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FBI launches bombshell investigation into an alleged $1 billion scheme by New York officials to defund and shut down Nassau University Medical Center, potentially to redevelop the valuable land it occupies for profit.
Key Takeaways
- Nassau University Medical Center Chairman Matthew Bruderman has filed two Notices of Claim against New York State, alleging the hospital was intentionally shortchanged by over $1 billion.
- The FBI and Justice Department are investigating allegations that state and local officials orchestrated a long-term plan to financially starve the hospital to facilitate its closure.
- Bruderman alleges officials used an offshore account scheme to falsely claim federal funds without providing required state contributions.
- Despite prior financial struggles, under Bruderman’s leadership the hospital has improved financially, projecting an $11 million profit this year after a $200 million deficit two years ago.
- Governor Hochul’s office has denied the allegations, focusing instead on patient care and the hospital’s fiscal health.
Alleged Billion-Dollar Ruse Targeting Public Hospital
The FBI has launched an investigation into shocking allegations that top officials in Long Island and New York State orchestrated an elaborate scheme to deprive Nassau University Medical Center (NUMC) of over $1 billion in funding. According to hospital chairman Matthew Bruderman, this decades-long financial starvation was deliberately designed to ensure the hospital’s eventual failure. The startling claims center on what Bruderman describes as a coordinated effort to financially cripple the hospital, allowing state and local leaders to eventually shut it down and redevelop its prime real estate for substantial profit.
Federal Investigation Targets Medicaid Fund Manipulation
At the heart of the allegations is an intricate financial scheme involving federal Disproportionate Share Hospital (DSH) funds, which are intended to support healthcare facilities serving large numbers of low-income and uninsured patients. Bruderman claims New York State repeatedly failed to contribute its required matching funds to NUMC, one of only five DSH hospitals in the state. Instead, he alleges past hospital leadership secretly borrowed the state’s share from an offshore account to cover documentation requirements, then returned it after federal funds were unlocked, creating the false appearance of compliance while depriving the hospital of critical resources.
Bruderman has characterized the situation not as a clerical error or incompetence, but as deliberate corruption designed to weaken the hospital to the point where closure would appear to be the only viable option. The scheme allegedly involved collusion between state officials and past county leadership, with Bruderman noting that after presenting his findings to Governor Hochul’s office, he faced pushback and an alarming lack of communication rather than cooperative efforts to address the issues.
“It is a fact that New York state did not pay their share of the money owed to keep NUMC running,” said Bruderman, who receives no salary, has sued the state over his allegations.
Formal Legal Action Initiated Against State Entities
NUMC has formally filed two Notices of Claim against New York State entities, a preliminary step before initiating litigation to recover the allegedly misappropriated funds. The first notice targets the New York State Department of Health for failing to comply with federal Medicaid matching requirements, while the second accuses the Nassau County Interim Finance Authority of professional negligence and breach of fiduciary duty. The claims were filed through respected law firms Pollock Cohen and co-counsel Susman Godfrey, signaling the seriousness of the allegations.
According to the legal filings, the State created a false appearance of meeting its financial obligations to secure federal funds without actually providing the required matching contributions. This scheme allegedly operated through complex financial manipulations designed to evade detection while systematically draining resources from a vital community healthcare provider serving vulnerable populations. The notices also include allegations of defamation by the Nassau County Interim Finance Authority against current hospital leadership.
“This is corruption that is both broad and deep within our State’s government. This wasn’t a clerical oversight, a bookkeeping mistake or incompetence. What we’ve uncovered was nefarious, intentional and the State covered it up for years to starve this hospital and the people it serves of resources.” – asserted hospital chairman Matthew Bruderman.
Hospital’s Financial Recovery Amid Controversy
Despite the alleged financial sabotage, NUMC has shown remarkable improvement under Bruderman’s leadership. The hospital is now projecting an $11 million profit for the current fiscal year, an extraordinary turnaround from the $200 million deficit reported just two years ago. This recovery has occurred despite what Bruderman characterizes as continued obstruction from state officials who may have been invested in the hospital’s failure rather than its success.
Governor Hochul’s administration has firmly denied Bruderman’s allegations. The governor’s press secretary has shifted focus away from the financial improprieties, stating that the administration’s priority remains ensuring quality patient care and improving the hospital’s fiscal health. Meanwhile, both the FBI and the Attorney General’s office have maintained official silence regarding the ongoing investigation, though sources confirm federal authorities are actively examining the claims of financial manipulation and potential corruption.
Community Impact and Potential Consequences
The implications of these allegations extend far beyond financial impropriety, touching on critical issues of public health access and government accountability. As one of only five designated DSH hospitals in New York State, NUMC provides essential healthcare services to low-income and uninsured patients who might otherwise have nowhere to turn. The deliberate underfunding of such a critical resource raises serious questions about priorities and potential conflicts of interest among public officials responsible for safeguarding community health resources.
If Bruderman’s allegations are substantiated through the FBI investigation, the consequences could be far-reaching, potentially involving criminal charges against current or former officials. The case highlights the vulnerability of public institutions to manipulation and underscores the importance of transparency and oversight in government financial operations. As federal investigators continue their work, the future of this essential community hospital hangs in the balance, along with accountability for what may prove to be one of the most significant cases of public financial malfeasance in New York’s recent history.