Alleged ringleader in NJ Medicaid fraud scheme arrested again – The Star-Ledger

State officials announced 13 arrests as part of Operation Rayscam, a sting of an alleged Medicaid fraud network. From left, Acting Insurance Fraud Prosecutor Ronald Chillemi, Acting Attorney General John J. Hoffman, and Deputy Attorney General Christopher Ruzich unveiled the scheme this morning, which Hoffman called “disgusting.”Seth Augenstein/The Star-Ledger 

By Seth Augenstein and Ben Horowitz/The Star-Ledger

NEWARK — Rehan “Ray” Zuberi was using a multimillion-dollar Medicaid fraud scheme to finance a life of boundless luxury, and he liked to pay with cash, authorities say.

Inside Zuberi’s 9,000-square-foot mansion in Boonton Township, he had $100,000 in cash, and he paid for a 2014 Lamborghini with a $400,000 casher’s check, according to Deputy Attorney General Christopher Ruzich.

Today, officials outlined during a press conference in Newark how Zuberi’s Diagnostic Imaging Affiliates allegedly operated and how “Operation Rayscam” came about

“It’s disgusting,” said John J. Hoffman, the acting Attorney General. “This enterprise allegedly bilked millions of dollars from Medicaid, a program designed to help New Jersey’s most vulnerable population.”

On Tuesday, Hoffman said, the scheme came to a crashing halt for the 45-year-old Zuberi and 12 associates, including his wife, father and two brothers-in-law.

More than 100 investigators from the state Attorney General’s Office and other agencies seized the enterprise’s assets, which also included a Ferrari, a Rolls Royce and two other luxury cars, along with expensive imaging equipment used at 10 diagnostic facilities across central and northern New Jersey.

The accused allegedly paid doctors to send patients to the offices for MRIs, PET scans and other tests that were not necessary, thereby bilking Medicaid of millions. The scheme allegedly paid out more than $300,000 in kickbacks. In return, the 30,000 fraudulent Medicaid claims filed over five years reeled in $8 million, Hoffman said.

View full sizeAuthorities believe the scheme involved Rehan Zuberi’s wife, father, and two brothers in law.Seth Augenstein/The Star-Ledger 

The kickbacks to chiropractors and physicians were paid using checks from “shell” corporations, and ranged from thousands to tens of thousands of dollars apiece, Hoffman said.

Five alleged ringleaders, including Zuberi, are charged with first-degree racketeering. He and his wife, Humara Paracha, were charged with multiple second- and third-degree counts, including money laundering, authorities said. The couple are also accused of not paying their income taxes since 2009.

Also accused of “controlling” the operation and charged with first-degree racketeering were Baber Eskar, 49, of Pompton Lakes, Zuberi’s close associate and chief operating officer of DIA; Rohit Gupta, president of the Edison DIA and owner of a medical billing company that processed the insurance claims, and Faisal Paracha of Woodbridge, the 30-year-old brother-in-law who was involved in the West Orange location.

Others charged were: Nawab Zuberi of Boonton, Rehan’s 73-year-old father; Salman Siddiqui of Jefferson, Rehan Zuberi’s 37-year-old brother-in-law; Felix Clarin, 44, of Florham Park, who ran the Jersey City location; Judith DeLeon of Bloomfield, 50, who managed the Hackensack office; and Natividada Urena of Clifton, 33, who ran the Union City location.

Abid Syed, 37, of East Hanover, 25-year-old Thomas Grecco of Clifton, and Jose Lopez, 51, of Passaic, were charged with various counts as well, authorities said.

A single anonymous tip began the investigation about 18 months ago, Hoffman said. It eventually resulted in search warrants on 14 locations: the 10 DIA-owned facilities, the offices of DIA’s billing company, and three homes, including Zuberi’s mansion, authorities said. DIA had offices in Hackensack, Elizabeth, Wayne, Jersey City, Englewood, Edison, West Orange, Union City and Montville.

It was not the first time Zuberi has been accused of Medicaid fraud.

The 9,000-square-foot Boonton home of Rehan “Ray” Zuberi, 45, the alleged ringleader of the Medicaid fraud ring busted by authorities today.NJ Attorney General 

In 1998, Zuberi pleaded guilty to defrauding Medicaid — and was sentenced to six years in state prison. After less than a year behind bars, he was released under a form of supervised release, according to Deirdre Fedkenheuer, a spokeswoman for the Department of Corrections.

Zuberi was removed from the Medicaid program in 2000, but was reinstated by federal authorities in 2007, and then by the state in 2011, according to a state official.

This afternoon, Zuberi and his associates appeared for bail hearings in Superior Court in Morristown. Deputy Attorney General Ruzich requested increases for Zuberi and the four others accused of leading the operation, and the defense attorneys asked for decreases.

Judge Robert Gilson maintained bail at $1 million for Zuberi and $300,000 for Eskar, Gupta and Faisal Paracha, changing the bail only for Zuberi’s wife, Humara Paracha, lowering it from $300,000 to $250,000.They remain in the Morris County jail.

Paracha’s attorney, E. Alexander Jardines, pointed out that the couple has three children and both of their parents are now in prison. He requested the bail be lowered to $100,000.

Ruzich, asking that Zuberi’s bail be increased to $2 million, pointed out that he was born in Pakistan, is not a U.S. citizen, has business interests in Pakistan and China and “at this point has no employment to go back to.”

The cash found in Zuberi’s mansion is an indication he has more money that isn’t visible, Ruzich said.

Jewelry – and a Rolls-Royce – were part of the inventory seized by about 100 investigators on Tuesday after a year of investigation into Diagnostic Imaging Affiliates.NJ Attorney General 

But Zuberi’s attorney, Joseph Rem Jr., painted an entirely different picture.

“Right now, he is close to indigent,” Rem said. “The state seized his businesses, cars and real estate. Right now, he doesn’t have funds to pay counsel.”

Riza Dagli, another attorney who is representing Zuberi, said the state has not made clear what evidence the investigation is based upon.

“What we know is, they arrested a lot of people, seized a lot of boxes, and made a lot of accusations. Once the dust settles, he’s confident he’ll be exonerated,” Dagli said.

Meanwhile, more than 100 people have lost their jobs, said Gina Coscia, who identified herself as a former employee at the American Imaging Center in Montville, one of the DIA facilities.

All 10 facilities were raided and shut down on Tuesday, she said, and employees were not paid for the past two weeks.

“The police told us to just find a new job,” she said. “We were basically left jobless and broke.”

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