Ag Obtains Indictment Against Businessman In Used Bed Scam

Attorney General Spitzer today announced that his Medicaid Fraud Control Unit has obtained a seven-count felony indictment against a Brooklyn businessman who billed Medicaid for supplying new hospital beds to Medicaid recipients, but instead provided them with cheaper used beds. The law requires Medicaid recipients to receive new hospital beds.

The indictment was handed up in Brooklyn Supreme Court charging Kenneth Zweibel, President of Kenmar Surgical & Oxygen, Inc., a provider of medical equipment under Medicaid. The company is located at 50 Brighton, 11th St., Brooklyn. Every year since 1993, Kenmar has received more than one million dollars in payments from the Medicaid program.

The indictment alleges that from 1990 to 1998, in Brooklyn and throughout New York, Zweibel intentionally bilked the state out of thousands of dollars in the scheme.

In court today, the state described how Zweibel allegedly distributed the beds, after placing a sticker on them which read, "Rented from and property of Kenmar Surgical & Oxygen, Inc." The bright orange and black sticker also had the company’s phone number and address prominently displayed.

The sticker falsely led the patients and their families to believe that the beds belonged to the company when in fact they belonged to the Medicaid recipients. When the recipients died or were moved to other health care facilities, families would call the company to come pick up the beds. Kenmar would pick up the beds and resell them.

Zweibel is charged with one count of one "Grand Larceny in the Third Degree," a class D felony, one count of "Scheme to Defraud in the First Degree," a class E felony, and five counts of "Offering a False Instrument for Filing," also a class E felony.

Class D felony’s are punishable by up to seven years in prison, and class E, up to four.

Special Assistant Attorney General Michael Berlowitz of Spitzer’s Medicaid Fraud Contol Unit is handling the case. All Medicaid Fraud cases are filed under the supervision of Deputy Attorney General José Maldonado.