July 5, 2026 09:00 AM PST
(PenniesToSave.com) – Federal prosecutors have accused two Long Island men of orchestrating a years-long Medicaid fraud scheme that allegedly cost taxpayers more than $35 million through fake medical transportation claims, illegal kickbacks, and inflated reimbursement requests. According to an indictment filed in the U.S. District Court for the Eastern District of New York, the defendants allegedly billed Medicaid for rides that never occurred while manipulating trip information to collect larger payments from a program designed to help vulnerable patients reach essential medical care.[1]
The case is the latest in a broader federal effort to crack down on healthcare fraud, an area the Department of Justice has identified as a top enforcement priority. Investigators allege the defendants used proceeds from the scheme to purchase millions of dollars in homes and investment properties while diverting taxpayer-funded resources intended for legitimate Medicaid beneficiaries.[1]
Although the allegations have not been proven in court and both defendants are presumed innocent unless proven guilty, the case highlights ongoing concerns about protecting public healthcare programs from fraud and abuse. It also raises broader questions about oversight, accountability, and the challenges of safeguarding taxpayer dollars while ensuring vulnerable Americans continue receiving the services they need.[1][4]
Quick Links
- How Did Prosecutors Say The Alleged Medicaid Scheme Worked?
- What Evidence Did Investigators Present?
- Where Did Prosecutors Allege The Money Went?
- Why Is Healthcare Fraud Receiving So Much Federal Attention?
- What Does This Case Mean For Taxpayers And Medicaid Going Forward?
How Did Prosecutors Say The Alleged Medicaid Scheme Worked?
Federal prosecutors allege that the fraud scheme operated for nearly seven years, from January 2019 through October 2025, using a transportation company that was supposed to help Medicaid beneficiaries travel to medical appointments. According to the indictment, Saad Aziz owned Tri-Hamlet Taxi Inc., while Zabed Chowdhury, also known as “Jared,” managed the company’s day-to-day operations.[1]
The business provided ambulette services, a form of non-emergency medical transportation intended for patients who require assistance traveling to healthcare facilities but do not need emergency medical treatment. Medicaid pays approved transportation providers because reliable transportation can be essential for patients receiving dialysis, addiction treatment, rehabilitation, or other recurring medical services.[2]
Prosecutors allege the defendants corrupted that system by paying illegal kickbacks to Medicaid beneficiaries in exchange for requesting transportation through Tri-Hamlet Taxi. Court filings further allege that many of the trips billed to Medicaid were never actually provided. Instead, investigators claim millions of dollars in reimbursement requests were submitted for transportation that never occurred.[1]
The indictment also describes an alleged strategy to maximize reimbursements by directing beneficiaries to addiction treatment centers located much farther away than necessary. Prosecutors say beneficiaries were instructed to use false pickup and drop-off locations so the company could bill Medicaid for significantly longer trips. According to court documents, the defendants allegedly submitted more than $18 million in claims for rides exceeding 75 miles while fraudulently billing Medicaid more than $35 million overall.[1]
Investigators allege many of these transportation requests involved methadone treatment appointments, making the accusations particularly significant because the Medicaid transportation benefit exists to ensure individuals battling addiction can access critical healthcare services. Prosecutors argue that abusing this system not only wasted taxpayer funds but also undermined confidence in programs intended to assist some of the healthcare system’s most vulnerable patients.[1][3]
What Evidence Did Investigators Present?
