Over 100 Amtrak employees orchestrated a massive $12 million health insurance scam that has led to multiple criminal charges, resignations, and an overhaul of the rail service’s fraud prevention protocols.
Quick Takes
- 119 Amtrak employees participated in a sophisticated health insurance fraud scheme from 2019-2022, costing the company approximately $12 million.
- Employees received cash kickbacks for allowing healthcare providers to submit fraudulent claims using their insurance information.
- 28 employees have resigned or retired, 30 left for other reasons, and 12 have been criminally charged with 7 pleading guilty so far.
- Amtrak’s Inspector General described the fraud as evidence of “a troubling workforce culture” where “blatant criminal behavior was somehow normalized.”
- Amtrak is implementing stronger oversight measures to prevent future healthcare fraud.
Massive Employee Conspiracy Uncovered
Federal investigators have uncovered what they’re calling the largest employee criminal conspiracy in Amtrak’s history, involving at least 119 employees who defrauded the company’s health care plan of over $12 million. The scheme, which operated from January 2019 through June 2022, involved employees from several northeastern states and Washington, D.C. These workers collaborated with healthcare providers to submit fraudulent insurance claims for services that were never provided or medically unnecessary, while receiving cash kickbacks in return.
The investigation began after unusual billing patterns were detected, leading authorities to identify three New York healthcare providers involved in the scheme. Undercover operations revealed the extent of the fraud, with employees signing undated papers for fake treatments and receiving cash payments. The scheme was particularly brazen in how openly it operated among Amtrak’s workforce.
The Fraud Operation and Key Players
Rodolfo Rivera, an Amtrak employee, recently pleaded guilty to conspiracy to commit health care fraud in Newark federal court. He admitted to participating in the scheme that resulted in over $11 million in fraudulent claims. Rivera worked alongside numerous co-conspirators, including other Amtrak employees who received kickbacks from healthcare providers such as acupuncturists and podiatrists. The health care fraud conspiracy charge carries a maximum penalty of 10 years in prison and a $250,000 fine. Rivera’s sentencing is scheduled for June 26, 2025.
“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.” Amtrak Inspector General Kevin H. Winters
Key figures in the operation included Devon Burt and Hallum Gelzer, who recruited fellow employees and reportedly threatened healthcare providers for kickbacks. The investigation was conducted by special agents from the Amtrak Office of Inspector General, Amtrak Police Department, and the DEA. Their work revealed a deeply concerning pattern of fraud that had become normalized within certain segments of Amtrak’s workforce.
Consequences and Aftermath
As a result of the investigation, 28 Amtrak employees have retired or resigned, 30 have left for other reasons, and 12 have been criminally charged, with seven pleading guilty so far. The Office of Inspector General has submitted findings on 61 active employees to Amtrak management for potential disciplinary action. The company is now working to recover lost funds and implement stronger oversight measures.
“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.” Amtrak spokesperson Olivia Irvin
Previous OIG reports in 2018 and 2019 had suggested Amtrak could improve measures to detect fraudulent claims earlier, indicating that warning signs existed before the scheme reached its peak. The OIG has identified healthcare fraud as a high-risk area for Amtrak, prompting the company to take significant steps to strengthen controls and prevent similar abuse in the future.
Amtrak’s Response and Prevention Efforts
In response to this unprecedented fraud case, Amtrak is implementing comprehensive measures to prevent future schemes. These include enhanced employee education about fraud detection and reporting, improved monitoring of insurance claims, and enrolling employees in more cost-efficient healthcare plans with better oversight mechanisms. The company has also emphasized that reports of suspected fraud can be made via the Amtrak OIG Hotline or online reporting system.
“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.” Winters, the inspector general
Amtrak has also called on medical benefit providers and insurers to improve their fraud detection capabilities, recognizing that this problem extends beyond their organization. The company remains committed to ensuring taxpayer funds are properly managed and that employees understand the serious consequences of participating in fraudulent activities.
