The Manhattan Beach couple whose three-quarter house business was the subject of a New York Times investigation have been indicted for Medicaid fraud and money laundering, the Attorney General announced.
Yury and Rimma Baumblit were arrested in April at their 5,250-square-foot mansion on Corbin Place. They are accused of funneling tenants from their Brooklyn flophouses towards certain Medicaid-enrolled drug treatment providers, even if the tenants did not need drug treatment.
“As we allege in our indictment, the defendants orchestrated a deliberate scheme that defrauded taxpayers and ripped off Medicaid, while showing little regard for the well-being of their residents,” Attorney General Eric Schneiderman said in a statement. “My office will not stand for those who put profits over the health of some of our most vulnerable members of society.”
A New York Times investigation that preceded the Baumblit’s arrest uncovered the deplorable living conditions at the couple’s Brooklyn flophouses. The houses, often called three-quarter homes, receive money from the state to provide housing for people recovering from drug addiction or with mental illness. However, a lack of government oversight makes the business attractive to unscrupulous operators like the Baumblits — who the Times’ investigation found were not only allowing tenant to live in squalor, but also appeared to be forcing them into drug treatment in order to squeeze extra cash out of their wards.
When the Baumblits were arrested at their $3 million Manhattan Beach home, authorities seized a trove of valuables, including jewels, designer bags, fur coats and a Mercedes. The Assistant State Attorney said at their arraignment the coupe lived and “ostentatious lifestyle paid for by the state,” according to the Daily News.
A judge set bail at $500,000 for Yuri and $300,000 for Rimma, who have both remained in custody since their arrest, according to the Attorney General. Authorities have also frozen the couple’s bank account and up to $1.9 million in assets.
Prosecutors allege the couple collected more than $600,000 through their illegal kickback scheme. They face up to 15 years in prison if convicted.