New York Health Care Provider Sentenced to 32 Months in Prison for Role in $11 Million Health Care Fraud Scheme Targeting Amtrak, Drug Distribution, and Unlawful Possession of[...]

NEWARK, N.J. - A podiatrist formerly based in New York was sentenced today for his role in a health care fraud scheme targeting Amtrak's health care plan, as well as for unlawful distribution of opioids and unlawful possession of a firearm, U.S. Attorney Robert Frazer announced.

Michael DeNicola, 64, pleaded guilty on June 29, 2022, before U.S. District Judge Madeline Cox Arleo in Newark federal court to conspiracy to commit health care fraud, unlawful distribution of controlled substances, and unlawful possession of a firearm. DeNicola was sentenced today to 32 months' imprisonment, three years' supervised release, and ordered to pay over $1.6 million in restitution and over $1.3 million in forfeiture.

According to documents filed in this case and statements made in court:

From 2019 to August 2021, DeNicola and his conspirators agreed to engage in a scheme to bill the Amtrak health care plan for fraudulent claims for services that either were never provided or were medically unnecessary. They would recruit Amtrak employees to participate in the scheme by paying them to allow the conspirators to use their patient and insurance information to submit false and fraudulent claims. DeNicola and his conspirators submitted false and fraudulent claims that caused Amtrak losses of more than $1.6 million.

DeNicola also provided oxycodone prescriptions to an individual in return for the individual's agreement to allow his patient and insurance information to be used for the submission of fraudulent insurance claims. DeNicola provided oxycodone prescription to others at the direction of this individual and did so outside of the usual course of professional treatment and without legitimate medical purpose. From April 2017 through February 2018, DeNicola issued 64 oxycodone prescriptions in this manner. DeNicola also unlawfully possessed a firearm on Sept. 1, 2019, after previously having been convicted in a court of a crime punishable by a term of imprisonment exceeding one year.

The overall scheme targeting the Amtrak health care plan involved dozens of Amtrak employees and multiple health care providers, who paid hundreds of thousands of dollars in cash kickbacks to Amtrak employees over the course of the scheme. In total, the Amtrak health care plan paid over $11 million in fraudulent claims associated with providers connected to the scheme. The Amtrak health care plan paid out over $1.6 million for claims associated with DeNicola. The investigation has resulted in the prosecution of nineteen individuals, including DeNicola. All have pleaded guilty to conspiracy to commit health care fraud.

U.S. Attorney Frazer credited special agents of the Amtrak Office of Inspector General, under the direction of Special Agent in Charge James Harper, the Amtrak Police Department, under the direction of Chief of Police James Cook, and special agents of the Drug Enforcement Administration, under the direction of Special Agent in Charge Frank A. Tarentino III in New York, with the investigation.

The government is represented by Assistant U.S. Attorney Katherine M. Romano, Deputy Chief of the Bank Integrity, Money Laundering, and Recovery Unit in Newark.

On April 7, the Department of Justice announced the creation of the National Fraud Enforcement Division (Fraud Division). The Fraud Division is investigating and prosecuting those who commit fraud against the American people. The Department's work to combat fraud supports President Trump's Task Force to Eliminate Fraud, a whole-of-government effort chaired by Vice President J.D. Vance to eliminate fraud, waste, and abuse within Federal benefit programs.

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Defense counsel: Lorraine S. Gauli-Rufo, Esq.