NY Times
An Armenian-American crime syndicate stole the identities of doctors and thousands of patients and used them and more than a hundred spurious clinics in 25 states to bill Medicare for more than $100 million for treatments no doctor ever performed and no patient ever received, the federal authorities announced on Wednesday.
Prosecutors said the case represented the largest Medicare fraud operation ever carried out by a single group that resulted in criminal charges. The group succeeded in stealing $35 million in Medicare reimbursements, officials said, before the charges were leveled and arrests were made on Wednesday.
The “highly organized massive scheme” is at the heart of a racketeering indictment and other charges unsealed in federal court against 44 people, including a number of members of the Armenian crime group, according to the F.B.I. and federal prosecutors in New York and Georgia.
“With 118 phantom clinics and over $100 million in bogus billings, this group of international gangsters allegedly ran a veritable fraud franchise,” Preet Bharara, the United States attorney in Manhattan, said in a statement announcing the charges. “As charged, they stole taxpayer dollars earmarked for the elderly and infirm and got away with it, until now.”
As of early Wednesday afternoon, 41 of the people accused had been arrested, 21 of them in the New York City area, and a number of others in Los Angeles and elsewhere, the authorities said. They included Armen Kazarian, whom the authorities identified as a “Vor,” a term that means “thief-in-law” and refers to a member of a select group of high-level criminals from Russia and the countries that had been part of the Soviet Union, including Armenia.
Prosecutors said that Mr. Kazarian’s arrest signified the first time a Vor has been charged in the United States with racketeering crime, and the first time since 1996 that a known Vor has been arrested on any federal charge.
The indictments (see also below) were announced at a Wednesday afternoon news conference by Mr. Bharara; Janice K. Fedarcyk, the assistant director in charge of the New York F.B.I. office; James T. Hayes Jr., the special agent in charge of the New York Office of Homeland Security Investigations; Police Commissioner Raymond W. Kelly; and other officials.
“The diabolical beauty of the Medicare fraud scheme — from the criminals’ standpoint — was that it was completely notional,” Ms. Fedarcyk said in a statement released in the early afternoon. “There were no real medical clinics behind the fraudulent billings, just stolen doctors’ identities. There were no runners or colluding patients showing up at clinics for unneeded or “upcoded” treatments, just stolen patient identities. The whole doctor-patient interaction was a mirage.”
Twenty-eight of 44 defendants were named in a racketeering indictment unsealed in New York. Additional indictments were unsealed on Wednesday in related cases by the United States attorneys in Los Angeles, Cleveland, Albuquerque, and Savannah, Ga.
The group used the stolen identities of the doctors and patients to bill Medicare for more than $100 million in nonexistent treatments over four years, according to a news release announcing the charge. And while the news release said Medicare would identify and shut down the bogus clinics after several months, in many cases “Medicare had already paid millions of dollars to the phony clinics — more than $35 million in total — and that money had already been withdrawn and sometimes transferred overseas.”
The group, official said, was aware that each clinic had a limited shelf life and would simply turn to another fraudulent clinic — they existed only on paper with an address that was usually a mail drop — operating at least 118 in 25 states including Michigan Medicare.
The racketeering indictment charges 28 defendants, including Mr. Kazarian, with crimes tied to the operation of the Armenian-American organized crime group, which it identifies as the Mirzoyan-Terdjanian Organization, a nationwide criminal operation with strong ties to Armenia. The group’s leadership is based in New York and Los Angeles, but its operations extend throughout the United States and overseas.
The indictment maintains that that the scheme operated with the assistance of, and under the protection of, Mr. Kazarian. The group’s members and associates are charged with numerous crimes, including racketeering, health care fraud, identity theft, money laundering and bank fraud. The indictment says members and associates of the organization are alleged to have used violence and threats of violence to ensure respect for and payments to its leadership.
Prosecutors said the case represented the largest Medicare fraud operation ever carried out by a single group that resulted in criminal charges. The group succeeded in stealing $35 million in Medicare reimbursements, officials said, before the charges were leveled and arrests were made on Wednesday.
The “highly organized massive scheme” is at the heart of a racketeering indictment and other charges unsealed in federal court against 44 people, including a number of members of the Armenian crime group, according to the F.B.I. and federal prosecutors in New York and Georgia.
“With 118 phantom clinics and over $100 million in bogus billings, this group of international gangsters allegedly ran a veritable fraud franchise,” Preet Bharara, the United States attorney in Manhattan, said in a statement announcing the charges. “As charged, they stole taxpayer dollars earmarked for the elderly and infirm and got away with it, until now.”
As of early Wednesday afternoon, 41 of the people accused had been arrested, 21 of them in the New York City area, and a number of others in Los Angeles and elsewhere, the authorities said. They included Armen Kazarian, whom the authorities identified as a “Vor,” a term that means “thief-in-law” and refers to a member of a select group of high-level criminals from Russia and the countries that had been part of the Soviet Union, including Armenia.
Prosecutors said that Mr. Kazarian’s arrest signified the first time a Vor has been charged in the United States with racketeering crime, and the first time since 1996 that a known Vor has been arrested on any federal charge.
The indictments (see also below) were announced at a Wednesday afternoon news conference by Mr. Bharara; Janice K. Fedarcyk, the assistant director in charge of the New York F.B.I. office; James T. Hayes Jr., the special agent in charge of the New York Office of Homeland Security Investigations; Police Commissioner Raymond W. Kelly; and other officials.
“The diabolical beauty of the Medicare fraud scheme — from the criminals’ standpoint — was that it was completely notional,” Ms. Fedarcyk said in a statement released in the early afternoon. “There were no real medical clinics behind the fraudulent billings, just stolen doctors’ identities. There were no runners or colluding patients showing up at clinics for unneeded or “upcoded” treatments, just stolen patient identities. The whole doctor-patient interaction was a mirage.”
Twenty-eight of 44 defendants were named in a racketeering indictment unsealed in New York. Additional indictments were unsealed on Wednesday in related cases by the United States attorneys in Los Angeles, Cleveland, Albuquerque, and Savannah, Ga.
The group used the stolen identities of the doctors and patients to bill Medicare for more than $100 million in nonexistent treatments over four years, according to a news release announcing the charge. And while the news release said Medicare would identify and shut down the bogus clinics after several months, in many cases “Medicare had already paid millions of dollars to the phony clinics — more than $35 million in total — and that money had already been withdrawn and sometimes transferred overseas.”
The group, official said, was aware that each clinic had a limited shelf life and would simply turn to another fraudulent clinic — they existed only on paper with an address that was usually a mail drop — operating at least 118 in 25 states including Michigan Medicare.
The racketeering indictment charges 28 defendants, including Mr. Kazarian, with crimes tied to the operation of the Armenian-American organized crime group, which it identifies as the Mirzoyan-Terdjanian Organization, a nationwide criminal operation with strong ties to Armenia. The group’s leadership is based in New York and Los Angeles, but its operations extend throughout the United States and overseas.
The indictment maintains that that the scheme operated with the assistance of, and under the protection of, Mr. Kazarian. The group’s members and associates are charged with numerous crimes, including racketeering, health care fraud, identity theft, money laundering and bank fraud. The indictment says members and associates of the organization are alleged to have used violence and threats of violence to ensure respect for and payments to its leadership.
