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Newton man ordered to pay $700,000 for elaborate kickback scheme

Posted by Evan Allen  November 29, 2012 06:07 PM

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A Newton man will have to pay $700,000 in fines and restitution for paying kickbacks to employees at a regional transit authority in order to divert transportation services paid for by the state’s Medicaid program to five of his companies, according to a statement from Attorney General Martha Coakley’s office.

Alexander Shrayber, 57, of Newton, also received a suspended sentence of two and a half years in the House of Correction.

Shrayber pleaded guilty in June to two charges of Medicaid kickbacks and four counts of corrupt gifts, offers or promises to influence official acts, according to the statement.

He was sentenced at a hearing Thursday in Worcester Superior Court. His two and a half year sentence is suspended for five years, with five years of probation. He was ordered to pay $200,000 in fines and $500,000 in restitution to the state Medicaid program, according to the statement.

“This defendant, through an elaborate kickback scheme, stole directly from taxpayers and compromised the integrity of the public bidding process,” said Coakley in the statement. “Our office will continue to aggressively root out corruption and fraud in the Medicaid system which provides critical services to our most vulnerable population.”

Shrayber owned five transportation businesses that contracted work with the Montachusett Regional Transit Authority, according to the statement. The Transit Authority is a public agency that brokers transportation services to vendors in Pioneer Valley, North Central Massachusetts, South Central Massachusetts and Greater Boston. It provides transportation to recipients of MassHealth.

Between January of 2007 and April of 2010, according to the statement, Shrayber made cash payments to Transit Authority employees as part of an ongoing arrangement that involved monthly payments in return for bypassing the authority’s “low-bid system” and diverting transportation assignments for MassHealth recipients from other companies to one of Shrayber's transportation businesses.

Administrators at the Transit Authority cooperated with the investigation, according to the statement.

Evan Allen can be reached at evan.allen@globe.com

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