In a shocking betrayal of public trust, 119 Amtrak employees conspired to steal $12 million through elaborate healthcare fraud, with some workers now facing prison time as federal investigators dismantle what officials call a “troubling workforce culture” of normalized criminal behavior.
Key Takeaways
- 119 Amtrak employees participated in a massive $12 million healthcare fraud scheme between 2019 and 2022, with many receiving cash kickbacks for filing fraudulent claims.
- Amtrak employee Rodolfo Rivera has pleaded guilty to conspiracy charges, facing up to 10 years in prison and $250,000 in fines for his role in the fraud.
- The investigation has led to 28 employee resignations or retirements, 12 criminal charges, and 7 guilty pleas, while 61 active employees still await potential disciplinary action.
- Amtrak’s Inspector General described the fraud as revealing a “troubling workforce culture” where “blatant criminal behavior was somehow normalized” among Northeast region employees.
- Amtrak is implementing stronger fraud prevention measures, including enhanced employee education and improved monitoring systems for insurance claims.
Massive Fraud Operation Uncovered
Federal investigators have unveiled what they’re calling the largest employee fraud scheme in Amtrak’s history, involving at least 119 workers who systematically bilked the company’s healthcare plan out of over $12 million. The elaborate scam, which operated from January 2019 through June 2022, centered around employees submitting fraudulent insurance claims for medical services that were either never provided or medically unnecessary. The scheme primarily operated in northeastern states and Washington, D.C., with participants receiving cash kickbacks from corrupt healthcare providers in exchange for using their insurance information to file false claims.
The investigation began when unusual billing patterns caught the attention of Amtrak’s Office of Inspector General, leading to the identification of three New York healthcare providers involved in the scheme. Using undercover operations, investigators discovered employees were signing undated paperwork for treatments they never received and collecting cash kickbacks. Key figures in the fraud included Devon Burt and Hallum Gelzer, who actively recruited fellow employees and allegedly threatened healthcare providers for payoffs.
Legal Consequences and Employee Fallout
The legal ramifications for participants in the scheme have been severe. Amtrak employee Rodolfo Rivera has already pleaded guilty to conspiracy to commit healthcare fraud in Newark federal court, admitting to his role in the scheme alongside co-conspirators. Rivera faces serious consequences – up to 10 years in prison and fines of $250,000 – with his sentencing scheduled for June 26, 2025. The investigation, conducted by special agents from Amtrak’s Office of Inspector General, the Amtrak Police Department, and the DEA, has already resulted in significant employee turnover.
“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
The fallout has been substantial: 28 Amtrak employees have retired or resigned, 30 have departed for other reasons, and 12 have been criminally charged, with seven already pleading guilty. The OIG has submitted findings on 61 active employees to Amtrak management for potential disciplinary action. These consequences highlight the serious nature of healthcare fraud and the government’s commitment to prosecuting these cases.
Amtrak’s Response and Prevention Efforts
Amtrak has taken a firm stance against the fraud, condemning the actions of those involved and implementing measures to prevent similar schemes in the future. The company is working closely with its Office of Inspector General to strengthen controls against healthcare fraud, which has been identified as a high-risk area for the organization. New prevention measures include enhanced employee education, improved monitoring of insurance 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.” – Amtrak spokesperson Olivia Irvin
The revelations about this fraud scheme come at a challenging time for Amtrak, which operates as a partially government-funded passenger rail service. Previous OIG reports from 2018 and 2019 had suggested Amtrak could improve its measures to detect fraudulent claims earlier, indicating that the company may have had warning signs about potential vulnerabilities in its healthcare system. Amtrak has established channels for reporting suspected fraud, including an OIG Hotline and online reporting system, encouraging employees and the public to report suspicious activities.
Systemic Issues and Taxpayer Concerns
This massive fraud scheme raises serious questions about oversight and accountability within government-subsidized operations. With Amtrak receiving billions in taxpayer funding under President Trump’s administration, the revelation that employees could systematically defraud the company of $12 million points to potential weaknesses in financial controls. The case highlights how government-funded entities remain vulnerable to insider threats and fraud schemes, ultimately costing American taxpayers.
“Like many employers, Amtrak calls on medical benefit providers and insurers to do more to identify suspicious activity and stop medical insurance fraud.” – Amtrak
The Inspector General’s characterization of a “troubling workforce culture” where criminal behavior became normalized is particularly concerning for those demanding accountability in government spending. While Amtrak deserves credit for uncovering and addressing the fraud, the scale of the scheme indicates serious deficiencies in the company’s internal controls. As investigations and prosecutions continue, taxpayers and policymakers alike will be watching to ensure meaningful reforms prevent similar abuses in the future.
