Piscataway Man Pleads Guilty To Medicaid Fraud

TRENTON  — The owner of a Totowa nursing home pleaded guilty Monday to Medicaid fraud after a state investigation revealed that he billed the Medicaid program for $302,877 in improper and unsubstantiated costs, including more than $100,000 in personal expenses, Attorney General Paula T. Dow announced.

According to Acting Insurance Fraud Prosecutor Riza Dagli, Victor Napenas, 63, of Piscataway, pleaded guilty to an accusation charging him with third-degree Medicaid fraud before Superior Court Judge Irvin J. Snyder in Camden County.  Napenas owned the Valley Rest Nursing Home on Bogart Street in Totowa, which closed in 2007.  In pleading guilty, he admitted that he fraudulently obtained payment from Medicaid for personal expenses unrelated to patient care.


The state will recommend that Napenas be sentenced to 90 days in jail as a condition of three years of probation.  He must pay $302,877 in restitution to the Medicaid program, $45,263 in penalties, and $31,859 in provider taxes owed to the state.  He will be prohibited from acting as a Medicaid provider for eight years. Snyder scheduled sentencing for Oct. 8.

The investigation began when Department of Health and Senior Services (DHSS) surveyors noted severe deficiencies in the care delivered to residents at Valley Rest, which resulted in the owners voluntarily closing the facility in 2007.  In the process, DHSS ordered a financial audit, which showed many irregularities on the facility’s 2005 cost report submitted to Medicaid.

DHSS referred the matter to the Division of Criminal Justice.  The Office of the Insurance Fraud Prosecutor’s Medicaid Fraud Control Unit worked closely on this investigation with DHSS, in particular the Department’s Director of Nursing Facility Rate Setting.

The investigation revealed that the cost report included $302,877 in improper charges, including personal expenses and other amounts Napenas could not document or prove were spent.

Napenas issued business credit cards to himself and his wife through the nursing home, which they used for personal purchases, including trips to the Philippines, dance lessons and large family dinners.  Napenas had those credit card charges and other personal expenses totaling more than $100,000 inserted into the cost report, resulting in reimbursement from Medicaid.

“This nursing home owner treated the facility’s Medicaid cost report like his own blank check, fraudulently obtaining reimbursement for over $100,000 in personal expenses in a single year,” said Dagli. “Fortunately, the Department of Health and Senior Services audited the facility and detected irregularities in the cost report.  Our Medicaid Fraud Control Unit will continue to work with the Department of Health and Senior Services to uncover and prosecute fraud and abuse involving Medicaid providers.”

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