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    United States Attorney's Office
    Central District of California

    Thom Mrozek
    Public Affairs Officer

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    Release No. 07-160

    December 18, 2007


    The owner of a Pasadena-based outfit that recruited patients to receive home health care in a scheme that defrauded Medicare out of more than $7 million has been sentenced to 120 months in federal prison.

    Arthur Pilavyan, 33, of Altadena, was sentenced Monday afternoon by United States District Judge Stephen V. Wilson, who also ordered Pilavyan to pay $7,043,857.31 in restitution to Medicare.

    Pilavyan pleaded guilty in July to health care fraud, conspiracy and money laundering. When he pleaded guilty, Pilavyan admitted that over the course of about 18 months, he caused the submission of fraudulent claims to Medicare in excess of $8 million. Medicare paid $7 million of the claims, and almost $4 million went to Pilavyan.

    Pilavyan operated as a “capper” who recruited Medicare beneficiaries to receive home health services. Pilavyan admitted in his plea agreement that he conspired with Lourdes Perez, the owner of Provident Home Health Care Services in Eagle Rock, who is currently serving a 46-month prison term (see:

    According to Pilavyan’s plea agreement, he recruited Medicare beneficiaries who were willing to sign up for home health services, inducing some to accept services by paying them approximately from $100 to $400 in cash. After signing up the Medicare beneficiaries, Pilavyan would refer them to Provident Home Health Care Services, which paid Pilavyan approximately $1,200 to $1,700 per Medicare beneficiary for those that received intermittent care and approximately $4,800 per Medicare beneficiary for twice-a-day care. The Medicare beneficiaries were not confined to the home and did not need skilled nursing or therapy services.

    Pilavyan also admitted that, in an effort to conceal payments he was receiving from Provident, he directed Perez to make some payments in cash and others in checks that were made out to other entities.

    In sentencing Pilavyan yesterday, Judge Wilson said the defendant’s conduct “corrupts a program designed to help the poor.” The judge added: “He’s damaging millions of people who need Medicare and government services.”

    IRS-Criminal Investigation Special Agent in Charge Debra D. King stated: “The sentence of 10 years in prison in this case should speak volumes to those individuals who choose to undermine the integrity of our federal healthcare systems. IRS Criminal investigators are highly skilled in tracing financial transactions that lead to exposing money laundering. IRS-Criminal Investigation will continue to work with our law enforcement partners in combating healthcare fraud.”

    This case is the result of a joint investigation conducted by IRS – Criminal Investigation and the Federal Bureau of Investigation.


    Release No. 07-160
    Return to the 2007 Press Release Index