Judge tosses suit that alleged Chicago schools, bus companies bilked Medicaid for millions

By Dan Churney | Dec 6, 2018

A Chicago federal judge has kicked to the curb a suit by a former busing contracts manager for Chicago Public Schools, who alleged bus companies and school officials defrauded Medicaid in connection with transportation of special needs students. 

The Nov. 29 decision was laid down by Judge Harry Leinenweber, of the U.S.District Court for the Northern District of Illinois. 

The ruling tossed a suit by Jeffrey Hubert against the Chicago Public Schools Board of Education and the following companies: Caravan School Bus; Chicago School Transit; Illinois Student Transportation; Illinois Central School Bus; First Student; Falcon Transportation; Alltown Bus Service; Latino Express; United Quick Transportation; and A.M. Bus.

Hubert was director of contract management in the Chicago Public Schools’ student transportation department, from 2013 until he was fired in 2015, according to court papers. Hubert brought the suit in April 2016 on behalf of the state and federal governments, through the False Claims Act, which allows whistleblowers to collect a part of funds recovered from frauds on the government..

Hubert accused the bus vendors of “colluding in their bidding contracts amongst themselves and with CPS” and billing for services not performed. As an example, Hubert said the companies ran “ghost buses,” which were reported to have run a route, but did not do so, carrying “ghost riders.” This was more frequently done for summer school, he alleged.

 Hubert alleged the school board was aware of this scheme, but went ahead and submitted the bills to Medicaid for reimbursement, fleecing untold millions of dollars from taxpayers. Hubert also alleged buses that did carry students, were often late, causing millions of teaching hours to be lost.

The school board and bus companies filed motions to dismiss the action, which Judge Leinenweber found persuasive.

“Hubert’s complaint raises more questions than it answers. He omits any indication of how he derived such allegations other than from his personal knowledge,” Leinenweber observed.

Leinenweber went on to say Hubert failed to provide specifics, leaving unanswered the “who, what, where, when, and how.”

The judge pointed out Hubert was not “some low-level employee or outside competitor,” who had no access to detailed information that would show a scheme allegedly existed to swindle the government.

Leinenweber said Hubert’s case is “too far a stretch to withstand dismissal.”

“If he cannot allege sufficient and particular facts . . . then he pleads himself out of Court,” Leinenweber added. 

 Leinenweber pointed out he has allowed Hubert four opportunities to amend his complaint and remove defects, but will be given no more chances.

Hubert also sued the school board in 2016 for allegedly firing him for alerting federal authorities to the alleged busing scam. The case remains pending in Cook County Circuit Court. 

Hubert is represented by the Chicago firm of Tomasik, Kotin & Kasserman in the suit against the board and bus vendors. The Chicago firm of Roetzel & Andress is representing him in the retaliatory discharge suit.

Defendants are represented by the following: Riley, Safer, Holmes & Cancila; Much Shelist; Litchfield & Cavo; Morrison & Mix; Lavin & Waldon; Schiff Hardin; Robbins, Salomon & Patt; Polsinelli PC; Collins & Collins; Walker Morton; and Sugar, Felsenthal, Grais & Helsinger, all of Chicago; and Stephenson & Stephenson, of Barrington Hills.

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Organizations in this Story

A.M. Bus Company Inc. Alltown Bus Service Inc. Chicago Public Schools (merged) Chicago School Transit Collins & Collins Falcon Transportation Inc. First Student Illinois Central School Bus. Illinois Student Transportation Latino Express Inc. Lavin and Waldon Litchfield Cavo Morrison & Mix Much Shelist Polsinelli PC Riley Safer Holmes & Cancila Robbins Salomon & Patt Ltd. Roetzel and Andress Schiff and Hardin Llp Sugar Felsenthal Grais & Hammer Tomasik Kotin Kasserman LLC U.S. District Court for the Northern District of Illinois United Quick Transportation

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