No-Show Nonprofit Executive Faces 15 Years in Prison

A Long Island man was found guilty of second-degree grand larceny in connection with a no-show job, the 12th conviction associated with a Medicaid-funded nonprofit in the Bronx.

A Bronx County jury on Friday found John Cornachio of Oyster Bay, N.Y., guilty of the Class C felony for holding a no-show job for more than five years at Narco Freedom, Inc., which was founded to provide substance abuse services throughout New York City.

Cornachio, 63, faces up to 15 years in state prison when he is sentenced on March 2. He was remanded to jail pending sentencing.

“The defendant crafted an elaborate scheme in order to hide a no-show job and steal from New York taxpayers – exploiting a Medicaid-funded program that was intended to help those suffering from substance abuse,” New York Attorney General Eric Schneiderman said via a press release announcing the verdict.

During the jury trial before Bronx County Supreme Court Justice Jeanette Rodriguez-Morick, the attorney general presented evidence that Cornachio colluded with management to have a “no-show” job at Narco Freedom. For more than five years, Cornachio collected more than $500,000 in salary and benefits paid by Narco Freedom.

As part of his “no-show job,” Narco provided Cornachio with health insurance and a car allowance that he used to lease a Land Rover, among other benefits. The evidence also showed that Cornachio obtained more than $300,000 from Narco Freedom through B&C Management, a shell company with no actual business that submitted fake invoices to Narco Freedom for services it never provided to the nonprofit. Some of the payments were made in the names of John Cornachio’s minor children, who were supposedly rendering substance abuse counseling.

In 2015, the Attorney General’s Medicaid Fraud Control Unit (MFCU) indicted Cornachio, Narco Freedom Inc., CEO Alan Brand, and 12 other individuals and corporations for defrauding the state Medicaid program. All defendants indicted in connection with Narco Freedom have now been convicted of various crimes, including enterprise corruption, grand larceny, and filing false information with government offices.

As part of the Narco Freedom investigation, Schneiderman also filed a civil action against Narco Freedom Inc., seeking asset forfeiture and other remedies, including treble damages and penalties under the New York State False Claims Act.

As part of its plea and civil agreements, Narco Freedom acknowledged that it stole from Medicaid and admitted to filing false statements with various state agencies, including the state Department of Health and the Attorney General’s Charities Bureau, in efforts to deceive and defraud these agencies.

Narco Freedom filed for bankruptcy in January 2016. A bankruptcy court approved a $118-million settlement to settle outstanding government claims by the state and federal governments. The precise amount to be recovered in the bankruptcy proceeding is yet to be determined.

In 2016, as part of the Attorney General’s investigation into fraudulent substance abuse providers and their exploitation of individuals living in substance abuse transitional housing, also known as “three-quarter houses,” MFCU also indicted Yuri Baumblit, Rimma Baumblit, Canarsie A.W.A.R.E. Inc., NRI Group, Inc., and Anthony Cornachio, John Cornachio’s brother and the owner of Canarsie A.W.A.R.E. Inc. and NRI Group, Inc., for defrauding Medicaid. Yuri Baumblit, Rimma Baumblit, and their companies have been convicted for that scheme. Criminal charges remain pending against Canarsie A.W.A.R.E. Inc. and Anthony Cornachio.