Mobsters Nabbed in Biggest Medicare Fraud Bust Ever
- Posted on October 13, 2010 at 8:57pm by
Meredith Jessup
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NEW YORK – A vast network of Armenian gangsters and their associates used phantom health care clinics and other means to try to cheat Medicare out of $163 million, the largest fraud by one criminal enterprise in the program’s history, U.S. authorities said Wednesday.
Federal prosecutors in New York and elsewhere charged 73 people. Most of the defendants were captured during raids Wednesday morning in New York City and Los Angeles, but there also were arrests in New Mexico, Georgia and Ohio.
The scheme’s scope and sophistication “puts the traditional Mafia to shame,” U.S. Attorney Preet Bharara said at a Manhattan news conference. “They ran a veritable fraud franchise.”
Unlike other cases involving crooked medical clinics bribing people to sign up for unneeded treatments, the operation was “completely notional,” Janice Fedarcyk, head of the FBI’s New York office, said in a statement. “The whole doctor-patient interaction was a mirage.”
The operation was under the protection of an Armenian crime boss, known in the former Soviet Union as a “vor,” prosecutors said. The reputed boss, Armen Kazarian, was in custody in Los Angeles.
Bharara said it was the first time a vor — “the rough equivalent of a traditional godfather” — had been charged in a U.S. racketeering case.
Kazarian, 46, of Glendale, Calif., and two alleged ringleaders — Davit Mirzoyan, 34, also of Glendale, and Robert Terdjanian, 35, of Brooklyn — were named in an indictment charging racketeering conspiracy, bank fraud, money laundering and identity theft.
The indictment accused Terdjanian and others of hatching other schemes involving stolen credit cards, untaxed cigarettes and counterfeit Viagra. It also alleges that during a meeting last year at a Brighton Beach restaurant, Terdjanian pulled a knife on someone who owed him money “and threatened to disembowel the individual if the debt was not paid.”
A judge jailed Terdjanian without bail on Wednesday at a brief hearing. Afterward, his attorney said his client denies the charges.
Kazarian and Mirzoyan were scheduled to appear in court Wednesday in Los Angeles.
Authorities began the New York-based investigation after information on 2,900 Medicare patients in upstate New York — including Social Security numbers and dates of birth — were reported stolen.
The defendants in the New York case also had stolen the identities of doctors and set up 118 phantom clinics in 25 states, authorities said. The names were used to submit fake bills for care that was never given, they said.
Some of the phony paperwork was a giveaway: It showed eye doctors doing bladder tests; ear, nose and throat specialists performing pregnancy ultrasounds; obstetricians testing for skin allergies; and dermatologists billing for heart exams.
In the New York portion of the case, more $100 million in fraudulent bills were submitted and Medicare paid out at least $35 million, sometimes by wiring it to the clinics’ banks accounts, investigators said.
Most of the defendants “were Armenian nationals or immigrants and many maintained substantial ties to Armenia” and criminals there, the indictment said. Couriers would often carry cash proceeds from the fraud back to Armenia, it added.
Prosecutors were seeking forfeiture of real estate in Las Vegas; Palm Springs, Calif.; and elsewhere, and of a 2007 Maserati and a 2006 Jaguar.
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Comments (61)
alshere
Posted on October 14, 2010 at 1:40amMedicare is a government run system that is set up to be a perfect vehicle for scams and fraud because. The government has made this system so complicated that all fraud hides itself and when fraud is found it takes forever for the perpitrators to come to justice and the penalties are not severe enough to dicourage it.When people are on the dole they compound the problem by not turning the fraud because it may upset thier piece of the dole. What also compounds the problem is, the people who are using Medicare and are disabled not retired. Medicare was set up for the elderly. As with Social Security time has mellowed the system and it now derected to do more than it was intended. Disabled persons should be on Medicade which is funded state wide, but it too is funded by Uncle Sugar. Thank goodness they uncovered the fraud and have seen its manetude but it is only the tip of the iceburg. There has to be stricter screening of recipiants and it must be subject to closer monitoring.
Report Post »RestoreCapitalism
Posted on October 14, 2010 at 1:38amWell we can see from this that Obamacare really would create jobs… for criminals!
Report Post »Rob_M
Posted on October 14, 2010 at 1:29amConsidering the fraud and inefficency that plagues it this saving will buy what? Two wheelchairs? But this is still a good thing anyways so this is still nice.
Report Post »jagr1850
Posted on October 14, 2010 at 12:31amNow the govt must get back the money that was paid in the fraud…..
