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Attorney General Letitia James announced the conviction of Robert H. Corrado, 57, and Interline Employee Assistance Program, Inc. for engaging in a systematic kickback scheme and violating patients’ rights involving “three-quarter houses” in Queens and Brooklyn providing housing for homeless residents.

In 2017, the Attorney General’s Medicaid Fraud Control Unit (MFCU) secured an indictment and filed several causes of action against Corrado, Kristina Corrado, and Interline seeking to recover monies improperly obtained as a result of their criminal conduct.

Since 2015, MFCUs “three-quarter house” investigations have brought down three groups of fraudulent housing and treatment providers, including Narco Freedom, the Baumbit Group, and Interline.

“The defendants exploited individuals struggling with homelessness and substance abuse in order to pad their bottom line,” James said. “This series of investigations disrupted a dismal culture where housing was used as bait for the most vulnerable New Yorkers just to have an excuse to bill Medicaid.”

The indictment alleged that the Corrados and Interline engaged in an illegal kickback scheme. Robert Corrado, executive director of Interline, an outpatient substance abuse treatment program and owner of several “three-quarter houses” located in Queens and Brooklyn, provided housing at below market rent to homeless clients on the condition that the clients attend treatment at Interline and nowhere else.

“Three-quarter” reflects that many of the clients had been released from incarceration but had not yet secured housing. Robert Corrado and Interline, in turn, received payment from Medicaid for substance abuse treatment claims predicated on this kickback arrangement.

Through his plea on Jan. 8, Corrado and Interline admitted to the facts underlying the crimes charged; Queens Supreme Court Justice John Latella accepted the guilty pleas.

At a future date, Corrado will be sentenced to a jail term and enter into a civil settlement agreement to pay $2.4 million restitution to the State Medicaid program. Kristina Corrado, 34, previously pleaded guilty to the felony crime of Medical Assistance Provider: Prohibited Practice on November 26, and paid $25,000 in restitution.

“We will never tolerate this type of behavior that defrauds both out state and our communities,” James said.

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