TRANSIT OFFICIALS FEAR OVERBILLING IN RIDE PROGRAM : $530,000 IN CHARGES DISPUTED.

Byline: Patrick McGreevy Daily News Staff Writer

A city program subsidizing taxi rides for seniors and the disabled may have been bilked out of more than $500,000 last year for trips that were never taken, city transportation officials said Wednesday.

Audits of four of the 10 franchised cab companies who participate in the $20 million Cityride program have revealed overbilling that could top $530,000, and the Department of Transportation already has demanded repayment of $430,000 from one company.

Officials said complaints about widespread fraud surfaced about three years ago, when the program was only a year old, but it wasn't until last summer that an investigation was launched.

``We have a continuing investigation going on, possibly involving criminal activity,'' confirmed James Okazaki, the city's transit chief.

Okazaki said the City Attorney's Office has been brought into the investigation of possible fraud.

The department, which started the program four years ago without any plans to conduct annual audits, is giving the cab companies a chance to offer proof that the trips actually were taken.

Cityride serves about 90,000 seniors and disabled individuals who can buy $60 worth of coupons each quarter for $6 and redeem it for rides in cabs, dial-a-ride vans and Metropolitan Transportation Authority buses. Companies are paid the full value.

About 1,800 taxi drivers participate in the program where the average cab ride requires $4 in scrip and the maximum allowed per ride is $8 in coupons.

Officials sent certified letters demanding repayment from L.A. Checker Cab.

``The expanded audit shows that for the period of July 1, 1995, to June 30, 1996, Checker submitted fraudulent Cityride coupons for which we already paid Checker in the amount of $430,391,'' wrote Transportation General Manager Robert Yates on March 21.

Yates notified Checker Cab President Ali Homsi that the city has begun withholding 10 percent of its Cityride billings and may impose penalties against the company and its drivers.

Neither Homsi nor an attorney for L.A. Checker Cab returned calls.

Okazaki said similar letters are being drafted for two other companies for a total of about $100,000.

The department had in effect relied on the taxi companies to audit themselves and file reports, officials said.

Now, transportation officials say they have discovered that a significant amount of the coupons do not match ``waybills'' required to be filled out by taxi drivers for each coupon trip.

``We want to see if the trips were actually made,'' he said. ``If you have a crooked taxi driver and a crooked senior citizen, you could buy $60 in scrip for $6 and bill the city without any trip being taken. Someone could make a lot of money.''

The investigation now is trying to determine whether the problems revealed in the audits are the result of poor bookkeeping or fraud, and if fraud is involved, whether the drivers or the companies themselves are at fault.

``We've been briefed on the fact that we need to root out these problems and determine whether these are isolated actions of individual drivers or a plot to systematically defraud the city of these funds,'' said Transportation Commission President John Shallman. ``We're clearly not going to stand by and let this happen.''

Okazaki said said the current audit only covers the 1995-96 fiscal year, but other, previous years may now be audited.

Taxi firms turning in the scrip were not required also to turn in the waybills to prove that trips were taken. Instead, the firms were required to keep the waybills on file in case of an audit.

``Part of the requirement of the program was that the companies provide good data,'' Okazaki said.

Evidence of problems surfaced three years ago when a tip led to a sting operation that found someone selling about $2,000 in scrip, Okazaki said. However, that incident only led to a focused audit on one firm.

The Transportation Department then learned that some senior citizens concerned about coupons expiring at the end of the fiscal year were selling their surplus.

The city sent out a notice warning coupons could not be resold and in January started putting bar codes on coupons to make tracking easier.

City Councilman Nate Holden, who heads the council's transportation panel, said he is concerned that officials did not launch an audit earlier.

``It should be audited periodically,'' said Holden, adding he plans to have his council committee hold a hearing on the issue.