owner of Medi Cab Corp. (Medi Cab), pleaded guilty to a class D felony, Health Care Fraud in the Third Degree. He is expected to serve five years on probation and six months in jail on January 27, 2025.

Gouzos has already reimbursed Medicaid for almost $200,000. The court will sentence Medi Cab manager Sehl to five years of probation on January 27 for committing a class E felony—offering a fraudulent document for filing in the first degree.

The remaining businesses, Jay Auto Care, Inc. (Jay Auto Care) and Hojo Detail Centre, Inc. (Hojo), entered guilty pleas to Money Laundering in the Fourth Degree (a class E felony), while corporate defendant Medi Cab entered a guilty plea to Grand Larceny in the Second Degree (a class B felony).

Due to their convictions, each defendant will not be able to provide services under Medicaid, Medicare, or any other government-funded health program.

The Office of the Inspector General at the US Department of Health and Human Services is one of the government and private sector partners that the Attorney General acknowledges for their cooperation and support in these investigations.

The New York State Police, the Orange County Sheriff’s Office, the New York State Department of Health, the Office of the Medicaid Inspector General, Medical Answering Services, the Federal Bureau of Investigation, and the Town of Crawford Police.

With the help of Deputy Chief William Falk, Detective Supervisors John Benshoff and Jeffrey Pitts, together with Detectives Aleksandr Lipkin, Katelyn Matousek, Brendan Ryan, and Thomas Walker, worked on the investigations.

Senior Auditor Investigators Shannon Taylor, Gregory Reinhart, and Sandra Alverez, Principal Auditor-Investigators Sandra Iskowitz and Lora Pomponio, and Auditor Investigator Kate Levins carried out the financial analysis with help from Regional Chief Auditor Sarah Finning.

The inquiry was aided by Joshua Spellman, Administrative Assistant, and Maria Castro, David Hilbert, and Robert Bashaw of MFCU’s Electronic Investigative Support Group. Paralegal support was given by legal support analyst Kelvin Caraballo.

With support from Regional Director Todd Pettrew, MFCU Chief of Criminal Investigations Thomas O. Hanlon, and Konrad Payne, Deputy Chief of the MFCU’s Civil Enforcement Division, Special Assistant Attorneys General Samantha McCullagh and Patrick Scully handled the criminal charges. The head of MFCU’s Civil Enforcement Division is Alee Scott.

Assistant Deputy Attorney General Paul J. Mahoney and Director Amy Held are in charge of the MFCU. First Deputy Attorney General Jennifer Levy is in charge of operations, and Chief Deputy Attorney General Jos Maldonado is in charge of the Division of Criminal Justice.

By fighting Medicaid provider fraud and shielding nursing home patients from abuse and neglect, MFCU defends the public.

You can call the MFCU hotline at (800) 771-7755 or submit a confidential online complaint if you think you may have information concerning Medicaid provider fraud or an instance of abuse or neglect of a nursing home patient. Call 911 if this is an emergency.

Of the total federal fiscal year (FY) 2025 funding for New York MFCU, 75 percent, or $52,877,188, is provided by the US Department of Health and Human Services. The remaining 25%, or $17,625,728 for FY 2025, is funded by New York State.

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