Maranatha Human Services Inc., a Poughkeepsie nonprofit that provides housing and rehabilitation services to people with developmental disabilities, has agreed to pay New York and the federal government at least $850,000 for Medicaid fraud and then shut down operations.
U.S. District Court Judge Kenneth M. Karas approved state and federal settlements on Aug. 31. The lawsuit was filed as a whistleblower case four years ago and kept secret until last November, when the founder, Henry Alfonso Coley, agreed to pay back $220,000 in ill-gotten gains to the state and feds.
Coley founded Maranatha in 1988 as a non-profit corporation and funded it almost entirely with Medicaid payments.
The whistleblower, former chief operating officer Stephanie Munford, accused Coley of using Medicaid funds to pay for pet projects, low-show or no-show jobs, personal expenses, and consulting contracts to himself and his family and his friends.
Maranatha and Coley had agreed that $2.4 million in Medicaid funds were diverted but the governments agreed to accept less, according to the state settlement, because the organization “lacks the assets and ability to make full financial restitution.”
Maranatha agreed to pay $510,000 to New York State and $340,000 to the federal government within 30 days.
Last year, Coley agreed to pay the state $132,000 and the feds $88,000. He was barred from working for any entity that receives Medicaid funds and from serving as an officer or fundraiser for New York...
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