DocGo (DCGO) came public via a SPAC transaction with Motion Acquisition Corp (MOTN) in November 2021. DocGo’s primary business is mobile health care services (e.g. on-site covid testing, vaccine administration, etc) and medical transportation via their subsidiary, “Ambulnz.”
DocGo’s business benefited from a major Covid bump in FY 2021 & 2022 that seemed like it would be impossible to replace. In May 2023, they won a huge one-year “no-bid” contract to provide services for NYC migrant asylum seekers. However, instead of serving as a lifeline, the contract has put a spotlight on the company’s bad business practices. This has prompted multiple NYC and state government agencies to investigate DocGo including an investigation by New York’s Attorney General.
Investors are aware of DocGo’s New York issues but the market seems unaware that DocGo’s problems go even deeper.
We discovered:
- Billing practices that former employees said amounted to Medi-Cal and Medicare Fraud.
- Lawsuits exposing multiple allegations of forging signatures on documents.
- Billing for covid tests that were not actually performed.
- Systematically editing patient reports to maximize profits.
- Culture of “cover-up rather than comply” where management cover-ups of mistakes and patient care issues.
- Terminating whistleblowers who spoke up against alleged “illegal acts” or offering payments that appear to amount to bribes.
- Leadership has a long history of lies and connections to fraudulent schemes.
- Two key people were at companies that the DOJ charged with fraudulently over-billing the US government.
- Another’s business was caught up in the unraveling of the second largest ponzi scheme in history.
- A CEO who cited his high ethics but recently resigned for lying about his resume.
- And a Board of Director’s whose backgrounds include multiple pump & dumps, penny stocks, delistings, reverse mergers, and connections to large ponzi schemes.
- DocGo’s corporate structure includes:
- Variable Interest Entities (VIE) which were made infamous by Enron to hide corporate losses. We think DocGo is using their VIE to hide liabilities and losses.
- Subsidiary going through a secretive “ABC liquidation” instead of a normal bankruptcy process.
- Sources told us the ABC liquidation has unearthed massive liability claims of >$100 million at the subsidiary.
- Small no name auditor.
- Widely reported issues with the NYC migrant asylum contract include:
- Abuse of and lying to migrants
- Potential related party dealings involving renting hotels managed by the CEO’s brother and owned by individuals the DOJ recently charged with fraud.
- Wasteful spending – including throwing away $39,000 a day of food meant for migrants
- Fundamentals of the core business are subpar with low gross margins and the company will lap all the one-time revenue benefits within 5 months.
- Est that one time revenue will decline by ~90% as DocGo already lost a majority of the year 2 NY migrant asylum contract.
- Other fundamental patient care issues we discovered include:
- Lying to government auditors.
- Skipping or cheating on required certifications and trainings.
- DocGo’s claims to be a tech and AI company yet:
- CEO resigned after lying on his resume about obtaining degrees in AI.
- The company’s “AI subsidiary” in Estonia has only 1 full-time employee.
- Multiple government investigations have already begun into DocGo:
- NYC comptroller launched a real-time audit of DocGo’s work and expenses
- NY Governor’s office and their Department of State launched theirf investigation.
- NY Attorney General’s office announced an investigation
The allegations of systematic billing fraud by former employees and punishing whistleblowers seem to fit with DocGo’s founders’ past businesses history of stealing from the US government. Some of the management teams past businesses faced DOJ investigations that resulted in major fines and sent their companies into bankruptcy.
We think DocGo will face a similar fate.
It’s only a matter of time before the government agencies investigating DocGo discover what we found.
Fuzzy Panda Research is Short DocGo (DCGO)
Please see additional disclosures at end of report and our terms of service.
Any former employees of DocGo/Ambulnz, government agencies or journalists investigating DocGo should reach out to us via email at [email protected].
Bull Case vs Reality
DocGo presents itself as “a leading provider of last mile mobile health care services,” set apart from the traditional healthcare system by their self-proclaimed innovative technology and scale.
DocGo’s core revenue growth has been driven by two key strategies: acquiring regional ambulance service companies through mergers and acquisitions (M&A), and securing contracts to provide medical services from government agencies and local hospital systems. Their revenue growth exploded at the onset of covid when the company made a heavy push into providing covid testing, covid vaccination, as well as other mobile medical services.
As a result, revenue has grown from $94 million in FY 2020 to $534 million LTM, an impressive 88% annualized growth rate. The bull case for DocGo is that the company can replace all the one-time Covid related revenue with sustainable government or private hospital contracts that are accretive to gross margins.
DocGo seemed to do just that when they surprisingly won a one-year, no-bid $432 million with New York City to provide services to migrant asylum seekers. The bull case’s hope was that contracts like the NYC one would lead to DocGo winning future major contracts like a $4 billion border related contract. Instead, DocGo was not even awarded the chance to submit an RFP for the border patrol contract.
The Reality:
Unfortunately for DocGo investors, the asylum contract now seems to mostly be a one-time low margin revenue bump with ~90% of the revenue set to go away in May 2024. Even worse it has attracted an onslaught of scrutiny from the public, the media and government agencies.
The company is already under government investigation and we believe the NY Attorney General will soon expand their own investigations to the wider issues we found. We uncovered significant allegations of:
- Fraudulent billing practices.