The government’s case extends beyond billing records. Prosecutors say investigators spent years building evidence through financial analysis, surveillance, and undercover operations before presenting the case to a federal grand jury.[1][3]
One of the more notable allegations described in court filings involves undercover law enforcement officers posing as Medicaid beneficiaries. According to prosecutors, both defendants were recorded on video making illegal cash kickback payments to undercover agents. Courthouse News reported that still images from those recordings were included in court filings supporting the government’s request for substantial bail conditions.[3]
The investigation brought together multiple federal, state, and local agencies. The U.S. Attorney’s Office for the Eastern District of New York led the prosecution alongside investigators from the Department of Health and Human Services Office of Inspector General, IRS Criminal Investigation, Homeland Security Investigations, the Suffolk County District Attorney’s Office, and the Office of the New York State Comptroller.[1]
U.S. Attorney Joseph Nocella Jr. said the defendants allegedly transformed “a transportation program intended to provide vulnerable Medicaid beneficiaries with access to critical medical care into a vehicle for personal enrichment.” He further alleged they “stole tens of millions of taxpayer dollars” by paying kickbacks, billing for rides that were never provided, and inflating reimbursement claims through false information.[1]
Naomi Gruchacz, Special Agent in Charge for HHS-OIG, called the alleged conduct “an egregious abuse of the Medicaid program,” arguing that fraudulent billing diverts valuable healthcare resources away from individuals who genuinely depend on federally funded services. IRS Criminal Investigation Special Agent in Charge Harry T. Chavis Jr. similarly emphasized that healthcare fraud affects more than government finances, arguing it can make it harder for legitimate patients to receive the support they need.[1]
At this stage, however, these remain allegations presented by prosecutors. The defendants have been charged but have not been convicted, and the criminal case will proceed through the federal court system where the evidence will ultimately be tested before any determination of guilt is made.
Where Did Prosecutors Allege The Money Went?
According to the indictment, investigators believe the alleged fraud generated substantial personal financial benefits for the defendants beyond ordinary business income. Prosecutors allege that proceeds from the Medicaid billing scheme were used to fund personal lifestyles while acquiring significant real estate holdings across Long Island.[1]
Court documents state that the defendants allegedly purchased multiple homes and investment properties with a combined value of approximately $6 million using proceeds from the alleged scheme. Prosecutors contend these purchases were part of a broader effort to convert fraud proceeds into valuable assets, which is one reason money laundering conspiracy charges were included in the indictment.[1]
The government is seeking forfeiture of at least $35 million if the defendants are convicted, along with several real properties and approximately 15 bank accounts identified during the investigation. Those forfeiture requests are intended to recover assets prosecutors believe were obtained through or connected to the alleged fraud.[1]
The indictment charges Aziz and Chowdhury with conspiracy to commit healthcare fraud, healthcare fraud, conspiracy to defraud the United States and pay healthcare kickbacks, paying healthcare kickbacks, and conspiracy to commit money laundering. Each defendant faces a maximum potential sentence of up to 20 years in federal prison on several of the most serious charges if convicted.[1]
Courthouse News also reported that both defendants were previously arrested on a criminal complaint before the indictment was unsealed and were released on separate $1 million bail packages pending further court proceedings. They are expected to be arraigned in federal court as the case moves forward.[3]
As with every federal criminal prosecution, the indictment represents allegations rather than findings of guilt. The defendants remain presumed innocent unless and until prosecutors prove the charges beyond a reasonable doubt in court.
Why Is Healthcare Fraud Receiving So Much Federal Attention?
The Long Island indictment comes as federal officials continue expanding healthcare fraud enforcement across the country. While the allegations against Saad Aziz and Zabed Chowdhury focus on one transportation provider, prosecutors have framed the case as part of a much broader effort to protect taxpayer-funded healthcare programs from fraud and abuse.[1][4]
On April 7, 2026, the Department of Justice announced the creation of its National Fraud Enforcement Division, a unit dedicated to investigating and prosecuting fraud committed against the American public. The department has since highlighted healthcare fraud as one of its primary enforcement priorities, particularly schemes involving Medicare and Medicaid.[1]
The timing of this case also coincides with the Justice Department’s nationwide healthcare fraud takedown, which alleged approximately $6.5 billion in fraudulent healthcare claims across hundreds of defendants throughout the United States. According to the Democrat and Chronicle, more than 20 individuals in New York alone were charged as part of that broader operation, underscoring that federal investigators view healthcare fraud as a systemic issue rather than a collection of isolated incidents.[4]
The Trump administration has also emphasized healthcare fraud enforcement as part of its broader effort to reduce waste and improve accountability across federal programs. The Daily Caller reported that the White House has described its campaign as an effort to pursue fraudsters who have allegedly “looted billions from American taxpayers,” while expanding investigations involving Medicaid and Medicare fraud nationwide.[2]
At the same time, experts often caution against equating every improper government payment with criminal fraud. Government reports have estimated that Medicare and Medicaid experience tens of billions of dollars in improper payments each year, but those figures include administrative errors, documentation problems, and payments later corrected, in addition to intentional fraud.[2]
Supporters of stronger enforcement argue that aggressive investigations help preserve limited healthcare resources for patients who genuinely need assistance while deterring future abuse. Others stress that maintaining due process is equally important, ensuring every defendant receives a fair opportunity to challenge the government’s allegations before guilt is established.
