Three health care companies and ten individuals allegedly bilked the state Medicaid Program out of $10 million, Attorney General Martha Coakley said Friday, announcing 118 criminal indictments returned Thursday by a statewide grand jury and grand juries in Suffolk and Bristol counties.

One of those arrested and charged is the operator of a controversial sober house in Dorchester's Port Norfolk section. Carl Smith, the 65-year-old manager of New Horizon House LLC, is accused of participating in a drug-screening kickback scheme. He was arrested Thursday night and was arraigned Friday. Held on $30,000 bail, Smith is due back in Suffolk Superior Court on October 14.

Smith, who pleaded not guilty, recently came under fire from residents of the Port Norfolk neighborhood —as well as City Councillor Maureen Feeney and state Rep. Marty Walsh— for operating a sober home program from a house on Lorenzo Street without first consulting the community's civic association. Boston Inspectional Service workers have since investigated the property following concerns of overcrowding.

According to a court filing from the attorney general's office, Smith has a "lengthy criminal record," dating back to 1975 when he was convicted of armed robbery. He was sentenced to three to five years in state prison.

He was also convicted of kidnapping and armed robbery in 1979, larceny in 1989, forgery and embezzlement in 1991, forgery and larceny in 1994 and possession of a hypodermic needle or syringe in 1995.

“Medicare is one of the single largest budget items for the commonwealth,” Coakley said at a press conference Friday morning. “Every one of those dollars for health care should be going to our most vulnerable.”

Describing four unrelated cases, prosecutors said Adlife Healthcare, of Framingham, allegedly billed the state for medical treatment to people who were deceased. Preventive Medicine Associates, and its owner Dr. Punyamurtula Kishore, of Brookline, allegedly ran a “kickback scheme” with sober houses throughout the state.

Smith is accused of getting paid $34,000 in return for arranging the ordering of urine drug screening tests for which MassHealth paid Kishore and PMA over $786,000.

David Benson, of New Bedford, allegedly over-billed the state by making it seem as though his psychotherapy patients had more dire medical needs. Pond View Nursing Facility, in Jamaica Plain, was shut down in June 2008 for bad service, Coakley said, and its owner Carolyn Wetterberg was indicted for allegedly inflating the supposed medical needs of Pond View patients.

“They may as well be walking over to MassHealth and taking money out of the Treasury,” said Coakley about the four companies and the “separate but very serious violations of public trust.”

Asked about the extent of fraud in the massive program, Coakley said she was unable to provide a specific estimate but said, “Obviously there’s a lot.”

Adlife, an adult foster care program, is accused of the biggest fraud, amounting to $5.5 million in which the company claimed adults, who would visit during the day, were round-the-clock patients and billed the state for patients who are actually dead. Adlife had offices in West Springfield, Dorchester and Hyannis, but Adlife and the other accused companies are “not in business,” according to Coakley.

Preventive Medicine Associates was the next largest, accused of $3.8 million in unnecessary drug tests as part of a kickback scheme with sober houses in Dorchester, Malden, New Bedford and elsewhere that would contract with PMA to perform the unnecessary drug screens. Kishore, 61, was arrested at his home on Tuesday, Sept. 20. The indictment charges he and his companies with eight counts each of Medicaid kickbacks and false claims.

Benson, who ran Mitchell Counseling Services out of New Bedford, allegedly filed $160,000 in false claims with Medicaid, billing the state for “acute care” for patients receiving little if any therapy.

After the state shut down Pond View and the patients were moved to other nursing homes, many who had reportedly needed help eating and walking were able to perform both those activities without any assistance, according to Coakley, who explained the allegations of inflated levels of care.

“We do not believe there were miracles performed after those patients left that nursing home,” Coakley said.

Sharon Richardson, the 55-year-old owner of Adlife, was also arrested on Thursday night.

The other suspects – Lisa Richardson-Miles, a 36-year-old Adlife employee and Framingham resident; Kali Geddes, a 31-year-old Brighton resident who worked for Adlife; John Coughlin, a 31-year-old Carver man who operates Gianna’s house sober homes in Wareham, New Bedford and Sandwich; Thomas Leonard, a 56-year-old Malden man who co-owns and manages Marshall House sober home in that city; Wetterberg, Benson, and Kishore – will all be summonsed to court to face their charges.

MassHealth, which runs the state’s Medicaid program, was budgeted at $10.3 billion, or about a third of the state’s budget. The 118 indictments, which Coakley described as difficult and expensive to achieve, accuse the four companies of defrauding about a tenth of 1 percent of the total MassHealth budget.

Coakley said the investigation was the product of tips, some of them through her office’s Medicare Fraud Tip Line, and an investigation that followed the closure of Pond View.

The investigation was conducted by Coakley’s office, State Police, the FBI and the federal Inspector General.

Richardson was scheduled to be arraigned Friday in Framingham District Court and Smith was also scheduled to be arraigned in Suffolk Superior Court.

The AG’s tip line is 617-963-2360.

The Reporter's Gintautas Dumcius and Pat Tarantino contributed to this report.