- Forging signatures on patient documents.
- Cover-ups regarding patient care issues.
We think these government investigations could potentially lead to Medicare, Medi-Cal and other insurance fraud charges against DocGo and force the company to change it’s billing practices
Leadership’s Shady Past: A History of Lies, DOJ Allegations of Fraud, and Penny-Stocks
DocGo’s Founders, Board of Directors, and management team are connected to failed penny stocks, investor fraud cases, and businesses that have settled multiple cases of defrauding the US government with the DOJ.
This “team” consists of a motley crew that we believe should not be trusted to allocate a large government spending budget. Their resumes are such that no one would be shocked to discover they were accused of allegedly overcharging the government.
Management’s past includes:
- Senior VP (and long-time CFO) who was previously the VP of Finance at Altegrity, a company that declared bankruptcy after settling DOJ charges of defrauding the federal government by forging the completion of background checks.
- Chairman & previous CEO was also CEO of an OTC penny stock that was delisted after their main investor, R. Allen Stanford, was accused by the FBI and DOJ of committing the 2nd largest ponzi scheme ever.
- Director whose other healthcare company settled DOJ charges of committing Medicare & Medi-Cal fraud for submitting false claims.
- CFO that was a board member of a penny stock connected to the infamous Platinum Partners (a hedge fund where founders were accused of fraud and charged with running a $1 billion ponzi-like scheme)
- CEO who recently “resigned” after he was caught lying about his academic credentials.
- Multiple directors that were board members and/or senior management at multiple reverse mergers and penny stocks (more of the team’s background in Appendix B – Board & Management Team’s Shady Past)
After the ex-CEO resigned for lying about his resume credentials in September 2023 the torch was passed to Lee Bienstock. Lee’s claim to fame is for having been fired from the TV Show “The Apprentice.” He then managed to still start his business career working for Donald Trump at “Trump Mortgage” before going on to work at Google. Trump Mortgage was a “failed, sketchy mortgage business” that closed in its first 18 months.
Part 1: Fraud Allegations & Cover-Ups Exposed in Lawsuits & Revealed by Former Employees
- Allegations of “Forging of Documents,”
- “Fraudulent Billing Practices,”
- “Medicare & Medi-Cal Insurance Fraud”
“It was definitely a lot of fraudulent billing practices because they’re forcing you to write certain things that might not be necessarily true in order to make it billable”
~Former DocGo (Ambulnz) EMT in New York
Multiple former DocGo employees explained to us in interviews how the company, as one former EMT in New York put it, “coached [EMTs] into embellishing, lying and or fabricating reasons, and instead of providing accurate documentation.”
Our research uncovered allegations of:
- Forging signatures on covid tests and altering medical records
- Defrauding Medi-Cal, Medicare, and Insurance
- Lying to regulators to obtain and keep operating licenses.
Allegations of Forging Signatures on Covid Tests:
A DocGo nurse reported her manager for falsifying her signature on Covid Tests that weren’t performed.
We discovered a recent never before reported legal case in which a former DocGo nurse alleges that she caught her superiors forging her signature on PCR Covid tests that weren’t performed. We think the motivation for forging her signature could have been so that the company could bill for covid tests that weren’t actually performed.
The nurse raised concerns with both a DocGo HR and her Operations Manager about the false signatures, an “illegal practice” that is a violation of the law. The whistleblower was terminated less than 2 weeks later.
Source – Ariano v Ambulnz, Docgo, etc LA County Court – LA County Case No. 23STCV16904
Another Legal Case – Forging Signatures Again!
We discovered another previously unknown legal case in which another former DocGo employee was terminated for having “refused to forge documents or signatures on documents.”
We do not know exactly what types of documents or signatures this additional former DocGo employee “refused to forge” but their employment case was ultimately settled out of court.
Source – Morgan v. Ambulnz – LA Court Case No. BC705888
Allegations of Medicare & Medi-Cal Insurance Fraud
A senior former employee informed us that, in California, Ambulnz management instructed their billing department to charge Medi-Cal using another company’s billing number because they didn’t have their own. The former employee believed that each reimbursement submission made during that time period “would be like me trying to bill for a call that one of my competitors ran” and thus each one was likely an incidence of Medi-Cal insurance fraud. They also told us that DocGo’s senior management was well aware of these suspect business practices.
Lawsuit Alleges DocGo Provided “False Information” to Receive Licenses
“I believe after that point in time, had they been caught, every single call would have been deemed insurance fraud”
~Former Senior VP at DocGo
In a different newly discovered lawsuit, a senior DocGo employee, Mike Summers, accused Stan Vashovsky, CEO and Andre Oberholzer, CFO of directing dispatchers to provide false information to Orange County Inspectors.
Source – Summers v. Ambulnz – LA County Case No. 18STLC14923
Providing false or misleading information to a government employee is not only violation of the law but it also carries hefty fines if a company is caught.
Potential fines according to the Medi-Cal Insurance Fraud Laws:
- False claims <$950 carry a fine of $1,000;
- False claims >$950 carry a fine of $10,000;
- False writing of claims with intent to defraud has a fine of $50,000.
