A former Freeport couple that ran wheelchair van companies that transported clients with disabilities was sentenced Thursday in U.S. District Court in Portland for fraudulently billing MaineCare and filing false tax returns.
Robert Zuschlag, 60, and Kristen Zuschlag, 55, of Elijah, Georgia, were ordered to pay $302,000 in restitution to MaineCare and $93,000 to the Internal Revenue Service, according to the U.S. attorney’s office.
U.S. District Judge D. Brock Hornby sentenced Robert Zuschlag to 30 months in federal prison and his wife to three years of probation. He will begin serving his sentence in mid-April. The couple remains free on bail.
They were indicted in 2017 on 17 counts each of charges related to the fraudulent billing, false tax returns and false statements.
Robert Zuschlag pleaded guilty July 3, 2018, to one count each of committing health care fraud and conspiracy to defraud the federal government. His wife pleaded guilty the same day to one count each of making a false statement to a health care benefit program, obstruction of a federal audit, conspiracy to defraud the federal government and making a false statement to a welfare benefit program.
In exchange for their guilty pleas, additional counts of the charges they admitted to as well as charges of money laundering and filing false tax returns were dismissed.
The Zuschlags paid $245,000 on Thursday toward restitution, according to court documents.
The couple began operating Freeport Transit Inc. and offering transportation to wheelchair users in January 2000 in Robert Zuschlag’s name. Since 2007, they have run that business and C3 Transport from Georgia.
Freeport Transit first ran afoul of MaineCare billing rules in November 2009, according to court documents. A month later, C3 was created in Kristen Zuschlag’s name. It became a MaineCare-approved provider because false information was included in its application.
The two companies operated as one in violation of MaineCare rules, according to the prosecution version of events to which the Zuchlags pleaded guilty.
The companies operated out of the same location in Freeport, shared operating expenses, used the same employees, and utilized the same professional service providers such as accountants, insurers and payroll providers. The four vans C3 used in the early years were leased from Freeport Transit, according to the court document.
Robert Zuschlag, not his wife, managed both businesses, according to court documents. If the case had gone to trial former employees would have testified that nearly all their dealings were with Robert Zuschlag not Kirsten Zuschlag.
By pleading guilty, the Zuschlags admitted that the company was approved as a provider as a result of false statements and that many of the riders referred to C3 should not have been transported by a wheelchair van at the wheelchair rate.
The investigation that led to the criminal charges began with a routine audit by MaineCare in 2011, according to court documents. An audit of the couple’s tax return from 2010 and 2013 showed they had unreported income of more than $208,000 from C3.
Prosecutors and defense attorneys declined to comment on the case.