Report Post »starman70
Posted on October 14, 2010 at 10:50amGOOD LUCK!!!! Bet they won’t.
Report Post »hungerymedstudent
Posted on October 14, 2010 at 12:22amMedicare creates an environment for abuse.
Report Post »neverending
Posted on October 14, 2010 at 12:19amIs there fraud in medicare – no doubt about it but can we really believe this is any more then another game of obamas so he can say “see I told you we would help pay for the healthcare bill by cleaning up medicare”???? The guy is one game after the another and one lie after the other.
Report Post »1994bobbysgirl
Posted on October 13, 2010 at 11:48pmYippee! They just funded govt health care.
Report Post »KL
Posted on October 13, 2010 at 11:37pmArmenians? No doubt funneling ‘stolen’ money to terrorists.
Report Post »iFaithe
Posted on October 14, 2010 at 10:48amThat’s BS, name a terrorist organization operating out of Armenia now. They sent some money there, but Armenia is an economically struggling Christian country surrounded mainly by Islamic foes. These guys are crooks, but get a perspective.
Report Post »chubbzbar
Posted on October 13, 2010 at 11:26pmInteresting — whenever government gets involved fraud follows very quickly — if Medicare was a privately administered and funded program, which it could be, I don’t believe it would be so full of fraud — just saying.
Report Post »JGP
Posted on October 13, 2010 at 11:08pmIt’s good to see a federal agency doing a good job, or did these guys just not contribute enough to the DNC?
Report Post »spendthrift
Posted on October 13, 2010 at 10:56pmNow that’s government at work for the people and by self-interest…..
Report Post »enufisenuf
Posted on October 13, 2010 at 10:29pmI know this wont be popular but what the hell, Amnesty for everybody!!!!!!!!
Report Post »Extermely efficient Gov that helps protect this country. I am ashamed!!!! :(
rdk
Posted on October 13, 2010 at 10:18pmIs there no way to check whether the doctors are real?
Report Post »spirited
Posted on October 13, 2010 at 10:43pm“The defendants in the New York case also had stolen the identities of doctors and set up 118 phantom clinics in 25 states, authorities said. The names were used to submit fake bills for care that was never given, they said.”
Report Post »starman70
Posted on October 14, 2010 at 10:46amAgain, Government beureaucrats just process paperwork. They make sure each appropriant box is filled in and every “I” is dotted and every“T” is crossed. Now you see why Amtrack, the Post Office, Medicare, Social Security and just about every attempt by the government to run a business is BROKE.
Report Post »asmith
Posted on October 13, 2010 at 10:07pmAmerica should be ashamed. We are literaly giving our hard working money to criminals. Medicare doesn’t work. Do we know if these guys are funneling money to terrorists? We need to be more friendly to law abiding citizens and hard as nails on law breakers. I’m talking hard labor here.
Report Post »gumgardner
Posted on October 13, 2010 at 9:59pmThese so called “Gangsters” should be applauded! They are the essence of Obama’s economic stimulus at work. They are simply aiding in redistributing the nations wealth to its rightful owners. If you calculate the ACTUAL jobs created by Obama’s economic program, theses “patriots” are fairing much better in cost per job created. About $2.3 million per job ($167M/ 73 arrested), I believe we should have most of them selected to the White House Board on Economic Policy!!!!!
Report Post »starman70
Posted on October 14, 2010 at 10:39amNot only did they participate in distributing our nations wealth, they transferred much of the money overseas in order to lift the living standards of those receiptants. The United Nations would be overjoyed!
Report Post »txfirehawk
Posted on October 13, 2010 at 9:43pmGovt workers are not worried about fraud. Remember, we owe it to some people to hand out fish, not teach them how to catch them. Some would rather take handouts instead of hand ups.
Report Post »ReGul
Posted on October 13, 2010 at 9:41pmIt’s great news…criminals will be brought to justice. Scary….but how many more scams do you think are going on undetected?
Report Post »grandmaof5
Posted on October 13, 2010 at 9:39pmDoes it seem strange that New York seems to be the target of illegal activity? Perhaps if it wasn’t run by a slacker, if Rudy was still running the show and wasn’t in bed with Islam and anyone else with a fat check book, things would be different. Crooks in government and unions probably play a big part in the availability of illegal activity in NYC. Can’t figure out why they are in financial trouble……..
Report Post »RobertCA
Posted on October 13, 2010 at 9:39pmNice bust , keep them coming there’s still a lot of them operating .
