2010 Medicaid fraud
In a scandal involving a case to defraud the Medicaid and other healthcare programs such as Medicare, providing health care to senior citizens and elderly, in the amounts totalling $163 million, more than 50 ethnic Armenians living in the United States were arrested on October 13, 2010. The operation was run by more than 400 FBI agents. In additional to FBI, IRS and local enforcement agencies in California, Georgia, New Mexico, New York and Ohio were involved in the probe. The Justice Department already indicted 73 individuals in New York and four other states. 44 defendants were indicted in New York, along with 10 in California, seven in New Mexico, six in Ohio and six in Georgia. According to the authorities, the Armenian-American organized crime group operated across 25 states.
Leadership and members of the organization
According to the authorities, the individuals acted within an organized crime enterprise run by Armen Kazarian (nicknamed "Pzo"), 46, a political asylum holder who arrived in the US in 1996 and resided in Glendale, California. The other alleged ringleaders, Davit Mirzoyan, 34, also from Glendale and Robert Terdjanian, 35, from Brooklyn were also indicted. The authorities said most members of the organization were Armenian nationals or immigrants, and many maintained substantial ties to Armenia. The suspects have been allegedly laundering the stolen money. Kazarian was allegedly on top of maintaining the criminal organization and its activities. He used conventional extortion and racketeering methods. Prosecutors said that Kazarian travelled to New York to erase a $200,000 debt of one associate to another. When the second associate was unable to pay the fee of $100,000 for that service, his yacht was seized by Kazarian.
Kazarian was in close relations with the top government officials in Armenia. In 2008, Kazarian presented a Mercedes Benz automobile to Armen Yeritsyan who was the vice-chief of Armenian police and is currently the Minister of Emergency Situations of Armenia. As well, he had close ties with Gagik Tsarukyan, the chairman of Prosperous Armenia Party, who arranged Kazarian's safe entry to Armenia. Kazarian had also a joint business with Sashik Sargsyan who is the brother of president of Armenia Serzh Sargsyan. He was seen attending the wedding of son of former president of Armenia Robert Kocharian.
In the state of Georgia, six people, Arthur Manasarian, 58; Gegham Sargsyan, 56; Khoren Gasparian, 27; Sahak Tumanyan, 43, and his wife, Hasmik Tumanyan, 38; and Toni R. Lowery, 27, five of them being ethnic Armenians were indicted for opening, operating and filing false claims to defraud Medicaid from five fake clinics in Brunswick, Savannah and Macon such as "Brunswick Medical Supply Inc". Sargsyan and Gasparian have escaped and believed to have possibly left the country. One of the highest amounts of the stolen taxpayer money is attributed to the state of Ohio, where the criminals of the organization billed the state for $44 million of which $20 million was paid out. All six charged with the crime by Ohio authorities are ethnic Armenians: Karen Chilyan, Eduard Oganesyan and Arus Gyulbudakyan aka Fina Markova the leader of Ohio ring have already been apprehended while Lilit Galstyan, Julieta Ghazaryan and Marine Movsisyan are still at-large. Lead Special Agent Figliuzzi with the FBI said, "They're ripping off our grandparents, our parents, and ultimately, all of us who will be involved in the Medicare system."
According to authorities, the investigation started after they received reports about theft of personal information, including Social Security numbers of 2,900 Medicare patients in upstate New York. The government claimed the group billed Medicare from phantom clinics for unnecessary medical services, or for services which were never performed, by stealing identities of both doctors and patients. According to officials, about $35 million of the bills claimed by the network was paid out by Medicaid already. A total of 118 medical clinics in 25 states were used to defraud the US health insurance program. One of the fake clinics was run from a small office over Coney Island auto body shop. Two Queens doctors and a worker at the Lutheran Hospital in Brooklyn were part of the gangster network. The U.S. District Attorney for the Southern District of New York, Preet Bharara, declared that the Mirzoyan–Terdjanian organization, an Armenian-run syndicate in New York and Los Angeles, used threats, intimidation and violence, operating in classic mafia style. Bharara said "This Armenian group allegedly employed a raft of rackets, extortion, credit-card fraud, identity theft, immigration fraud, and even distribution of contraband cigarettes and stolen Viagra" The penalties range from 10 years to life in prison. The defendants will be tried in the states where they have been indicted.“Organized Medicare fraud of this magnitude doesn’t just defraud some faceless bureaucracy, it rips money from the wallets of our parents, our grandparents, and eventually all of us,” Figliuzzi said.
“Identity theft now poses a serious threat to the Medicare program,” Pugh said. “As today’s indictments and arrests demonstrat, OIG is committed to combating crime rings perpetrating these schemes.”
Those indicted in U.S. District Court in Cleveland are: Karen Chilyan, age 25, of Burbank, Calif.; Eduard Oganesyan, age 34, of Glendale, Calif.; Lilit Galstyan, age 47, of Encino, Calif.; Arus Gyulbudakyan, age 30, of Woodland Hills, Calif.; Julieta Ghazaryan, age 48, of Glendale, Calif. and Marine Movsisyan, age 43, of Studio City, Calif.
The charges include one count of conspiracy to commit mail fraud, wire fraud and health care fraud; 12 counts of mail fraud; five counts of wire fraud; four counts of health care fraud; three counts of aggravated identity theft and one count of conspiracy to commit money laundering.
Chilyan, Oganesyan and Gyulbudakyan were arrested this morning. Galstyan, Ghazaryan, and Movsisyan remain at large.
"Today's indictments should send a strong message to those who think that they can game our country's healthcare system and steal taxpayer dollars that had been earmarked for our nation's elderly." Preet Bharara, U.S. district attorney for the Southern District of New York
On July 8, 2011, the leader of the criminal network Armen Kazarian pleaded guilty to racketeering charges. He could face up to 20 years in prison. Sentencing was scheduled for 6 October 2011.
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