What Does This Case Mean For Taxpayers And Medicaid Going Forward?
Although this case centers on two defendants and one transportation company, the allegations highlight broader questions about how taxpayer-funded healthcare programs are monitored and protected. Medicaid provides health coverage to millions of Americans, and transportation benefits play an important role in helping patients reach appointments they otherwise might miss. When those benefits are allegedly exploited, the consequences can extend well beyond financial losses.[1]
Federal prosecutors argue that fraudulent billing diverts resources away from individuals who legitimately rely on Medicaid transportation services, including patients receiving addiction treatment, dialysis, cancer care, and other ongoing medical services. Every dollar lost to fraud is a dollar unavailable for its intended purpose, which is why investigators describe healthcare fraud as more than simply a financial crime.[1]
The allegations may also encourage additional oversight of medical transportation providers and other businesses that participate in Medicaid reimbursement programs. Healthcare organizations that receive federal funding could face increased audits, more detailed documentation requirements, and expanded compliance reviews as regulators attempt to identify suspicious billing patterns earlier.
For taxpayers, the case serves as another reminder that government benefit programs require both adequate funding and effective oversight. Public confidence depends on knowing that assistance reaches eligible recipients while individuals who allegedly abuse the system are investigated and, if appropriate, prosecuted through the judicial process.
Ultimately, the Long Island indictment reflects two principles that are not mutually exclusive. Public healthcare programs remain an important safety net for millions of Americans, but protecting those programs also requires transparency, accountability, and strong enforcement against individuals accused of intentionally diverting taxpayer dollars for personal gain. As this case proceeds through federal court, it will offer another test of how the justice system balances vigorous fraud enforcement with the constitutional protections afforded to every defendant.
Final Thoughts
The indictment against Saad Aziz and Zabed Chowdhury represents one of the latest examples of the federal government’s renewed focus on combating healthcare fraud. Prosecutors allege the defendants exploited a Medicaid transportation program for years by paying illegal kickbacks, submitting claims for rides that never occurred, and inflating reimbursement requests, ultimately costing taxpayers more than $35 million.[1]
Whether those allegations are ultimately proven remains for the courts to decide. However, the case illustrates the enormous financial stakes involved when public healthcare programs are allegedly abused. It also demonstrates the growing coordination among federal, state, and local agencies as they pursue increasingly sophisticated fraud investigations.
For Americans who rely on Medicaid, the goal of these enforcement efforts is not simply to recover money after fraud occurs. It is also to strengthen confidence that limited public resources remain available for those who truly need them. As federal authorities continue expanding healthcare fraud investigations nationwide, similar cases are likely to remain a significant part of the Justice Department’s enforcement agenda in the months ahead.
Works Cited
- Nocella, Joseph, Jr. “Two Defendants Charged with Multi-Million Dollar Health Care Fraud Scheme.” United States Department of Justice, U.S. Attorney’s Office for the Eastern District of New York, 2 July 2026, https://www.justice.gov/usao-edny/pr/two-defendants-charged-multi-million-dollar-health-care-fraud-scheme.
- Owens, Ireland. “‘Egregious’: Two People Charged In Alleged Multi-Million Dollar Healthcare Fraud Scheme.” The Daily Caller, 2 July 2026, https://dailycaller.com/2026/07/02/charged-healthcare-fraud/.
- Pullano, Nina. “Long Island Ambulette Operators Charged in $35 Million Medicaid Fraud Scheme.” Courthouse News Service, 2 July 2026, https://www.courthousenews.com/long-island-ambulette-operators-charged-in-35-million-medicaid-fraud-scheme/.
- Barnes, Emily. “Over 20 New Yorkers Charged for Alleged Medicaid Fraud. See the Cases.” Democrat and Chronicle, 27 June 2026, https://www.democratandchronicle.com/story/news/2026/06/27/feds-reveal-ny-links-to-6-5b-in-medicaid-fraud-allegations-across-u-s/90714788007/.