An investigation into former deputy state budget director Kosta Diamantis saga continues — but this time, it’s into a check he delivered to the Department of Social Services in 2020.
WSHU’s Ebong Udoma spoke with CT Mirror’s Andrew Brown to discuss his article written with Dave Altimari, “An open DSS audit was nixed, and a grand jury is investigating,” as part of the collaborative podcast Long Story Short.
WSHU: Hello, Andrew. Your reporting shows the investigation of Kosta Diamantis has spilled over into the Department of Social Services. What does Social Services have to do with Diamantis, who was in the Office of Policy and Management?
AB: So my colleague and I, Dave Altimari, started looking into this, and what we realized is that the state Department of Social Services has received several subpoenas from federal authorities and they are looking at, in essence, one day in May 2020, when Diamantis, the former state deputy budget director, helped to deliver a check to the state's Medicaid office. Particularly the office that performs audits on doctors, dentists and eye doctors who use the state's Medicaid program.
WSHU: How unusual is it for a state official to be delivering a $600,000 check from a private individual to another department?
AB: I mean, it's clear that the federal prosecutors are trying to answer that question. In my time, and my colleague Dave’s time, reporting on the state government it's eye-popping, right? You have someone hand delivering a check, when these are very official procedures, these Medicaid provider audits. And so there's a very formalized process for how to pay back Medicaid funds that you overbilled for. You can do that through an attorney, you can do that through a certified check sent in the mail. Instead, there was a delivery process in which a former deputy budget director and now former state lawmaker were hand-delivering this, which I think is what raised eyebrows.
WSHU: And what is the relationship between Diamantis, a former state official, and the former state legislator who accompanied him?
AB: Our understanding, from what my colleague was told, is that Diamantis and Chris Ziogas are distant cousins in some manner. Both of them are from Bristol. Kosta previously represented Bristol while he was in the legislature, and Ziogas later represented Bristol as well.
In this story, we really have three people from Bristol: you have Kosta Diamantis, the state deputy budget director; you have Chris Ziogas, a former state lawmaker who was representing Bristol at the time. And then you have Ziogas’ fiance, Helen Zervas, who is an eye doctor in Bristol. Zervas was notified about an upcoming audit of her Medicaid billing procedures.
WSHU: And basically what happened is, she's notified of the audit. She said she's gotten an outside firm to look over her paperwork and figured out that she took $600,000 that she hadn't actually performed any work for, right?
AB: Yes, she hired a pretty high-power law firm to represent her whenever she was notified about the upcoming audit. He said that they looked into her Medicaid billing practices and they found five different procedure codes. So you know, that's a retina exam or whatever, those are coded. And they say that she essentially billed $600,000 more than she should have for procedures that she never even performed and then they essentially negotiated with state Medicaid auditors and said they would voluntarily repay that $600,000 with the agreement that once the money was paid, the state would not come in and audit their books themselves. And then she decides, 'look, I'm gonna pay this money back.' But it's now delivered by Dimantis, a state employee, and Ziogas, a state legislator.
From what they told my colleague Dave Altimari, Diamantis said that he was just doing a favor for a friend during the pandemic, and he didn't want the check to get lost in the mail or delayed in the mail. There is a reason I think that federal prosecutors immediately latched on to this and have spent, from what we can tell from the subpoenas, like a year and a half looking into this. They're now at the process as of last October, they subpoenaed all of the emails that Ziogas sent out of his legislative email account, I think they are suspicious or they're investigating at least whether or not there was a pressure campaign to make the state Medicaid audit division accept this agreement, or to drop the audit that is at least at the very center of all of this.
WSHU: So the fact that the state dropped the audit audit after getting this check is also questionable.
AB: There is a procedure in the state of Connecticut for doctors, dentists, anybody who is billing Medicaid, to essentially self-identify overpayments that they received out of that government health insurance program. What that procedure says is that if you are already under audit or investigation for something, you don't have the ability, in most cases, to then come in and self-identify a problem in your billing procedure. And so what happened here is, it's very clear on the timeline from the letter that the lawyer sent, that they were notified about the upcoming audit in January, they began negotiating with the state audit division at the Department of Social Services in March. And by May, they had reached this agreement where Diamantis and Ziogas were delivering a check with the understanding that the audit would disappear.
WSHU: Another interesting fact that came out in your reporting, is the fact that Ziogas represented Diamantis in the initial state investigation into the school construction scandal.
AB: It was actually his daughter.
WSHU: It seems the whole family, including the extended family, is involved in this. So what is Diamantis saying right now about all this, when confronted about the fact that they're investigating all this?
AB: First of all, Chris said there was nothing to see here. He's happy if the feds want to look at every one of his emails, every one of his communications, he has nothing to hide. Diamantis essentially said that he had very little role in any of this outside of delivering the check, and that he saw it as just doing a favor for Helen's service, somebody who he's known from Bristol for a long time.
How that plays out, I don't know. I think federal prosecutors have spent quite a bit of time and resources focused on this one particular day. And so it's really hard to know where this goes, you're in a waiting game now to see if this rises to a level where prosecutors think they have evidence here of some type of a crime. There's no evidence in any of these documents. By the way, there is nothing in the emails to say that Ziogas or Diamantis got something in return for this. All that is known is what's in the letters, which is that this $600,000 was paid to the state. And an audit was I guess, for the best terminology, canceled.
WSHU: And the prosecutors are concentrating on the emails, especially the emails that were within the Department of Social Services regarding this particular activity?
AB: Before requesting these emails, they clearly had some indication that Diamantis and maybe other people delivered this money on May 12, 2020. Because they requested from the Department of Social Services, essentially, email exchanges between two people who are redacted from that specific day. And that is where you see the email that says it seems to be someone from the Office of Policy and Management, alerting people at the Department of Social Services that the state deputy budget director was on his way in a vehicle to deliver a check.
WSHU: And Diamantis says he did the hand delivery because this was during COVID. And they felt that there wasn't adequate staff and maybe mail wouldn't be delivered on time, etc, etc. And that he was just trying to help facilitate this.
AB: Yes, there was an agreement that essentially the money would be in the state's possession by May 15 of that year. And so the defense here on the part of Mr. Diamantis is that, you know, the mail could not be trusted at the time, or maybe not the USPS, but maybe the mail within the DSS office itself. And so he did a favor for a longtime friend who was an optometrist from the city of Bristol. Who happens to also be Ziogas’ fiance.
WSHU: Okay, Andrew, it seems that the federal authorities are spending quite a bit of time on this. It's been a long time since the investigation was started. Is it unusual for it to be so long?
AB: I, myself, have covered some major investigations with the U.S. Department of Justice, and sometimes this is just how it works. Setting up a federal grand jury, getting subpoenas, investigating something, especially of this complexity as far as school construction and now the state's Medicaid program. Sometimes these things take time, and the Feds like to make sure that they have bulletproof cases before they file charges. So I don't think this is totally out of the ordinary.
