Amtrak employees and healthcare providers conspired to steal $12 million through fraudulent claims, in the largest employee criminal conspiracy in the company’s history with 119 workers implicated and kickbacks exchanged for fake medical services.
Key Takeaways
- 119 Amtrak employees participated in the $12 million healthcare fraud scheme between 2019 and 2022, receiving cash kickbacks for allowing providers to bill using their insurance information.
- The scheme involved submitting claims for medical treatments that were never provided or were medically unnecessary, including services from acupuncturists and podiatrists.
- As a result of the investigation, 28 employees have retired or resigned, 30 left for other reasons, 12 have been criminally charged, and 7 have already pleaded guilty.
- Amtrak is implementing stricter controls to prevent future fraud, including employee education, enhanced claims monitoring, and more cost-efficient healthcare plans.
Massive Fraud Network Uncovered at Government-Funded Rail Service
The federal investigation into Amtrak’s healthcare fraud scheme has revealed a disturbing pattern of corruption within the government-subsidized rail service. At least 119 Amtrak employees colluded with healthcare providers to defraud the company’s health plan of more than $12 million over three years. The elaborate scheme, which operated from January 2019 through June 2022, involved employees from several northeastern states and Washington, D.C., who allowed medical providers to submit fraudulent claims using their insurance information in exchange for cash kickbacks.
The conspiracy began unraveling when unusual billing patterns caught the attention of administrators, leading investigators to identify three New York healthcare providers involved in the fraudulent activities. Subsequent undercover operations revealed employees signing undated paperwork for treatments they never received and walking away with cash payments, while the providers billed Amtrak’s health plan for services that were either completely fabricated or medically unnecessary.
Ringleaders and Criminal Proceedings
Key figures in the scam included Devon Burt and Hallum Gelzer, who actively recruited other Amtrak employees into the scheme and threatened healthcare providers to extract kickbacks. Rodolfo Rivera, one of the implicated employees, recently admitted to participating in the fraud and pleaded guilty to conspiracy to commit healthcare fraud in Newark federal court. Rivera and his co-conspirators received cash kickbacks from various healthcare providers, including an acupuncturist and a podiatrist, for allowing these providers to submit fraudulent claims using their insurance information.
“The sheer volume of employees who cavalierly participated in this scheme to steal Amtrak’s funds suggests not only a serious lapse in basic ethics, but a troubling workforce culture, at least in the Northeast region, in which blatant criminal behavior was somehow normalized,” said Amtrak Inspector General Kevin H. Winters.
Rivera now faces a maximum penalty of 10 years in prison and a $250,000 fine, with his sentencing scheduled for June 26, 2025. The investigation, conducted by special agents from the Amtrak Office of Inspector General, Amtrak Police Department, and the DEA, has already led to serious consequences for many involved. Twenty-eight Amtrak employees have retired or resigned, 30 have left for other reasons, and 12 have been criminally charged, with seven already pleading guilty.
Amtrak’s Response and Preventive Measures
Amtrak has strongly condemned the fraudulent activities and taken swift action against employees implicated in the investigation. The OIG has submitted its findings on 61 active employees to Amtrak management for potential disciplinary action. The company is working closely with the OIG to implement measures that will prevent similar fraud schemes in the future, including enhanced employee education about healthcare benefits, improved monitoring of claims, and enrollment of employees in more cost-efficient healthcare plans.
“Amtrak strongly condemns this reprehensible act that occurred between 2019 and 2022 and is taking swift action with all active employees involved in the investigation,” said Amtrak spokesperson Olivia Irvin.
Previous OIG reports in 2018 and 2019 had suggested that Amtrak could improve measures to detect fraudulent claims earlier, identifying healthcare fraud as a high-risk area for the company. In response to the current scandal, Amtrak has committed to strengthening controls to prevent abuse and protect taxpayer funds. The company has also called on medical benefit providers and insurers to do more to identify suspicious activity and stop medical insurance fraud before it reaches this magnitude.
Implications for Taxpayer-Funded Services
This massive fraud scheme raises serious concerns about oversight and accountability in government-subsidized operations like Amtrak. The $12 million stolen through this conspiracy represents taxpayer money that could have been used for legitimate healthcare services or infrastructure improvements. The case highlights the need for stricter internal controls and more rigorous vetting of healthcare claims within organizations that receive substantial federal funding.
“We hope this investigation and the resulting accountability process serves as a deterrent for Amtrak employees and health care providers who may choose to engage in such schemes, and we ask anyone who suspects or observes such fraud to report it to our fraud, waste and abuse hotline,” said Winters, the inspector general.
As the investigation continues, more employees and healthcare providers may face charges. The OIG has created channels for reporting suspected fraud, including a hotline and online reporting options. This case serves as a stark reminder of the importance of integrity in public service and the need for constant vigilance against corruption and fraud in taxpayer-funded programs under President Trump’s administration.