Robert .
Report Post »uneedmorekoolaid
Posted on October 13, 2010 at 9:38pmhmm with all that money and they didn’t buy a chevy volt or nissan leaf. that is why obama picked them up, they werent listening!
Report Post »Ronko
Posted on October 13, 2010 at 9:36pmoh brother why do people do stupid stuff like this they’re going to get caught. I bet the president when talking about Obamacare will tout this and say “this is why we passed the bill into law, to stop those greedy fat cats from getting more money
Report Post »starman70
Posted on October 14, 2010 at 10:01amThat’s what he will say. However, Obamacare, just like Medicare well be handled by a bunch of inefficient bureaucrats whose job is to process paperwork, not question the origin and veracity of it. Robots could do the same job. After all, all the robot would have to do is stamp it approved.
Multiply the number of Medicare receiptants by the number of potential Obamacare receiptants and you will come up with a close approximaion of the number of fraud possibilities.
Report Post »Okpulot Taha
Posted on October 13, 2010 at 9:16pm“Medicare paid out at least $35 million”
Why? How was this fraud missed by Medicare workers?
Okpulot Taha
Report Post »Choctaw Nation
WISEPENNY
Posted on October 13, 2010 at 9:24pmWatching porn sites on the government computers?
Report Post »RobertCA
Posted on October 13, 2010 at 9:36pmBingo !!!!!!!!!!!!!!!!!!
Report Post »Okpulot Taha
Posted on October 13, 2010 at 9:46pmWISE PENNY quips, “Watching porn sites on the government computers?”
Suppose I should cleanup my web site.
This $35-million is a lot of claims. I would think at least one claim out of thousands would raise a red flag somewhere in a government office cubicle. This leads me question how much fraud is being missed and why this problem is not more aggressively addressed.
A comparison is should I make a ten cent error on our tax returns, three years later the IRS will send me a bill for ten cents unpaid taxes plus $1,525,334 in penalties and interest. Our IRS never misses anything. My web site must not be popular with IRS agents.
Okpulot Taha
Report Post »Choctaw Nation
janddjohnson
Posted on October 13, 2010 at 10:52pmLMAO at WisePenny.
Report Post »Capt_Jack
Posted on October 13, 2010 at 11:08pm“how could Medicare workers miss this fraud?”
Report Post »My first thought exactly…
Contrarian51
Posted on October 13, 2010 at 11:24pmIs “Medicare workers” am oxymoron? If you’ve never had to call or deal with Medicare, consider yourself lucky. Half the phone numbers on their correspondence don’t work, or have limited options (for such and such press 1, etc) and if no messaging capabilities, and when you finally do talk to someone you get told either to send a letter or they’ll send you a form but that anything they need to send you could take up to 60 days, in other words, don’t call us asking for a case status.
Thankfully, due to Obamacare, I may not have to wait until I’m 65 to deal with this crap on my own behalf. Can’t wait.
Report Post »bookofwisdom
Posted on October 14, 2010 at 11:23amA lot of fraud is missed because a large number of the people hired do not understand English. It is not their native language. I just hope and pray that when Obamacare takes over my doctor doesn’t quit his practice. He‘s the best I have ever had and I’ve never felt better. What I don’t understand is how these people from a foreign country could come to the U.S. and start a business and nobody checked to see if it was legitimate…(?) May God Bless.
Report Post »leftylemn
Posted on October 13, 2010 at 9:13pmAnd the fraud will explode with Obamacare.
Report Post »BoilitDown
Posted on October 13, 2010 at 9:44pmLEFTYLEMN: Exactly my first thought and what I’ve been saying since the introduction of Obamacare. I’ve seen many fraudulent actions by doctors, hospitals and medical equipment providers on Medicare with my mother alone. I could see the expansion of corruption available through Obamacare. It threw the doors open to crooks and they’re just drooling at the prospects.
Report Post »A basic truism applies, “The larger the bureaucracy the more open it is to fraud and abuse”. This is the most basic reason to fight for limited government. It’s just a no-brainer.
GardenoftheGods
Posted on October 13, 2010 at 9:47pmI’m with you…from talking to my Doctors & their billing people…things are going to get VERY, VERY BAD; which will slow our healthcare system down to a crawl & therefore prevent more and more of us from getting the necessary care in a timely fashion. Goodbye Seniors, Disabled & Handicapped “folks” (a la obama); hello lines, wait lists & death panels. And to think in 1992 I had to wait 9 months to see a Rhuematologist…wonder how long new patients will wait in 2012! Repeal it!! Tell your Congresspeople today, tomorrow and every day until they DO it! God Bless!