If the former employees’ allegations are correct and the government decides to pursue insurance fraud claims then DocGo could be forced to pay major fines.
Former EMTs Disclosed Company’s Policy of Changing Patient Care Reports to Bill for More:
“I would finish the PCR (Patient Care Report), I would hit send on the tablet and it would go out to an office in the Philippines…They were basically looking, had I written that PCR to squeeze every possible dollar out of through whoever the insurance company was that was paying for that particular trip…”
~ Former DocGo (Ambulnz) EMT – New Jersey
Multiple former EMTs we interviewed discussed DocGo’s quality assurance process. The outsourced Quality Assurance team routinely required EMTs to:
- Document trips as emergency transportation even when the EMT said the call should be downgraded to “non-emergency”
- Embellish or add services to ensure the call could be billed as medically necessary
- Retroactively “modify” Personal Care Reports
“this is basically a perversion of what QA (Quality Assurance) is supposed to be”
~ Former DocGo (Ambulnz) EMT – New Jersey
Other former EMTs’ social media reviews of Ambulnz further confirm that the EMTs are “instructed to bill for superfluous things.”
“Cover It Up Rather than Comply”
DocGo’s track record of flaunting regulations and “bribing” or retaliating against whistleblowers
“Their way of passing the inspection was to cover it up rather than comply”
“I’d never been in that type of world where you either play along or get fired.”
~Former Senior VP at DocGo
UK Subsidiary Connected to Covering up Evidence of Mistakes and for Changing Documents; Company Allegedly tried to “Bribe” UK Whistleblowers to Sign Gag Agreements
DocGo’s UK Subsidiary, Ambulanz Community Partners Ltd*, provides services for North East Ambulance Trust who was “accused of doctoring multiple reports” and having “misled coroners by changing documents and witness statements about deaths”
Sources – Article at Dailymail.co.uk; Article at Thetimes.co.uk
Multiple independent audit reports (1, 2) found that NEAS and/or DocGo’s UK Subsidiary edited or withheld key information. Senior members of the staff changed the paramedic’s statements.
Whistleblowers disclosed to The Sunday Times that this happened in as many as 90 cases within 3 years.
The company apparently attempted to “incentivize” (aka bribe) the whistleblowers to not share their concerns with authorities via £40,000 payments in exchange for signing NDAs and gag agreements.
*Previously misstated North East Ambulance Trust as DocGo’s subsidiary, NEAS Trust is DocGo’s customer who employees DocGo’s UK subsidiary to provide EMT and ambulatory services.
Another Whistleblower (NYC Nurse) Revealed DocGo’s Nurses Gave Children Dangerous & Improper Covid Vaccines. DocGo Never Reported It & Covered it up.
Victoria, a former DocGo nurse and whistleblower alleges that DocGo’s Ambulnz nurses gave dozens of children the wrong COVID-19 vaccine in 2021-22. Instead of saline solution, she said they mistakenly used bacteriostatic water, a potentially unsafe diluent. When nurses raised concerns and reached out for guidance, supervisors directed them to YouTube and Google.
“DocGo failed to disclose these mistakes and covered them up”
“It was never reported”
~Victora, Former DocGo Nurse & Whistleblower (link)
DocGo Nurses Caught Coaching Cash-Strapped Patients on How to Receive Excessive Covid Vaccinations For Extra $100 Gift Cards
DocGo employees were also busted on hidden cameras coaching financially struggling patients on how to get nurses to administer excessive Covid-19 vaccines to them in order to receive multiple $100 gift cards.
Former DocGo employees allege that there were people were getting vaccinated over 5-6 times. “It’s so negligent,” Victoria said. (Project Veritas Link).
“It’s all about money at the end of the day. They don’t care what happens”
~ Victora, Former DocGo Nurse & Whistleblower (link)
Management’s “blind eye” to cheating on certification tests.
“People would just do whatever they needed to do to pass, more so than actually learn it, they needed people to do it regardless, so [management] might turn a blind eye”
~ Former DocGo Dispatcher in Alabama
Improperly Staffing Ambulances in Los Angeles:
A lawsuit exposed that Ambulnz was “improperly operating” their ambulances in Los Angeles because they lacked the proper license and staffing requirements. When DocGo’s Founder and their CFO was informed of serious issue they told him to “not worry” about it.
Source – Summers v. Ambulnz – LA County Case No. 18STLC14923
Part 2: The “No Bid” NYC Asylum Contract Shines a Light onto DocGo’s Shady Business Practices
- NY Attorney General Opened an Investigation
- NYC Comptroller Declined Contract – 1st Time They Ever Declined an Emergency Contract
- Governor’s Office Opened an Investigation
- Investigative Journalists Exposed Wasteful Spending, Potential Improper Transactions with Family Members of DocGo, and Mistreatment of Migrants
Despite lacking experience in migrant services, DocGo secured a one-year $432 million emergency, no-bid contract to manage NYC migrant services and aid with the influx of asylum seekers arriving in New York City. This contract initially appeared to be a savior for DocGo as it would temporarily fill the windfall profits from NYC Covid-related services.
Instead, the contract stirred up a hornet’s nest of intense scrutiny of DocGo’s business practices since the “No Bid” contract was given to them. DocGo is now under investigation by:
- The New York Attorney General’s office
- The New York Governor’s Office & NY Department of State
- Lots of investigative journalists who have unearthed serious issues.
