Mammoth Medicare fraud bust targets organized crime group

In what has been deemed the "largest Medicare fraud scheme ever perpetrated by a single criminal enterprise," 73 people--including members of an Armenian-American organized crime syndicate--were charged Wednesday with submitting to Medicare more than $163 million in phony bills from 118 non-existent medical clinics spanning 25 states. The scam, which started in 2006, netted the participants nearly $36 million. 

Stolen identities from both doctors and patients were used in the reimbursement requests, reports the Wall Street Journal, including 2,000 from New York-based Orange Regional Medical Center alone. However, many of the bills submitted didn't even bother to take into account which types of doctors were performing which procedures. For example, the newspaper reports, one bill submitted was for an eye doctor who performed bladder tests; other bills involved patient visits to doctors who conduct autopsies. 

"The international organized crime enterprise known as the Mirzoyan-Terdjanian, fleeced the healthcare system through a wide-range of money making criminal fraud schemes," Kevin Perkins, FBI Assistant Director of the Criminal Investigative Division said in a statement released by the Department of Justice. "We want to restore the confidence in the nation's healthcare system and assure practitioners we will not stand by and let their identities be used for criminal gain." 

According to the release, the indictments include: 

  • 44 defendants charged in New York with racketeering conspiracy and conspiracy to commit healthcare fraud, bank fraud, money laundering, fraud in connection with identity theft, credit care fraud and immigration fraud.
  • Seven defendants charged in New Mexico with healthcare fraud, mail fraud, wire fraud, money laundering conspiracy, money laundering, forfeiture and aggravated identity theft.
  • Six defendants charged in Georgia with healthcare fraud, conspiracy to commit healthcare fraud, money laundering conspiracy and aggravated identity theft.
  • Six defendants charged in Ohio with healthcare fraud, mail fraud, conspiracy to commit mail fraud, wire fraud, conspiracy to commit money laundering and aggravated identity theft.
  • 10 defendants charged in California with conspiracy to commit bank fraud, bank fraud, money laundering, conspiracy to launder monetary instruments, criminal forfeiture, aggravated identity theft, aiding and abetting. 

Mirzoyan-Terdjanian also allegedly masterminded a similar fraud scheme involving staged car accidents and false claims to private insurance companies, notes the Journal

To learn more:
- here's the DOJ press release
- read the Wall Street Journal article

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