Amtrak Employees and Healthcare Providers Involved in $12 Million Health Insurance Fraud Scheme
A shocking investigation by Amtrak’s Office of Inspector General (OIG) has uncovered a massive healthcare fraud scheme involving at least 119 Amtrak employees and several healthcare providers. The scheme, which spanned from 2019 to 2022, resulted in the fraudulent billing of over $16 million to Amtrak’s health plan, with the company being bilked out of $12 million.
The OIG’s investigation revealed that employees based in multiple states, including Pennsylvania, Delaware, New Jersey, New York, Maryland, Connecticut, and Washington, D.C., accepted cash kickbacks from three healthcare providers. In exchange, the employees provided their insurance information, as well as that of their dependents, to the providers. These providers then used the information to file fraudulent and questionable medical claims for services that were either never provided or were not medically necessary.
Amtrak Inspector General Kevin H. Winters expressed deep concern over the scale of the scheme and the apparent normalization of criminal behavior within a segment of the company’s workforce. He stated, "The sheer volume of employees who cavalierly participated in this scheme to steal Amtrak’s funds suggests not only a serious lapse in basic ethics, but a troubling workforce culture, at least in the Northeast region, in which blatant criminal behavior was somehow normalized."
Investigation Uncovers Widespread Fraud
The OIG’s investigation was initiated after an agent noticed unusual billing patterns in reports generated by data analysts. The investigation quickly identified three New York healthcare providers with questionable billing practices who shared a high number of Amtrak employees as patients.
To further investigate the scheme, an undercover agent posing as an Amtrak employee met with Punson Figueroa, an acupuncturist from Long Island City, New York, in June 2021. During the meeting, Figueroa instructed the agent to sign his name 30 times for services without dating the signatures. Figueroa then submitted fraudulent claims to Amtrak’s healthcare plan, claiming that the agent had visited providers at least seven times in May 2021 for acupuncture and physical therapy.
The agent visited Figueroa’s office again in July 2021, where Figueroa allegedly handed him an envelope containing $1,000. Despite the ongoing investigation, Figueroa continued to use the agent’s insurance information to submit dozens of fraudulent claims to Amtrak’s healthcare plan.
Legal Consequences and Employee Status
As a result of the OIG’s investigation, numerous employees have faced consequences. 28 employees retired or resigned, while 30 left the company for other reasons. A dozen employees have been criminally charged, and seven have pleaded guilty and are awaiting sentencing. As of now, 61 employees are still employed by Amtrak.
Figueroa pleaded guilty to defrauding Amtrak’s healthcare plan and was sentenced to three years of supervised release. Additionally, she was ordered to pay restitution of $9.05 million. Two other healthcare providers and a medical biller have also pleaded guilty for their roles in the scheme.
Michael DeNicola, a podiatrist from New York, pleaded guilty in June 2022 to conspiracy to commit health care fraud, distribution of a controlled substance, and unlawful possession of a gun. His sentencing is pending.
Regina Choi, a medical biller from Woodside, New York, who previously worked for Figueroa, pleaded guilty in June 2024 to conspiracy to commit health care fraud for submitting false and fraudulent claims to the Amtrak health care plan and paying cash kickbacks to Amtrak employees. Her sentence is also pending.
Amtrak’s Response and Efforts to Prevent Future Fraud
Amtrak has issued a statement condemning the fraudulent activities and outlining the steps it is taking to address medical insurance fraud. The company stated, "Amtrak strongly condemns this reprehensible act that occurred between 2019 and 2022 and is taking swift action with all active employees involved in the investigation."
Amtrak emphasized that it calls on medical benefit providers and insurers to do more to identify suspicious activity and stop medical insurance fraud. The company also highlighted its ongoing efforts to work closely with the OIG to identify and eliminate fraud and its implementation of various measures to enhance fraud prevention. These measures include increasing oversight and strengthening efforts to eliminate fraudulent schemes.
Prior Warnings and Recommendations
Notably, the OIG had previously issued reports in 2018 and 2019 that cautioned Amtrak about potential vulnerabilities in its healthcare claims processing. These reports indicated that Amtrak could strengthen measures to identify fraudulent medical claims sooner. Both reports highlighted billing patterns indicative of potential fraud among hundreds of providers. These prior warnings underscore the importance of proactive measures to prevent and detect fraud within healthcare systems.
The Amtrak healthcare fraud scheme serves as a stark reminder of the potential for abuse within healthcare systems and the importance of robust oversight and preventative measures. The OIG’s investigation has exposed a serious breach of ethics and a troubling workplace culture. As Amtrak works to address the fallout from this scheme, it is crucial that the company implements comprehensive measures to prevent future fraud and ensure accountability among its employees.