Report Post »Ippster
Posted on October 13, 2010 at 9:12pmSo, If they can nab these creeps, WHY NOT Bin L ? Why, NOT SEND SPECIAL FORCES IN AND WHACK THE HEAD OFF IRAN AHMADINAJADE ?
Report Post »Then go after Pelosi, and Harry. WE CAN DO THESE THINGS IF the MUSLIM LOVER OBAMA AND CONGRESS WOULD UNTIE OUR MILITARYS
HANDS..
barbaraw62
Posted on October 13, 2010 at 10:00pmCould your violent tendencies be curbed…… Anger must be redirected to do good and pray….. Let the law take care of these zeros and users. There is much corruption and we must “remember who we are” and fight the battle with intelligence!
Report Post »neverending
Posted on October 14, 2010 at 12:20amTotally agree
Report Post »Contrarianthinker
Posted on October 13, 2010 at 9:06pmI believe from my personal experience with Medicare doctors in FL when my Dad was essentially a vegetable that hiring attorneys/investigators to closly go back and check charges that for every $1 spent to do this would reep $10 in recovery plus putting the cheaters in the public areana and in jail.It is estimated that $60 BILLION are lost to fraud each year. That means we could spend $6 billion to catch these cheats and let anyone trying it or thinkking of trying it to run away like raiches having the light shined on them
Report Post »snowleopard3200
Posted on October 13, 2010 at 11:19pmPresident Obama does not seem to like talking about crime in health care; for a simple reason that unlike these crooks (too polite a title in my opinion) mirror his actions only on a smaller scale. The actions of Mr Obama and his allies of the Progressives have been to rob, rape and pillage America to death and transform our great REPUBLIC into something totally unrecognizable.
If it takes 1.00 spent to recover or smash up a ring for every 10.00 of fraud then that sounds like a more than fair rate of return. Yet somehow I have to wonder just how that these prosecutions are coming just in time for the election.
How long until Mr. Obama decides the current mortgage fiasco will require direct intervention by the federal government and we see all the homes seized for good by them. Of course they will say that is for something like the “collective good” of American stability.
http://www.artinphoenix.com/gallery/grimm (mixed art)
CultureWarriors
Posted on October 14, 2010 at 8:41amOn a much smaller scale, my mother in law recently received a notice from medicare about procedures that were billed on her behalf, the only problem was she hadn’t been to that doctor in a couple years. It seems it happened with some other patients of his because he’s now being investigatedfor fraud. My point is if anyone sees mistakes, point them out medicare. They could be mistakes or they could be out and out fraud. We have to help out if we want to reduce fraud.
Report Post »chatmandu002
Posted on October 14, 2010 at 2:37pmI wonder if they are going to be deported.
Report Post »Compete or Lose
Posted on October 14, 2010 at 8:16pm.
.
.
.
This type of fraud is so easy to fix–you notice that it doesnt happen in the case of private insurance companies.
The fix is that any Medicare vendor must first go through a substantial vetting to prove up their operations–physically inspect the facility, meet the doctors, review their licenses and require them to post a surety bond of $1 million. Not too much to ask. Next all submissions for payment are subject to random review. New vendors must have the first $5million of claims audited. Any doctor found to have committed fraud would be banned for life and if they associated with any clinic the clinic would not be eligible.
These simple steps would make medicare fraud very difficult and would insure that medicare funds are paid for the benefit of seniors.
QED
RGS
Report Post »GrannyBeth
Posted on October 15, 2010 at 1:54amMedicare itself is a fraud. Everyone mistakenly thinks it’s about “health care” for patients. It’s a “plan for PAYING doctors/hospitals. The fact is, Medicare recipients suddenly find themselves relegated to medical care provided by Quacks OR if they are lucky — their card gets stolen and used to defraud the fraud itself.
Is Medicare worth what it costs the patients? Nope. That junk costs me over $1200 a year (for garbage such as “instructions about Diabetes” and flu shots” and my medical care actually only costs me around $90 to $124 a year without Medicare.
If the government is getting screwed on this deal, they have it coming.
Next time the government decides “to fix” Medicare, maybe they will think twice about handing patients pure slop and doctors/hospitals the gold. If the only people who are willing to step up to the plate to expose Medicare are the hoodlums, hey — I’m not going to complain. It’s just one batch of criminals going after another batch of criminals.
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