Founder of Poughkeepsie-based non-profit admits to fraud; organization sued
The U.S. Attorney's Office has filed a federal civil fraud lawsuit against Maranatha Human Services Inc., a Poughkeepsie non-profit that provided services for the developmentally disabled, and its founder, Henry Alfonso Coley.
The office announced the suit Wednesday while also announcing a settlement with Coley over individual fraud claims, which includes Coley repaying $220,000 and accepting responsibility.
Coley and Maranatha falsely claimed millions of dollars were spent on Medicaid-funded services between 2010 and 2019 when, in fact, they went toward for-profit ventures and salaries for members of Coley's family, the government said.
Coley founded Maranatha in 1988 and served as its chief executive officer until earlier this year.
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In its complaint, the government said with its board's approval, Maranatha funded for-profit companies operated by Coley; paid excessive salaries and consulting fees to his family members, often for little or no work; and paid for tens of thousands of dollars of Coley's personal expenses, including more than $34,000 for personal training sessions at a gym.
The government further said from 2010 to 2019, Coley and Maranatha submitted to New York State cost reports that falsely claimed millions of dollars in expenses as allowable Medicaid costs, thus inflating the company's Medicaid reimbursement rates that resulted in Maranatha receiving millions of dollars in Medicaid funds to which it was not entitled.
The settlement with Coley, approved by U.S. District Judge Kenneth M. Karas, calls for Coley to pay $88,000 to the U.S. and $132,000 to New York. Coley also admitted and accepted responsibility for the conduct alleged in the government's complaint.
The U.S. Attorney's Office said the amounts were based on their assessment of Coley's ability to pay. That assessment was based on financial information Coley provided.
The office said since 2010, Coley had received more than $2 million in salary and benefits from Maranatha. The company claimed on its annual comprehensive financial reports all those costs were allowable Medicaid expenses, but the U.S. Attorney's Office said in fact Coley spent most of his time working on non-Medicaid ventures.
Coley also agreed never to work for, or accept payments from, any entity that receives funds from a federal health care program. A separare voluntary exclusion agreement with the federal Department of Health and Human Services' inspector general's office prohibits him from participating in Medicaid and other federal health care programs for 15 years.
This article originally appeared on Poughkeepsie Journal: Feds announce settlement with Poughkeepsie non-profit founder
