Information technology and data mining capabilities had a role in dismantling what authorities are calling the largest Medicare fraud scheme ever, involving 73 members and associates of organized crime and more than $163 million in fraudulent billing.
The defendants, including a number of alleged members and associates of an Armenian-American organized crime enterprise, were charged in indictments unsealed Oct. 13 in five judicial districts.
The defendants are charged by the Department of Justice with engaging in numerous fraud activities, including highly-organized, multi-million-dollar schemes to defraud Medicare and insurance companies by submitting fraudulent bills for medically unnecessary treatments or treatments that were never performed. According to the indictments, the defendants allegedly stole the identities of doctors and thousands of Medicare beneficiaries and operated at least 118 different phony clinics in 25 states.
“The emergence of international organized crime in domestic healthcare fraud schemes signals a dangerous expansion that poses a serious threat to consumers as these syndicates are willing to exploit almost any program, business or individual to earn an illegal profit,” said Acting Deputy Attorney General Gary G. Grinder.
“The Department of Justice is confronting this evolving threat here and abroad through a number of initiatives including a strengthened Attorney General’s Organized Crime Council and the creation of the International Organized Crime Intelligence and Operations Center (IOC-2) to ensure that we are focused and coordinated in our efforts to combat international organized crime,” he added.
Technology also plays a critical role in investigations.
In 2009, HHS Secretary Kathleen Sebelius and U.S. Attorney General Eric Holder launched the interagency Health Care Fraud Prevention and Enforcement Action Team (HEAT), an effort to combat Medicare fraud. HEAT would build upon and strengthen existing programs to combat fraud and invest new resources and technology to prevent fraud, waste and abuse. The program would use modern technology to complete, in a matter of days, analysis of electronic evidence that previously took months to analyze using traditional investigative tools. It would also improve data and information sharing between CMS and law enforcement to identify patterns that lead to fraud.
When he announced the HEAT initiative, Holder said: “We raise the stakes on healthcare fraud by launching a new effort with increased tools, resources and a sustained focus by senior-level leadership.”
Also, in recent years, the FBI has undertaken steps to modernize its organized crime program and enable federal law enforcement to take a unified approach to combating international organized crime, according to the agency’s 2009 Financial Crimes report.
“The international organized crime enterprise known as the Mirzoyan-Terdjanian, fleeced the healthcare system through a wide-range of money making criminal fraud schemes. The members and associates located throughout the United States and in Armenia, perpetrated a large-scale, nationwide Medicare scam that fraudulently billed Medicare for more than $100 million of unnecessary medical treatments using a series of phantom clinics,” said the FBI’s Perkins. “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.”
“Today, special agents of the Office of Inspector General working in tight coordination with our federal law enforcement partners made 52 arrests across the nation – from New York to Los Angeles – on charges including Medicare fraud and medical identity theft totaling more than $163 million,” said HHS Inspector General Daniel R. Levinson. “Criminals stealing from Medicare needn’t look over their shoulders to know that we are in hot pursuit.”
According to the charges filed in U.S. District Court in the Southern District of New York, the Mirzoyan-Terdjanian Organization is named for its principal leaders, Davit Mirzoyan and Robert Terdjanian. The leadership of the organization is based in Los Angeles and New York, and its operations extend throughout the United States and internationally.
Among the defendants charged with racketeering is Armen Kazarian, who is alleged to be a “Vor,” a term translated as “Thief-in-Law” and refers to a member of a select group of high-level criminals from Russia and the countries that has been part of the former Soviet Union, including Armenia.
This is the first time a Vor has ever been charged for a racketeering offense, and the first time since 1996 that a known Vor has been arrested on any federal charge.
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