Federal investigators have launched a probe into bombshell allegations that New York State officials systematically withheld over $1 billion from Nassau University Medical Center to force its closure and facilitate a lucrative land grab.
Key Insights
- Nassau University Medical Center Chairman Matthew Bruderman has filed formal notices claiming the hospital was deprived of over $1 billion in funding over decades.
- Bruderman alleges state officials secretly borrowed federal funds through offshore accounts while failing to provide legally required state allocations.
- The FBI and Justice Department are investigating these claims of financial sabotage allegedly designed to force the hospital’s closure for land redevelopment.
- Under Bruderman’s leadership, the hospital has improved financially, projecting an $11 million profit this year after previously facing a $200 million deficit.
Billion-Dollar Funding Scheme Uncovered
Nassau University Medical Center has filed two Notices of Claim against New York State, alleging a systematic scheme that deprived the public hospital of over $1 billion in critical funding. Chairman Matthew Bruderman has presented evidence suggesting state officials deliberately withheld legally required funding to cripple the hospital financially. The notices, filed by law firms Pollock Cohen and Susman Godfrey, target both the New York State Department of Health and the Nassau County Interim Finance Authority for what Bruderman calls intentional financial sabotage.
“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.” – claims hospital chairman Matthew Bruderman.
As a designated “DSH” (Disproportionate Share Hospital) facility serving predominantly low-income and uninsured patients, NUMC should have received substantial federal matching funds. However, Bruderman alleges state officials created an elaborate scheme to avoid providing their required contribution while still collecting federal dollars. The first notice specifically charges the Department of Health with failing to comply with federal Medicaid matching requirements, while the second accuses the Finance Authority of professional negligence and breach of fiduciary duty.
Federal Investigation Underway
The FBI and Justice Department have launched a formal investigation into these explosive allegations, examining whether officials orchestrated a decades-long scheme to sabotage the hospital financially. According to documentation provided to federal authorities, state officials would borrow federal DSH funds through offshore accounts and repay them only after matching federal funds were secured. This created the illusion of compliance while systematically starving the institution of legally mandated support.
Bruderman has emphasized that this wasn’t a case of bureaucratic incompetence but deliberate corruption. “This was not a clerical error. This was not some sort of incompetence. This was real corruption,” Bruderman told the New York Post. He believes the ultimate goal was to financially weaken the hospital to the point of closure, allowing state and local leaders to redevelop the valuable land for substantial profit. The chairman has fully cooperated with federal investigators, providing extensive documentation of the alleged financial improprieties.
Political Pushback and Hospital Turnaround
Bruderman’s efforts to address these issues with state leadership have reportedly met with resistance. After presenting his findings to Governor Kathy Hochul’s office, communication stalled. The governor’s press secretary has denied Bruderman’s allegations, shifting focus instead to patient care concerns and the hospital’s fiscal condition.
Despite the alleged funding sabotage, NUMC has experienced a remarkable financial turnaround under Bruderman’s leadership. The hospital is now projecting an $11 million profit this year, a dramatic improvement from the $200 million deficit it faced just two years ago. This recovery has occurred despite the funding challenges Bruderman claims have hampered the institution for decades. The formal notices filed against state agencies represent a preliminary step before potential lawsuits to recover the allegedly withheld funds.
Path Forward
As federal investigators continue examining the evidence, Bruderman remains committed to securing the funding he believes rightfully belongs to NUMC and the patients it serves. The hospital continues to function as one of only five designated DSH facilities in New York State, providing essential medical services to vulnerable populations. The outcome of this investigation could have far-reaching implications for public hospital funding nationwide and expose potential systemic corruption in healthcare financing.
Neither the FBI nor the Attorney General’s office has commented publicly on the investigation, which appears to be in its early stages. If Bruderman’s allegations prove accurate, this case could reveal one of the most significant instances of public healthcare funding misappropriation in New York State history, with potential criminal implications for officials involved in the alleged scheme.
