Comptroller: Otsego County-based businessmen stole $1 million

Mar. 11—Two people who provided transportation services in Otsego County were indicted Monday, March 11, for their alleged role in a scheme to steal more than $1 million from Medicaid.

Philip Mtui, 46, and Mbaga Kaiza, 47, partners in Phinaliz Communications, an Otsego County-based transportation provider for Medicaid recipients, were charged with filing false and inflated reimbursements for transportation services, New York State Comptroller Thomas P. DiNapoli announced in a media release on behalf of the joint state, local and federal investigating agencies.

"Mtui and Kaiza's alleged Medicaid fraud tried to undermine the integrity of a vital program," DiNapoli said in the release. "It also diverted funds that should have gone to legitimate health care needs and services for vulnerable New Yorkers. Our joint investigation will ensure justice is served in this case and I hope it is a warning to anyone who would try and defraud New York's Medicaid system."

Patients can use participating transportation services, which are billed to Medicaid, for legitimate medical appointments, the release said. Over the course of four years, Mtui and Kaiza allegedly sought and received payments for rides that never happened and billed multiple times for rides that did occur. In some instances, they allegedly paid kickbacks to Medicaid enrollees for using their transportation service and providing their patient information to help facilitate the fraud. It is estimated that they stole more than $1 million from Medicaid.

Numerous local, state and federal authorities assisted in the investigation that uncovered the alleged fraud, including the comptroller's office, the Otsego County Sheriff's Office, the Otsego County District Attorney's Office, the Oneonta Police Department, the U.S. Department of Health and Human Services Office of the Inspector General, the Otsego County Department of Probation, the Otsego County Department of Social Services, the state Department of Motor Vehicles, the state Department of Financial Services — Criminal Investigations Unit, the Oneida County Sheriff's Office, the Saratoga County Sheriff's Office and the East Greenbush Police Department.

"This operation is a perfect example of what can be accomplished through interagency cooperation," Oneonta Police Chief Christopher Witzenburg said in the release. "The positive impact of which has resulted in a significant decrease in funding that fueled large scale substance abuse and quality of life issues in our community."

Mtui and Kaiza were charged with first-degree grand larceny, a class B felony, and arraigned before Judge John F. Lambert in Otsego County Court, the release said. They are due back in court on May 6.

Vicky Klukkert, staff writer, can be reached at or 607-441-7221.