- And is being audited by the NYC comptroller.
We believe that the investigations by the NY AG, government officials, and journalists that are currently focused on DocGo’s NY business practices will soon extend into the allegations of fraudulent billing practices, forging of documents and general mismanagement that we have discovered.
Mistreatment of Migrants Sparks a NY Attorney General Investigation + A State Inquiry by NY Governor
NY Times Journalists discovered alleged mistreatment of migrants by DocGo that included being “threatened” and “lied to.” Migrants told the New York Times stories of how they had been “misled and mistreated” as well as coerced to leave NYC on false promises of better accommodations and work opportunities upstate. Migrants also detailed how DocGo’s contracted staff employed implicit and explicit threats against them.
NY Attorney General Leticia James launched investigations into alleged mistreatment of the migrants.
State authorities including NY Governor Kathy Hochul and the New York Department of State also launched an investigation which uncovered that many of the security guards subcontracted by DocGo lacked proper licensure.
NY state suspended licenses of two security companies hired by DocGo.
DocGo’s contract (pg 12) also requires them to notify the government within 24 hours of allegations of abuse or maltreatment
NYC Comptroller, Brad Lander, initially declined the emergency contract citing doubts about DocGo’s integrity and capability
DocGo’s NYC asylum contract was the first emergency contract the NYC comptroller declined out of hundreds reviewed by his office. NYC Comptroller, Brad Lander, cited doubts about DocGo’s integrity and capability when he made a historic decision to decline approval of the emergency contract.
The comptroller’s office has declined fewer than 0.22% of contracts.
“Reports from upstate elected officials and service providers, as well as recent reporting, have raised many questions about DocGo’s integrity and capability,”
Brad Lander, NYC Comptroller, Testimony on 9-22-2023
Despite the Comptroller’s concerns, Mayor Eric Adams, utilized his executive power to overrule the rejection.
Comptroller Launched a Real-Time Audit of DocGo & Stripped Mayor’s Emergency Contract Powers.
Lander responded by launching a first-of-its-kind real-time audit of DocGo’s work on the government contract.
The NYC comptroller then stripped Mayor Adams of his emergency power to allocate migrant funds.
The Mayor also had the FBI seize his phones & iPads in a probe into alleged illegal fundraising/bribery.
“Improper Related Party Transactions” = Reimbursement Risk
Is It Improper to Use Government Funds to Pay Hotels Managed by the CEO’s Brother and Connected to a “Financial Crime Kingpin” Indicted for Fraud?
Investigative Journalists from the Albany Times Union discovered that DocGo is using NYC funds to rent out a hotel that is managed by the recently resigned CEO’s brother.
DocGo’s actual NYC contract (which was uncovered via a FOIL request by an Albany Times Union investigative journalist) explicitly states that “Improper Related Party Transactions” are “Disallowed Costs.”
The same hotel that is “managed” by the former CEO’s brother is also connected to “Mike” Khatiwala who was recently indicted for financial fraud by the DOJ.
Mike Khatiwala is listed as the point of contact for the hotel’s owner in county property tax records and was indicted by the DOJ under the financial crime kingpin statute for fraudulently obtaining SBA loans and the indictment alleges they created shell companies with straw owners.
We believe that DocGo has significant reimbursement risk around transactions that could be deemed “Improper Related Party Transactions.”
More Reimbursement Risk – Wasteful Use of Funds
Journalists Discovered ~$39,000 a Day of Trashed Migrant Meals
A NY Times’ journalist discovered that DocGo threw away an estimated $776,000 of wasted migrant meals in just a 20 day period of time. At this same rate that would amount to $14,235,000 of meals a YEAR that were never eaten and were thrown away.
Amazingly this is ~3.3% of the total contract value.
DocGo’s could be forced to reimburse New York for this large amount of wasted meals as their contract explicitly states that reimbursement might be required for any “improperly incurred costs…due to negligence directly caused by contractor, affiliates, and/or subcontractors.”
Journalists Uncovered that CEO Lied About Education on Resume
Lies that the DocGo CEO, Anthony Capone, told on his resume about having degrees that he had not actually obtained were uncovered by investigative journalists at the Albany Times Union. This resulted in Capone “resigning” as CEO.
Bleak Future for DocGo’s NYC Contract – Expect One-Time Revenue to DECLINE by ~90%
The NY Health & Hospitals already approved vendors for year 2 which starts in May 2024 of the migrant services contract and it is apparent that DocGo has already lost a significant portion of the contract.
DocGo did not qualify for the largest portion of the NYC migrant services contract (worth $355 million) which will be split between 4 vendors, not including DocGo.
For the smaller “case management” portion of the migrant services contract (worth $176.8 million) DocGo was approved along with 4 other vendors. Assuming it is split evenly, DocGo’s Revenue would decline from $432 million in year 1 to $35.4 million in year 2. A 92% decline in their one-time revenue.
Part 3: Cutting Corners at the Cost of Care
DocGo, the self-proclaimed innovator in mobile health services, attracts investors under the guise that they tackle the often-fraught mobile health care market differently than their competitors. But, beneath the surface, a stark reality emerges from the accounts of former employees and whistleblower lawsuits: another company prioritizing profits over patient safety and quality of care.
