Lakewood fraud: Vaad met with N.J. officials before amnesty deal

LAKEWOOD - Jewish Orthodox civic leaders had exclusive access to state officials during the planning of a controversial county-wide Medicaid fraud amnesty offer — a program critics say caters to Lakewood's Orthodox community, the Asbury Park Press has learned.

State officials on Thursday said the only community group they met with as they formed the amnesty program was the Vaad, Lakewood's politically influential council of local Orthodox Jewish religious and business leaders. Local African American and Latino groups told the Asbury Park Press that they were not asked for their views on amnesty.

The meeting's disclosure comes as criticism has intensified about the amnesty program that was launched after 26 in Lakewood were charged in June and July in a public assistance fraud sweep.

The defendants — accused of taking more than a combined $2 million in public assistance they weren't entitled to — include a rabbi and his brother, business owners, students and housewives from the township's religious enclave.

After plans were announced to rent out the 3,200-seat Pine Belt Arena in Toms River to hold an amnesty "informational" program, the Vaad publicly endorsed the program.

But fewer than 40 people showed up for that Sept. 12 session, and State Comptroller Philip Degnan, who is overseeing the program, demurred when asked by an attendee if he had "reached out to rabbis" for their support.

"We have reached out to a number of community groups. We have had meetings with a number of community groups. I’m not going to talk about which ones," Degnan replied.

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On Thursday, Degnan in an emailed statement said his office's Medicaid Fraud Division "was solely responsible for conceiving of and developing what has become the Ocean County Medicaid Recipient Voluntary Disclosure Pilot Program."

Degnan said officials met with the Vaad and also had meetings with the Ocean County Prosecutor’s Office, the Ocean County Board of Social Services, and representatives of other prosecutor’s offices and law enforcement agencies.

No religious restrictions

The Medicaid amnesty reprieve doesn't have race or religious restrictions but is only open to residents of Ocean County.

Leaders of non-Orthodox groups in Lakewood say the amnesty opportunity came as a surprise to them.

"Nothing to us at all. No one reached out," said Alejandra Morales, president of La Voz Latina, which supports immigrant rights.

Pastor Glenn Wilson, whose church in Howell has a congregation of largely black and Latino worshipers who come from neighboring Lakewood, said state officials didn't contact him nor church members – and he called the amnesty “a slap in the face to all people of all groups."

Wilson also heads Lakewood UNITE (United Neighbors Improving Today's Equality), a group that advocates for the township's public school students.

“Amnesty is something you give to people who don’t know they were making a mistake. I have the same sense that the general public has that Medicaid fraud is probably not often done by mistake," he said. "I know of people who were denied services for programs just by being over an income limit by a few dollars. The rules weren’t bent for them or by them."

Degnan in his statement said his office "is willing to attend informational meetings with interested community groups in Ocean County at any time during the 90-day program."

Vaad leaders in an emailed statement didn't address questions about the group's role in planning.

"The program continues to have the Vaad's support as another tool to encourage greater compliance with the program's rules," said Vaad spokesman Rabbi Moshe Weisberg.

State officials concede it's the first time such an undertaking has been targeted to a specific area.

“We’ve offered this program because, based on our Medicaid fraud investigations in Ocean County, we believe there may be a larger problem in that county," said Degnan, a 2015 appointee of Gov. Chris Christie. “This is an opportunity to bring a significant number of people into compliance. That's our goal."

“We have not seen it in any other state," he said. “As far as we know, it’s a fairly unique program."

Degnan's office audits government finances, programs and contracts and has a Medicaid Fraud Division.

'We would be hung'

Lakewood resident Mami Quinonez, 61, is among critics who say the program selectively gives a pass to Orthodox Jews at a time when New Jersey has the nation's highest racial disparity in incarceration rates.

Quinonez, 61, a native of Puerto Rico who describes herself as a "community activist," said allowing others in the township who've wrongly received Medicaid benefits to avoid criminal charges is being done "because there are so many of them and their votes give them influence."

"If an Afro-American, Puerto Rican, Mexican or Caucasian did what they did, we would be hung," Quinonez said. "We would have went straight to the federal prison."

Lakewood's population topped 100,000 in the most recent U.S. Census estimate and Orthodox residents now account for more than half of that figure, community leaders say, though no official statistics are available.

