The United States has filed a civil fraud lawsuit against Maranatha Human Services, Inc. and Henry Alfonso Coley for falsely claiming that millions of dollars expended to benefit for-profit ventures owned and controlled by Coley and Maranatha, as well as payments to cover Coley’s personal costs and excessive payments to Coley’s family members, were reasonable and necessary costs in connection with Maranatha’s provision of Medicaid-funded services to individuals with developmental disabilities. Maranatha is a non-profit organization based in Poughkeepsie, New York; Coley founded Maranatha in 1988 and served as its chief executive officer until earlier this year. Specifically, the Government’s complaint alleges that, with its board’s approval, Maranatha funded for-profit companies operated by Coley; paid excessive salaries and consulting fees to Coley’s family members, often in exchange for little to no work; and paid for tens of thousands of dollars of Coley’s personal expenses.
The Government further alleges that, from 2010 to 2019, Coley and Maranatha submitted to the State of New York cost reports that falsely claimed millions of dollars in these expenses as “allowable” costs, which fraudulently inflated Maranatha’s Medicaid reimbursement rates and resulted in Maranatha receiving millions of dollars in Medicaid funds to which it was not entitled. Simultaneous with the filing of the lawsuit, the United States has resolved its claims against Coley through a settlement approved by US District Judge Kenneth M. Karas. In addition, Coley entered into a Voluntary Exclusion Agreement with HHS-OIG, which prohibits him from participating in Medicaid and other federal healthcare programs for 15 years.
