FBI launches probe into explosive claims that New York officials deliberately starved a Long Island hospital of $1 billion in federal funds to facilitate a lucrative land grab.
Quick Takes
- Nassau University Medical Center chairman Matthew Bruderman alleges state officials withheld over $1 billion in funding to force the hospital’s failure
- Bruderman claims officials circulated money through offshore accounts to fraudulently claim federal matching funds without providing their share
- The FBI and Justice Department are actively investigating the allegations of fund manipulation and corruption
- Hochul administration denies wrongdoing while Bruderman alleges the scheme was designed to acquire valuable hospital land for redevelopment
- Under Bruderman’s leadership, the hospital has turned a $200 million deficit into a projected $11 million profit
Billion Dollar Heist Allegation Sparks Federal Investigation
The FBI has launched an investigation into bombshell accusations that top Long Island and New York state officials deliberately withheld over $1 billion in critical funding from Nassau University Medical Center (NUMC) as part of a calculated scheme to shut down the facility. Matthew Bruderman, chairman of the financially troubled hospital, alleges that state and county officials engineered a financial strangulation strategy spanning decades to ensure the hospital’s failure, allowing them to acquire valuable real estate for redevelopment projects that would benefit politically connected developers.
At the center of the allegations is a sophisticated scheme involving Disproportionate Share Hospital (DSH) funds – federal money designated for hospitals serving high percentages of low-income and uninsured patients. According to Bruderman, officials created the illusion of meeting their financial obligations to unlock federal matching funds while actually circulating money through offshore accounts. This shell game allegedly allowed them to claim federal reimbursements without ever actually providing their required share of funding to keep the hospital operational.
Formal Legal Actions Underway
NUMC has filed two Notices of Claim against New York State through law firms Pollock Cohen and Susman Godfrey, taking the first official steps toward litigation. 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. These filings represent the mandatory preliminary step before a formal lawsuit can be launched to recover the alleged misappropriated funds.
Bruderman describes the alleged scheme as deliberate corruption rather than bureaucratic error or incompetence. “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.” The chairman claims previous hospital leadership secretly borrowed the state’s share of funding from offshore accounts to cover appearances, then returned it after federal funds were unlocked – a cycle that repeated for years while systematically draining the hospital’s resources.
Political Pushback and Denial
When Bruderman presented his findings to Governor Kathy Hochul’s office, he claims he faced immediate resistance. The Hochul administration has categorically denied the accusations. This dismissive response has only intensified Bruderman’s resolve to pursue justice through legal channels.
NUMC is one of only five “DSH” designated hospitals in New York entitled to federal matching funds specifically for serving disadvantaged populations. The accusations suggest state officials deliberately undermined a critical healthcare safety net for some of New York’s most vulnerable citizens. The hospital provides essential services to many low-income and uninsured patients who would have few alternatives if the facility closed, making the alleged scheme particularly egregious if proven true.
Financial Turnaround Despite Obstacles
Despite the alleged decades-long financial sabotage, Bruderman has managed to engineer a remarkable financial turnaround at NUMC. Under his leadership, the hospital has transformed from running a $200 million deficit two years ago to projecting an $11 million profit this year. This dramatic improvement challenges the narrative that the hospital is fundamentally unsustainable and strengthens Bruderman’s claims that the financial difficulties were deliberately manufactured rather than inevitable.
The FBI and Justice Department have maintained their standard policy of neither confirming nor denying the existence of an investigation. However, multiple sources familiar with the matter have confirmed to media outlets that federal authorities are actively examining the evidence provided by Bruderman and hospital officials. If substantiated, these allegations could represent one of the most significant cases of public corruption in New York State history, potentially leading to criminal charges against current and former officials involved in the alleged scheme.
