In a July New York Times report, migrants in DocGo’s care said they had been misled to believe the company would help them find work and endured threats from its hired security forces. Meanwhile, DocGo CEO Anthony Capone resigned in September after the Albany Times Union revealed he had misrepresented his college education.
State Attorney General Letitia James launched a probe into DocGo this summer, and City Comptroller Brad Lander began a “real-time audit” of the contract in September.
Investors said in the lawsuit that DocGo bears responsibility for the ensuing stock-market losses. For one, they accuse DocGo of exaggerating the effectiveness of its health and medical transportation services, pointing to an August earnings call where Capone reassured investors about the “high-quality health care” it continued to provide despite mounting scrutiny.
Plaintiffs also fault DocGo for failing to fully vet job candidates, leading to Capone’s embarrassing ouster and “disruptive executive turnover,” the plaintiffs allege.
The listed defendants include Capone and Lee Bienstock, DocGo’s president and its current CEO. The suit alleges that all of the defendants had knowledge of the false information in the company’s public statements and “acted with reckless disregard for the truth.”
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The suit’s lead plaintiff—and the only one named so far—is Joe Naclerio, who bought 500 shares in DocGo between November 2022 and March 2023. But the suit says that “hundreds or thousands” of additional investors who suffered similar losses may still be identified.
Representatives for DocGo did not immediately respond to requests for comment.
The ongoing trouble for one of the city’s top migrant vendors comes as asylum-seekers continue to pour into New York, putting further strain on its budget and safety net. Within days, the city is expected to finally open a 2,000-person relief center at Floyd Bennett Field in Brooklyn after lengthy negotiations with the federal government, which owns the property.
The Adams administration has also reportedly ramped up its efforts to direct migrants to other cities by offering one-way plane tickets to destinations of their choice. A new “reticketing center” opened this month in a former East Village school building, although some migrants directed there were turned away and offered little help, The City reported.
This story first appeared in Crain's New York Business.
