DOJ Indicts 73 in Massive Medicare Fraud Case

Seventy-three defendants—including alleged members of an Armenian-American crime syndicate called Mirzoyan-Terdjanian—have been indicted for crimes involving more than $163 million in fraudulent billing of Medicare and insurance companies across the nation, the U.S. Department of Justice says.

The announcement came Wednesday after indictments were unsealed in California, Georgia, New Mexico, New York and Ohio. Law enforcement officials in the national, multi-agency investigation reported 52 arrests on Wednesday, in what the DOJ says is the largest prosecution of a Medicare fraud scheme committed by one criminal enterprise.

The defendants are charged with 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, DOJ alleges.

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 that submitted bogus Medicare reimbursement claims.

"The international organized crime enterprise known as the Mirzoyan-Terdjanian, fleeced the healthcare system through a wide-range of money making criminal fraud schemes," says Kevin Perkins, FBI assistant director of the Criminal Investigative Division.

"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," Perkins said. "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."

Acting Deputy Attorney General Gary G. Grinder said the emergence of the Mirzoyan-Terdjanian operation "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."

Here is the breakdown for the defendants:

* Forty-four defendants were charged in two indictments unsealed Wednesday in New York with racketeering conspiracy and conspiracy to commit: healthcare fraud, bank fraud, money laundering, fraud in connection with identity theft, credit card fraud and immigration fraud.

* Seven defendants were charged in New Mexico with healthcare fraud, mail fraud, wire fraud, money laundering conspiracy, money laundering, forfeiture and aggravated identity theft.

* Six defendants were charged in Georgia with healthcare fraud, conspiracy to commit healthcare fraud, money laundering conspiracy and aggravated identity theft.

* Six defendants were charged in Ohio with healthcare fraud, mail fraud, conspiracy to commit mail fraud, wire fraud, conspiracy to commit money laundering and aggravated identity theft.

* Ten defendants were charged in two indictments 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, and causing an act to be done.

Federal prosecutors say Mirzoyan-Terdjanian is named for its leaders, Davit Mirzoyan and Robert Terdjanian. The gang 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," which refers to a member of a select group of high-level criminals from Russia, Armenia, and other countries that had been part of the former Soviet Union. This is the first time a Vor has been charged with racketeering, and the first time since 1996 that a Vor has been arrested on a federal charge.