Leaders of health care fraud ring given lengthy prison sentences
The leaders of an international ring that stole identities of doctors and patients in an effort to bill Medicare for more than $40 million worth of fraudulent charges were each sentenced to lengthy prison sentences, federal law enforcement officials said.
Karen Chilyan, age 26, of Burbank, Calif., was sentenced to eight years in prison while Eduard Oganesyan, age 35, of Glendale, Calif., was sentenced to 11 years in prison.
This case was part of a nationwide a sweep in which 73 people were indicted in New York, Georgia, California and New Mexico. These people are believed to be part of an Armenian organized criminal enterprise.
“This is the new face of organized crime,” said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio. “It used to be what you saw in ‘The Godfather’ but now it’s someone with Internet access stealing hundreds of millions of dollars. This money is being sucked right out of our health care system.”
Stephen D. Anthony, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office, said: “Organized Medicare fraud of this magnitude doesn’t just defraud some faceless bureaucracy, it rips money from the wallets of our parents, our grandparents, and eventually all of us.”
“Medicare fraud schemes that involve the use of medical identity theft can have a devastating impact not only on the Medicare program itself but the lives of the people who depend on the services Medicare provides,” said Lamont Pugh III, Special Agent in Charge of the U.S. Department of Health and Human Services, Office of Inspector General. “Today’s sentencing serves as a reminder to those who would commit frauds of this nature that the OIG and our law enforcement partners are cracking down on these schemes and will ensure that proper justice is served.”
Chilyan and Oganesyan previously pleaded guilty to conspiracy to commit mail fraud, wire fraud and health care fraud. The group led by Chilyan and Oganesyan unlawfully obtained personal identifier information of medical doctors, including their dates of birth, Social Security numbers and medical licensing information, according to court records.
Beginning in 2006, Oganesyan and others then leased commercial office space to establish false front practice locations for doctors or businesses purportedly employing the doctors whose identities were stolen. These locations included offices in Canfield, Ohio.
Chilyan and others then submitted Medicare Provider Applications in the names of the doctors whose identities were stolen, according to the court records. Chilyan, Oganesyan, and others then opened bank accounts in the names of those doctors, all for the purpose of receiving the proceeds from false and fraudulent billings to Medicare, according to the court records.
The group also unlawfully obtained the identities of Medicare recipients, which they then used to submit false and fraudulent bills to Medicare for services that were never provided, according to the court records.
They submitted bills for more than $48 million worth of false services to Medicare, nearly $13 million of which were paid out, according to the court documents.
Once the ring obtained the fraudulent proceeds from Medicare, some members wrote checks from the fraudulent bank accounts and deposited them into secondary bank accounts in the names of shell businesses. The money was then deposited through checks into another series of bank accounts set up in the name of the shell companies. Those second- and third-tier accounts were designed to launder the money illegally obtained from Medicare, according to court records.
The group stole the identities of 12 doctors, including two from Ohio. They stole the identities of hundreds of Medicare recipients, including four from the Northern District of Ohio, according to court records.
This case is being prosecuted by Assistant United States Attorneys Michael L. Collyer and Robert W. Kern after an investigation by the Cleveland Office of the Federal Bureau of Investigation and the Department of Health and Human Services Office of Inspector General, Office of Investigations.
It was part of a multi-jurisdictional investigation involving more than $100 million worth of phony claims submitted to Medicare. More than 35 defendants were charged as part of this investigation in Brunswick, Georgia; New York; Los Angeles; Cleveland; and Albuquerque.