Department of Justice seal U.S. Department of Justice

Debra Wong Yang
United States Attorney
Central District of California


United States Courthouse
312 North Spring Street
Los Angeles, California 90012
Release No. 06-034

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PRESS RELEASE

FOR IMMEDIATE RELEASE
March 21, 2006
For Information, Contact Public Affairs
Thom Mrozek (213) 894-6947

FIVE ARRESTED IN HEALTH CARE FRAUD SCHEME THAT COLLECTED AT LEAST $20 MILLION FROM MEDICARE PROGRAM


Los Angeles, CA - An Altadena couple, two of their relatives and a fifth associate were arrested this morning on federal charges related to a long-running Medicare fraud scheme that netted at least $20 million when the federal health care program paid for tests that either were unnecessary or were never performed.

A criminal complaint unsealed this afternoon details a scheme to pay kickbacks to recruit patients and to submit fraudulent billings to Medicare on behalf of medical service providers, such as medical clinics and diagnostic testing centers. The scheme is commonly called a beneficiary-sharing or patient-rotating scheme in which "marketers" obtain data about Medicare beneficiaries and sell the information to Medicare providers who engage in fraudulent billings. Some marketers known as "cappers" recruit patients with Medicare coverage to travel to clinics and receive services that are medically unnecessary, and sometimes they receive no medical services at all.

In a scheme that allegedly began in 1997, the defendants, led by Konstantin Mikhaylovich Grigoryan, conducted fraudulent activity through 12 Los Angeles-area medical providers. The providers were controlled by the defendants and purportedly conducted diagnostic tests, such as ultrasound examinations and blood tests. The medical providers allegedly generated revenue by utilizing cappers who brought in Medicare beneficiaries by car, van and bus from across California in exchange for kickbacks. Once the patients came into a physician's office, the medical providers allegedly billed the patients' Medicare numbers on the dates of their visits and on many other dates whether or not any services were in fact provided to the beneficiaries. In many cases where diagnostic testing services were billed to Medicare, according to the complaint, there was no test actually performed on the patient on the purported date of service. The conspirators would fabricate the tests so that the patients' files could withstand an audit by Medicare.

The five defendants arrested this morning are scheduled to make their initial court appearances this afternoon in United States District Court in Los Angeles. They are:

- Konstantin Grigoryan, 56, of Altadena;
- Mayya Leonidovna Grigoryan, 54, who is Konstantin's wife;
- Eduard Gershelis, 34, of Los Angeles, who is the Grigoryans' son-in-law;
- Aleksandr Treynker, 48, of Canoga Park, who is Mayya Grigoryan's brother-in-law; and
- Haroutyun Gulderyan, 36, of Tujunga.

The defendants are charged in a criminal complaint with conspiracy, health care fraud, medicare kickbacks, false statements as to a Medicare Part B provider and money laundering.

The complaint alleges that the scheme caused Medicare to pay out at least $20 million in fraudulent claims from 2000 until 2005. Much of the money was deposited into a maze of bank accounts of "management" and "consulting" companies, including a Panamanian shell corporation with a Swiss account.

A criminal complaint contains allegations that a defendant committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt in a court of law.

This case is the result of an ongoing investigation by the Federal Bureau of Investigation; the United States Department of Health and Human Services, Office of the Inspector General; and IRS-Criminal Investigation Division. The Centers for Medicare & Medicaid Services provided assistance in the investigation.

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Release No. 06-034

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