“Ambulnz at its ethos is to me mostly a marketing exercise,” one former EMT said. “They were trying to be the Tesla of ambulances and that just isn’t the case… They are the same New York City based private EMS who cuts costs and cuts corners with who they hire and what they’re doing”
Former DocGo (Ambulnz) EMT – New York #2
Staffing and Resource Issues Undercut Service Quality
Former employees say they were consistently resource-strapped, reporting chronic issues with staffing and sufficient stock of important EMT tools and equipment. When they brought their concerns to management, they said they were often met with disregard or a lack of urgency. One former employee alleged in a lawsuit against the company that she “purchased several items of life-saving equipment at her own expense.”
Source – Chase v. Ambulnz (DocGo Subsidiary) – LA County – Case No. 19STCV36675
Multiple former employees described situations where the company had signed big contracts with major hospitals or healthcare providers, but didn’t have enough employees and ambulances to meet the demands of the contract.
“We very quickly got overwhelmed with the amount of calls that they were pumping out because we didn’t have the trucks and the resources on the road.”
Former DocGo (Ambulnz) EMT – New York #1
‘Incompetent’ and undertrained staff impact quality of care
Due to staffing shortages and high turnover rates, formers said Ambulnz, DocGo’s subsidiary, began recruiting and hiring EMTs who were inexperienced or had been fired from previous EMT jobs.
“They started hiring anyone with an EMT card,” one former employee said. “I would tell (management) about the incompetent people they are hiring and say they shouldn’t be working there and they wouldn’t take it into account.”
Former DocGo (Ambulnz) EMT – New York #1
What’s more, former workers said the company put little effort into properly training staff on their positions. In one instance, an EMT who worked for the company in New York said they skipped the skill demonstration portion of the Emergency Vehicle Operating Certification altogether. “They just made you watch a video almost like Driver’s Ed about ‘don’t flip the ambulance’ and then you just had to sign that you did it,” the EMT said. The abbreviated training did little to help that EMT’s regular partner who was a “horrendously inexperienced and dangerous driver” and, at one point, attempted to “drag race some BMW sports car on the highway.”
Instructor was “bribed” to take qualification tests for employees:
According to a former senior employee, in another case, Ambulnz management bribed an emergency telecommunicator certification (ETC) instructor to take a qualification test on behalf of the Ambulnz staff she was asked to train. They found someone to teach the class and, when they arrived, DocGo staff instructed them to take the test for everyone instead of teaching the material.
The impact of these cost-cutting or otherwise sloppy business practices on safety and quality of care is evidenced in a slew of lawsuits and reviews alleging injuries, traffic accidents and unprofessionalism under their care.
“Ambulnz was really more focused on money instead of being focused on patient care”
Former DocGo (Ambulnz) EMT – New York #1
Part 4: This is NOT An “AI Company”
- CEO Resigned for Lying about Having an AI Degree.
- AI Subsidiary That is Really ONE Employee in Estonia
- Zero Patents
DocGo claims the company is a tech company and that they have a differentiated platform that is powered by AI (Artificial Intelligence).
CEO resigned after caught lying about degrees in AI
Anthony Capone, DocGo’s former CEO and previous the CTO, resigned after Albany Times Union exposed him for lying about having a Master’s degree in Artificial Intelligence.
“AI subsidiary,” Dara Development OU, is actually ONE employee in Estonia
It turns out DocGo’s AI subsidiary’s capabilities are just as inflated. Anthony Capone is listed as the manager of Estonian-based Dara Development OU. In 2021, Estonia is listed in DocGo’s S-1 as one of the key engineering tech centers for the company.
We pulled Dara’s Estonian annual reports and we discovered that Dara Development OU lists only 1 employee at the end of FY 2021 & FY 2022.
Zero Patents Found
We found zero patents assigned to DocGo via Google patent searches around any possible technological patents that have been assigned to DocGo or subsidiaries (Ambulnz, Rapid Reliable Testing, or even their Estonia subsidiaries).
DocGo’s Balance Sheet lists currently lists $0.069 million in Intangible Asset Value for Patents on their balance sheet. Similarly, their asset value for software is only $0.013 million and embarrassingly both DocGo’s patents + software equates to less than the value of $90,000 worth of non-compete agreements that has listed as assets.
DocGo’s Consumer Apps Indicate Very Little Usage:
DocGo On Demand – DocGo’s Consumer facing apps only has 100+ downloads and has 0 reviews on the Google Play Store. The app has only 4 reviews on Apple’s App Store
Their “Ambulnz Driver” app similarly only has 3 reviews on Apple’s App Store and does not even have a Google Play App.
Key Part of DocGo’s Technology is Actually Google Waze – The S-1 and 2021 10-K highlight that a key part of DocGo’s “tech” is actually the company relies on Google Waze for their mapping and traffic function.
“Land, Air, Sea” Hype Vehicle – Made by West Coast Customs.
The closest thing that our analysis has discovered to innovative proprietary technology at DocGo is this promotional vehicle that DocGo built during the middle of the stock market’s eVTOL hype. It was supposed to be a “Land, Air, Sea” ambulance that could go anywhere.
