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PERU - State investigators say a 51-year-old Peru woman, who ran a medical transportation business, engaged in a Medicaid scheme that resulted in over $11,000 in extra payments to the company.

Patricia Schaaf, who owned Blue Sky Transportation, was arrested last week on a warrant for 10 felony charges of Medicaid fraud and one count of money laundering.

The company provided transportation to non-emergency medical appointments and was qualified to receive Medicaid payments for the service.

State investigators with the Indiana Office of Attorney General Medicaid Fraud Control Unit initiated an investigation into Schaaf in 2014 after a patient reported the company was endangering her life and others.

The patient said the Blue Sky vehicles were unsafe, the drivers and the owner had criminal histories and she was often late for her doctor appointments, according to a probable-cause affidavit.

During a search of documents at the company's Peru offices, investigators say they found evidence that Schaaf knowingly billed for services that were not provided, or billed Medicaid for more services than were actually provided, using several schemes.

Investigators say they uncovered evidence of submitted claims despite the recipient cancelling their appointment, which was noted in Blue Sky’s own documentation, according to the affidavit.

Other documents showed mileage that was "inflated well beyond even the most generous option using Google Maps," and billing for round trips when the documentation indicates that the actual service was a one-way trip.

Investigators say in total, the false claims submitted to Medicaid resulted in $11,260 in extra payments to the company.

Investigators said that number is not "all-inclusive of the total amount of fraud by Patricia Schaaf," and only covers the largest fraudulent claims from July 1, 2014, to May 11, 2015.

The investigation also revealed Schaaf's mother and brother had been running different transportation companies, one of which was prosecuted in federal court for engaging in criminal billing schemes. Schaaf had also previously been convicted of dealing cocaine, according to court documents.

Schaaf was issued a $55,000 surety bond Monday in Miami Superior Court 2. She is set for an initial court hearing on Aug. 1.

Investigators with the Attorney General's Office say they were aided in their case by agents with the FBI, IRS and the Health and Human Service's Office of the Inspector General.

Carson Gerber can be reached at 765-854-6739, carson.gerber@kokomotribune.com or on Twitter @carsongerber1.

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Carson Gerber is a reporter for the Kokomo Tribune and can be reached at 765-854-6739, carson.gerber@kokomotribune.com or on Twitter @carsongerber1.

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