Kathy Hochul, New York’s Democrat governor, has been pursued by scandals during her time in office, including allegations she hid the true death toll from her predecessor’s orders to put COVID-positive patients in nursing homes.
She’s also faced criticism for complaining about minority children in the Bronx, as well has her support for $850 million in tax money for a football stadium.
And her relationship with the extremist New York mayor, socialist Zohran Mamdani, has caused friction.
That all in relatively minor, however, compared to the fact that the federal government now is suing her administration alleging she and others rigged a big on an $11 billion Medicaid homecare program.
That allowed a handpicked company to “siphon” millions of taxpayer dollars, the case charges.
“New York’s failure to police a favored vendor that unlawfully siphoned millions of dollars of Medicaid funding is egregious and betrays the public trust,” charged Brett A. Shumate, assistant attorney general for the Department of Justice’s Civil Division. “The Justice Department is acting to ensure that federal laws regarding truthful statements and fair dealing in federal health care programs are upheld and to prevent additional harm from being exacted against the public by PPL and New York.”
The dispute involves payroll services for nearly 250,000 homecare recipients.
The New York Post said, “Public Partnerships LLC was brought in to replace middlemen in the Consumer Directed Personal Assistance Program, or CDPAP, in a move the state claimed would save costs in 2024 – but led to a disastrous transition.”
🚨BREAKING: The DOJ just filed a lawsuit against Kathy Hochul’s admin, alleging it rigged the bidding on an $11 billion Medicaid homecare program.
I WARNED ABOUT THIS LAST YEAR
The bidding on the BIGGEST contract in NY history was insanely rigged and corrupt:
– The consulting… https://t.co/TN4wtyDr9j
— Libs of TikTok (@libsoftiktok) June 16, 2026
Feds sue Hochul officials, claim massive fraud scheme in revamp of NY’s $11B Medicaid homecare program https://t.co/1CMUgIZufA pic.twitter.com/ohJwSUCmQw
— New York Post (@nypost) June 16, 2026
The program pays friends and family members, rather than traditional home health aides, under the CDPAP program, to care for chronically ill or disabled individuals.
The 60-page legal complaint in federal court in New York names state Health Commissioner James McDonald and Medicaid Director Amir Bassiri, but doesn’t directly accuse Hochul of wrongdoing.
But it does charge that Hochul was actively involved in the transition as well as the awarding of the bid.
The suit charges there was “pressure from the Governor’s Office” as they reviewed bidders.
“PPL later secured the bid but proposed extending the timeline for CDPAP recipients and caregivers to transition to the new system – asking to stretch the requirement from three months to nine months as it scrambled to hire staff,” the report said.
However, Hochul’s office refused the change the timeline, and then it downplayed the seriousness of the transition catastrophe “as thousands of disabled New Yorkers spent hours dealing with horrible customer service problems while they tried to keep their caregivers paid,” the report said.
The federal government is involved as the complaint charges PPL “violated federal criminal healthcare fraud statutes” by inflating billings to Medicaid.
The feds said the new lawsuit was a reminder that the Trump administration is working to eliminate fraud and corruption.
And it comes even as multiple investigations continue into what experts assess to be $9 billion in social services fraud in Minnesota, with similar activities in other states, including Colorado. Dozens of criminal prosecutions already have developed even as arrests continue to be made.
“New York’s backroom deal with PPL has cost taxpayers millions of dollars and cast countless Medicaid patients to the curb,” Colin McDonald, assistant attorney general for the Justice Department’s National Fraud Enforcement Division, said in the complaint.
State officials have claimed there’s no basis for the dispute.