The vehicle was designed and built for DocGo by West Coast Customs.
Part 5: Secretive Bankruptcy, Hidden Liabilities, VIEs, and Other Red Flags.
“ABC” Liquidation Reveals Large Liabilities
DocGo’s California Subsidiary, Ambulnz Health LLC, is going through an “ABC” liquidation (Assignment for the Benefit of Creditors) instead of the normal chapter 7 or chapter 11 bankruptcy process. We consulted a bankruptcy expert who informed us that an “ABC” bankruptcy is an out of court, out of sight creature of old common law and that there are major benefits to insiders if they have done anything unlawful or problematic.
We were informed by a bankruptcy expert that the main reasons why a company would choose an “ABC Liquidation” include:
- It is done completely out of public view…Doing it behind closed doors without scrutiny is a big incentive
- All the unlawful stuff is unexamined.
- The debtor (assignor) chooses the assignee and usually that means the insiders who have probably done something problematic.
- Another benefit is speed.
- Furthermore, the assignee is someone you know who is not going to be diligent about pursuing unlawful dividends, excessive comp etc.
A confidential source involved in the liquidation of Ambulnz Health LLC informed us that the ABC liquidator let them know the liability claims that they received were “>$100 hundred million of liability claims.”
Disclosed Liabilities at Subsidiary Seem to Be >165% Larger than DocGo’s Consolidated Total!
Filings appear to show that $63.7 million of accrued liabilities (pg 23- 10Q) were sitting at “Ambulnz Health LLC” which is >165% larger than DocGo’s consolidated disclosed accrued liabilities of $38.6 million in Q3-2022 pre ABC liquidation. The FY 2022 10K indicates most of these accrued liabilities are intercompany payables owed to other DocGo subsidiaries, yet that disclosure changes in Q1-2023.
We believe it is a major red flag that Ambulnz Health LLC is using a secretive bankruptcy process out of the public view and that it is an even larger issue when filings show that subsidiary contains significant liabilities.
It makes us question if their other large liabilities hiding at DocGo’s other subsidiaries.
Utilizing Suspicious VIE Investments (VIE’s were made infamous by Enron)
Variable Interest Equity “VIE” investments were made infamous in the 2000s when Enron used these special purpose entities to conceal widening losses.
DocGo has a VIE (Variable Interest Equity) investment is in an entity formerly called MD1 Medical Care “MD1” which recently changed it’s name to “Mobile Medical Healthcare P.C.”
MD1 Medical Care was once disclosed as a “501(c)(3) charitable foundation” founded by DocGo’s former Chief Medical Officer Dr. Mark Merlin Interestingly the original S-1 and a March 2022 prospectus lists the former chief medical officer as being “CEO of the non-profit MD1.” IRS charity tax records last show “MD1 Program” filing as a charity in 2021. We called MD1’s main phone number 844-631-3627 in an attempt to get answers but instead discovered that “this phone number is no longer in service.”
Some of the MD1 Medical Care LLCs changed their corporate name in state records (December 2022-Pennslyvania & January 2023-Utah) to “Mobile Medical Healthcare, PC.” DocGo did not disclose Mobile Medical Healthcare as being a VIE until Q2-2023. Some of the MD1 Medical Care LLCs changed their corporate name in state records (December 2022-Pennslyvania & January 2023-Utah) to “Mobile Medical Healthcare, PC.” DocGo did not disclose Mobile Medical Healthcare as being a VIE until Q2-2023.
A DocGo connected website that we discovered – https://docgo.site/covidtest/ lists that care is provided by “Mobile Medical Healthcare, P.C. and affiliated practices.”
We speculate that DocGo could be using the VIEs to obscure the accounting for likely loss-making programs such as their Dollar General-Parking lot tests in Tennessee. NPR noted that DocGo’s rural healthcare test of providing healthcare out of an RV in a parking lot was having significant struggles including days where 0 total appointments were scheduled.
DocGo discloses minimal assets and liabilities at the VIE yet has made combined payments in FY 2021 & FY 2022 to MD1 Medical of ~$4.75 million.
We are not certain what exactly is hiding within DocGo’s VIEs but we speculate that DocGo might be using this VIE to obscure losses from investors.
Red Flag – Unheard of Auditor
In order for DocGo to be able to use VIEs to hide losses and suspiciously have >$60 million of hidden intercompany accrued liabilities parked in a subsidiary going through a secretive bankruptcy process they would first need to have auditor sign off on their accounting for those transactions.
It’s unsurprising that DocGo uses a suspect auditor Urish Popeck & Company. A majority of the companies Urish Popeck audits are penny stocks trading on the pink sheets. In fact, the median share price of Urish Popeck clients is <$0.10 and have a market capitalization of <$7 million.
Clutch.co ranks Urish as the 19th best accounting firm in Pennsylvania.
We believe that when a SPAC with questionable financials and a complex corporate structure uses a no-name auditor that investors should be concerned that they are hiding something.
Accounts Receivable UP 160% YoY But Provisions for Doubtful Accounts DOWN
Accounts receivable at DocGo are up ~160% YoY Q3-2023 vs Q3-2022 while revenue has grown at half that rate at +~80%.