The offer runs until Dec. 12. Degnan said it's a "pilot program" and that it could be available in other counties in the future.

Last week the Root online magazine — a popular black news and culture site — posted a story titled: “White People Commit Welfare Fraud, State Creates Amnesty Program so They Won’t Go to Jail."

Author Monique Judge wrote, “Religious leaders in the town support the program because it will let participants avoid prosecution. ... Will this happen in a predominantly black town in New Jersey as well, or nah? Asking for black people everywhere."

The Forward, another online site that says it offers "news that matters to American Jews," also weighed in with a story titled, "Lakewood Medicaid Fraudsters Get Amnesty – Proving Jews Are On The White Side Of The Law."

Author Helen Leshinsky wrote that reactions to the program on social media "seemed to come in three categories. There were those who decried the program on 'Law and Order' grounds, claiming all criminals should be charged. Then there was the downright anti-Semitic response, clamoring that Jews are getting preferential treatment.

"Finally, there was the double standard argument coming from people of color, to whom the law has never been this lenient and humane. The first two can be dismissed, but the latter cannot be ignored."

Blacks make up about 15 percent of New Jersey's population but more than 60 percent of the state's prison population, according to a report from the Washington, D.C.-based Sentencing Project.

There were 3,803 arrests for fraud in New Jersey in 2015 — the latest year available from the State Police Uniform Crime Report — with 55 percent of persons arrested white, 42 percent black, and 3 percent other races. The Hispanic ethnic origin accounted for 20 percent of the arrests.

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Residents of Newark, Camden, Paterson and other cities "where the racial makeup of the populations are very different" could use a similar boost with "not amnesty, but stepped-up state support for things like prisoner reentry programs and transition shelters," said Fred Rush, president of Ocean County's NAACP chapter.

"In the cities where you have a different racial makeup, they might have gun buyback programs, but those are open to anybody," Rush said. "To be honest, when I heard there was Medicaid fraud amnesty for Ocean County, I thought it was a scam. Why would they do that? And why does it seem it's geared to one religion?"

Self-reporting vs. court cases

NJ FamilyCare, a Medicaid insurance program funded by both federal and state dollars, covers children 18 and under who have no other insurance in families with incomes up to 355 percent of the federal poverty level – as an example, in a family of four the income limit would be $87,336 year, but the income limit for parents to qualify is $33,948.

Degnan said having public assistance cheaters self-report makes more sense than pursuing court cases, which can tap the government's limited manpower for investigations.

The amnesty terms of settlements call for full restitution payments, plus additional penalties, and voluntary withdrawal from Medicaid for a one-year period. After the amnesty offer expires Dec. 12, prosecutions will resume as needed, Degnan said.

The Office of the State Comptroller's Medicaid Fraud Division says it opened 407 cases for investigation and made 32 referrals to law enforcement agencies last year. The division also said it received 1,962 telephone fraud hotline tips.

Degnan noted that prosecuting public assistance cheats doesn't typically result in jail time. First-time offenders in many instances are offered pre-trial intervention, a probationary program that results in dismissal of charges upon completion, he said.

On Sept. 12, at the Pine Belt Arena in Toms River, an information session on how to apply for amnesty attracted only about three dozen people. Degnan spokesman Jeffrey Lamm said applications to the program can be submitted online, but information about the number of applicants won’t be available until the program is over in December.

The Office of the State Comptroller paid $1,200 for use of Pine Belt Arena and $640 for coverage by the Toms River Police Department for the information session last week.

Amnesty is a rare offering in New Jersey usually centered around income taxes. Here are some of the programs in recent years:

2016: A no-questions-asked gun buyback program was held in Monmouth County, netting 200 guns. Authorities paid between $50 and $200 per gun and ran checks to determine if the guns were stolen or used in a crime. Similar programs have been offered frequently throughout the state.

2015: New Jersey reports that a “closing agreement’’ tax amnesty deal allowed more than 26,000 people and businesses to settle outstanding debts by paying roughly $75 million in back taxes. New Jersey, in its 2009 tax amnesty, raked in a state-record $752 million from nonfilers and late filers and collected $87 million in 1987, $244 million in 1996 and $277 million in 2002.

2014: Parents delinquent on child support payments received a week to visit county probation to establish payment plans. In exchange, arrest warrants were dismissed.

Bob Jordan bjordan@gannettnj.com