Jerayr Rostamian And His Company Sentenced For Structuring Financial Transactions To Avoid Reporting Requirements And Conspiracy To Commit Money Laundering
Dana J. Boente, U. S. Attorney; Michael Anderson, Special Agent in Charge, Federal Bureau of Investigation; Mike Fields, Department of Health and Human Services, Office of Inspector General; Fred Duhy, Louisiana Department of Justice’s Medicaid Fraud Control Unit, and Gabriel Grchan, Special Agent in Charge, Internal Revenue Service-Criminal Investigation announced today that JERAYR ROSTAMIAN, age 50, from Northridge, California, was sentenced today to 40 months incarceration and fined $250,000 by U. S. District Judge Lance M. Africk after previously pleading guilty to structuring monetary transactions to avoid reporting requirements. In addition to the term of imprisonment, Judge Africk ordered that ROSTAMIAN be placed on three years of supervised release following his term of imprisonment, during which time the defendant will be under federal supervision and risks an additional term of imprisonment should he violate any terms of his supervised release. The corporation ROSTAMIAN owned, MED-TECH TECHNOLOGIES, INC., was sentenced today to five years probation and restitution in the amount of $3,722,480 to be paid to Medicare and Medicaid. MED-TECH TECHNOLOGIES, INC. previously plead guilty to a conspiracy to commit money laundering. Additionally, Judge Africk ordered MED-TECH’s assets forfeited.
According to court documents, MED-TECH participated in a criminal organization for the purpose of fraudulently billing Medicare and Medicaid. Recruiters found patients to bring to a series of medical clinics located in the greater New Orleans area for medical tests that were not performed and not medically necessary. The clinics' patients were moved between the various clinics and repeatedly perform the same unnecessary tests. The patients received prescriptions for drugs, usually narcotics, for their cooperation, and the recruiters were provided cash and prescription drugs for their services.
Once Medicare and Medicaid paid the clinics, MED-TECH TECHNOLOGIES, INC., engaged in a series of financial transactions designed to disguise the fact that the money had been obtained unlawfully and to hide the funds from Medicare and Medicaid. In particular, the clinics regularly and routinely purchased used medical equipment from MED-TECH. The prices the clinics paid for the used medical equipment was significantly more than the value of the medical equipment. Often brand new medical equipment could have been purchased for much less than the medical clinics paid MED-TECH for the used equipment. The clinic owners also paid exorbitant repair fees to MED-TECH, supposedly to repair the outdated equipment. For example, the clinics paid MED-TECH over $165,000 for an outdated machine that was worth less than $5,000. In total, MED-TECH laundered approximately $3.7 million for the clinics between January 2009 and April 2011.
After the fraudulent funds from the Louisiana-based clinics were deposited into bank accounts, ROSTAMIAN withdrew much of the funds in cash, in amounts just below the threshold that would trigger the bank to file a report with the government. ROSTAMIAN’S structured cash withdraws of the money he received from the clinics were designed to avoid federal transaction reporting requirements, in violation of federal law.
“This case should serve as a reminder that the New Orleans-based health care fraud law enforcement team will expand its reach well beyond the Louisiana borders, as necessary, to bring those individuals who defraud Medicare and Louisiana Medicaid to justice,” stated Michael Anderson, Special Agent in Charge, Federal Bureau of Investigation.
“IRS Criminal Investigation is committed to unraveling complex financial transactions and money laundering schemes,” stated IRS Special Agent in Charge Gabriel Grchan of the New Orleans Field Office. “There is a price to be paid for engaging in fraud schemes and Mr. Rostamian will now be held accountable for his actions.”
“Today's guilty pleas are part of an ongoing effort by HAS-OIL and our federal law enforcement partners to bring to justice those who prey on our elderly for financial gain. Our highly trained and motivated HAS-OIL special agents are combining cutting-edge fraud detection and analysis technology with old fashioned police work to protect and preserve the Medicare program,” added Mike Fields, Special Agent in Charge, Department of Health and Human Services, Office of Inspector General.
Louisiana Attorney General Buddy Caldwell said, “This aggressive multi-agency effort has dismantled a significant health care fraud operation and sends a clear message to those who rob taxpayer dollars and exploit vulnerable residents that depend on Medicaid and Medicare for care.”
ROSTAMIAN and MED-TECH are the most recent defendants in the scheme to be sentenced. Eleven individuals and six corporations have already pleaded guilty to various parts of this scheme, which resulted in approximately $21,885,000 in fraudulent Medicare and Medicaid billings.
The investigation was conducted by Special Agents of the Federal Bureau of Investigation; the U. S. Department of Health and Human Services, Office of Inspector General; the Louisiana Department of Justice, Medicaid Fraud Control Unit and the Internal Revenue Service-Criminal Investigation. The case was prosecuted by Assistant U. S. Attorneys Patrice Harris Sullivan, Jordan Ginsberg and G. Dall Kammer.