DocGo’s Q3 operating cash flow saw a -$46 million outflow due to a ~$84 million increase in accounts receivables. The result was that the company only had $67.2 million of cash at the end of the quarter. DocGo decided to raise $25 million of debt financing in Q3 to fund the cash burn.
Note – DocGo’s management has said that the NYC Asylum contract accounts for the vast majority of the accounts receivable increase. Also, the NYC Comptroller cited that $70 million was owed to DocGo from the first 3 months in his September 6th letter where the Comptroller initially declined to approve DocGo’s contract. At that same monthly cadence of $23.3 million a month DocGo would end FY 2023 with ~$187 million of reported revenue in 2023 from the NYC contract but has received $63.8 million of payments through 12-28 so Accounts Receivable should continue increase by at least an additional $7 million through the end of the Q4.
Provision for Doubtful Accounts Down:
Meanwhile the company has decreased their “Allowance for Doubtful Accounts” as a % of Accounts Receivables from 8.6% at end of FY 2021 to just 2.3% in Q3-2023.
We are skeptical of this decrease in provisioning especially since the NYC contract explicitly calls out that “Improper Related Party Transactions” will not be reimbursed.
Nepotism & Insider Dealing
Companies like Nikola, Lordstown Motors, and Fisker Inc all stacked their companies with family members and friends from past sketchy business ventures. DocGo seems to have set their company similarly. The company reports multiple family members of the former CEO, Anthony Capone, working within the business.
- Brother of Mr. Capone – Disclosed as a Full-time employee of DocGo as IT Project Manager
- Step-Father of Mr. Capone – Disclosed as a Full-time employee of DocGo as General Manager (LinkedIn)
- Younger Brother of Mr. Capone – Undisclosed Employee of in DocGo’s filings that reportedly manages a hotel that DocGo is using to house migrants in upstate New York.
- Note – The CEO’s younger brother is not disclosed in DocGo’s filings as a “Related Person” despite his LinkedIn declaring he worked at DocGo since 2020.
- Bonus – Affiliates of Mark Merlin (Former Chief Medical Officer) has been paid >$4.7 million in 2021 & 2022 for medical direction and supervision services after having left the company.
Insiders Liquidate ~$50 million of Stock as Founders Cost Basis is <$0.01
Insiders at DCGO have sold or gifted $49.9 million worth of stock over the last 13 months. The insider selling has continued even after the large share price decline with some insiders still selling at prices as low as $5.29.
DCGO agreed to sell 2,875,000 shares of “Founders Shares” to key executives for a mere $25,000 (S-1 pg F-17) which equates to a price of $0.0087. So insiders bought shares of the company for LESS than $0.01.
Why we think DocGo will be the next Eargo, a medical company that’s -99% since IPO:
Eargo is a hearing aid company that was a hot 2020-2021 IPO. The company got embroiled in DOJ & OIG investigations into their billing practices regarding submitting fraudulent insurance claims for patients that did not have a proper diagnosis code to support government reimbursement for their hearing aids.
Eargo’s ultimately to settled the DOJ charges and agreed to pay a $35 million settlement but not before their business was gutted. Revenue fell ~50% from peak and gross margins dropped from 70% to 40%. In Eargo’s case they also lost the ability to bill the government and insurance programs for reimbursement and ended up having to write off ~90% of their gross accounts receivable.
Eargo’s stock is -99.7%.
We believe that the Attorney General’s investigation into DocGo could likely expand from DocGo’s mistreatment of migrants and related party deals into the allegations of billing fraud, forging signatures on patient records, and changing of medical records. We think any government investigations into overbilling medicare and insurance fraud would materially impact DocGo’s future financials.
Conclusion – Short DocGo
“I think it’s a very ethical organization. We focus heavily, heavily on doing what’s right” (8:52)
~Anthony Capone – DocGo CEO that was FIRED for fabricating his resume
Former DocGo employees and lawsuits allege that the company has consistently been committing Medicare and insurance fraud. The company has been able to hide these alleged improper billing practices by routinely firing whistleblowers in the past.
DocGo’s management team and board have a history plagued with previous businesses that were charged by the DOJ with similar allegations of fraudulent billing.
Winning the NY asylum seekers contract through a “no-bid” process pushed by the NYC mayor has finally shined a light on the company’s underbelly. We believe that the on-going AG and NY state department investigations will focus on the alleged fraudulent billing issues and the forging of documents next. The result will be that DocGo will lose most of their one-time revenue boost and will return to being a low margin ambulance carrier.
Shorting DocGo comes down to a pretty simple formula
- Formers alleging insurance fraud
- Lawsuits alleging forging of documents
- Cover-Ups of Medical Mistakes
- Sketchy VIE
- Secretive Bankruptcy & Hidden Liabilities
- Rising Accounts Receivable and Declining Provisions for Doubtful Accounts
- Negative Free Cash Flow
- Management & Board connected to reverse mergers, ponzi schemes, penny stocks, and past DOJ fraud cases
- Zero Patents
- “AI subsidiary” with only 1 Estonian Employee
- NY Attorney General and NY Media investigating
= Short DocGo (DCGO)
We are short DocGo because all the red flags indicate that this ambulance business is about to crash.
Appendix A: Why Was DocGo Signing Master Lease Contracts for Hotels Months Before Winning the NYC Award?
Journalists from Project Veritas, discovered that DocGo signed a 5-year master lease agreement to rent a hotel in upstate New York for $31.2 million ($6.2 million a year) on March 1, 2023.
Two full months before DocGo was awarded the “no-bid” NYC migrant asylum contract.
There is something extremely fishy about DocGo committing an amount greater than the entire company’s free cash flow from operations in FY 2022, which was their best and only positive year of free cash flow from operations.
Appendix B – Board & Management Team’s Shady Past (Extended)
Andre Oberholzer – EVP & Former CFO – Previous Company Accused of Defrauding the Government
Andre Oberholzer (LinkedIn), who joined DocGo as CFO at the very beginning and now serves as the company’s EVP, previously worked as the VP of Finance at Altegrity from 2006-2012.
Altegrity was “accused of defrauding the federal government” (WaPo Article, Reuters). Altegrity and their subsidiary USIS were contracted to conduct background checks for federal government employees. The company allegedly instructed its employees to skip required manual reviews of the background checks and instead file the background checks as complete in order to meet financial projections and earn extra incentives.
The DOJ brought fraud charges against Altegrity (USIS) and alleged that this fraudulent business practice occurred from March 2008-September 2012 and that key finance executives and managers were aware of and engaged in this fraudulent business practice. Altegrity settled for >$30 million and then filed for bankruptcy.
Ira Smedra – Director – Nursing Homes Associated with Possible Abuse & Allegations of Submitting False Claims to the US Government
Ira Smedra, a longtime member of the Board of Directors, is the founder and president of Arba Group which owns >200 nursing homes. A nursing home database ranks the nursing homes associated with Ira Smedra as 2.6 stars out of 5 and cites 4,601 identified deficiencies at those nursing homes and notes that he is involved with “8 nursing homes associated with possible abuse”
The DOJ accused nursing homes controlled by Arba Group of “victimizing the elderly” and “misusing taxpayer funded Medicare and Medi-Cal programs” by submitting false claims to the US government. The company paid $3.8 million to settle the charges. (DOJ settlement link).
Anthony Capone – ex-CEO – Caught Lying About AI Expertise on Resume
Anthony Capone, the ex-CEO of DCGO, resigned in September 2023 after the newspaper, Times Union, discovered he was lying about having a graduate degree in artificial intelligence from Clarkson University. Capone admitted to lying about the graduate degree.
Capone would post articles to Forbes.com and emphasize to investors that DocGo stands out from the competition because of its expertise in artificial intelligence.
Norm Rosenberg – Current CFO – Connected to Platinum Partner’s & Convicted Fraudster, Mark Nordlicht
Norman Rosenberg was previously a director at Platinum Energy Resources. Platinum Energy was an OTC “penny stock” that was connected to Platinum Partner’s Mark Nordlicht who was convicted of securities fraud and defrauding investors as well as to Optionable Inc, a tiny brokerage at the center of trading scandals.
Lee Bienstock – CEO – “Fired” by Trump before working at Trumps failed Mortgage Business.
Lee Bienstock’s claim to fame is being “fired” by Donald Trump as a losing contestant on the tv show, The Apprentice. Despite losing the show Lee went to work for the Trump organization as a Vice President at “Trump Mortgage.” Articles refer to Trump Mortgage as a “failed sketchy mortgage business.” The business he was at opened in the spring of 2006 and had closed by the end of 2007. It failed within 18 months.
Chief Medical Officers’ that lack US M.D. Degrees
DocGo has had two Chief Medical Officer’s and neither of them obtained a M.D. degree from a US institution. Instead, both have degrees from either less prestigious DO schools (Dr. Mark Merlin) or Caribbean Medical Schools (Dr. James Powell)
Stan Vashovsky – Chairman & Founder – Ran a Failed Penny-Stock funded by the Second Largest Ponzi Scheme Operator
Stan Vashovsky – DocGo’s Founder, former CEO, and currently Chairman previously ran an OTC penny stock called Health Systems Solutions, Inc (OTC:HSSO) which was majority owned by entities controlled by R. Allen Stanford. HSS fell apart and was delisted once Stanford’s ponzi scheme fraud was exposed for stealing an alleged ~$8 billion of investor assets.
Members of the Board of Directors Connected to Multiple Reverse Mergers & Penny-Stocks:
Director Michael Burdiek was previously the long-time CEO and a Board Member of Cal-Amp (CAMP) now a Nasdaq listed Penny-Stock whose stock is -97% from the time he joined the company.
Director Steven Katz was involved in multiple penny stocks including as a board member of paid stock promotion 22nd Century Group (XXII) when it went through a reverse merger. XXII was exposed by Fuzzy Panda Research. Steve Katz’s resume also includes involvement as; Director and president of reverse merger penny stock Senesco Technologies (OTC:SENO); board member of pink sheets traded (OTC:HSSO); board member at penny-stock The Sagemark Companies (OTC:SKCO); board member at penny-stock USA Technologies (OTC:USAT); board member at penny stock Biophan Technologies (OTC:BIPH and fka as Greatbio technologies Inc).
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