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Defendants Allegedly Conspired to Submit False Claims after Initial Grand Jury Indictment

December 14, 2006

Two additional defendants have been indicted by a federal grand jury in Seattle in connection with a multi-million dollar scheme to defraud Medicaid. OLEG ORDINARTSEV, 38, of Bothell, and VLADIMIR MITKOVETSKI, 48, of Bellevue, were charged in a superseding indictment with Conspiracy to Commit Health Care Fraud, various counts of Health Care Fraud, Conspiracy to Launder Money, Money Laundering, and False Statements Related to Health Care Matters. ALEXANDER D. MILMAN, 46, of Kirkland, Washington was indicted July 14, 2006 in connection with the scheme. ORDINARTSEV is an attorney who was suspended from the practice of law for two years effective November 29, 2004. Last week, MILMAN’s wife, VALENTINA M. MILMAN, 39, pleaded guilty to Conspiracy to Commit Health Care Fraud and Conspiracy to Launder Money.

According to the indictment, ALEXANDER MILMAN operated A-Z Pharmacy with locations in Bellevue, Kent and Tacoma. Beginning in May 2002, ALEXANDER MILMAN recruited Medicaid patients to use his Pharmacy by offering gift certificates for Pharmacy goods. MILMAN then created false records, including physician prescriptions and delivery receipts so that they could bill the government’s Medicaid program for drugs and medical supplies that were never delivered. MILMAN billed Medicaid for more than $1.3 million in incontinence supplies that were never delivered. Medicaid paid out more than $1.1 million on those claims. In addition, MILMAN billed Medicaid and received payment for more than $417,000 in prescription drugs that were never delivered to Medicaid patients or not needed by the patients.

MILMAN’s provider number for A-Z Pharmacy was suspended on November 10, 2004 because of the investigation into fraudulent billing. After the Medicaid suspension, MILMAN, ORDINARTSEV, and MITKOVETSKI opened a pharmacy called Lakeshore Pharmacy in Kirkland, Washington. According to the Superseding Indictment, Lakeshore Pharmacy continued to be controlled by ALEXANDER MILMAN. The conspirators falsely represented to Medicaid that MITKOVETSKI was the sole owner of Lakeshore Pharmacy in order to obtain a Medicaid provider numbers so that the pharmacies could bill the government for medical supplies and prescription drugs. The superseding indictment alleges that Lakeshore Pharmacies used the fraudulently obtained provider numbers to bill the government for more than $176,000 in medical supplies and prescription drugs. The superseding indictment further alleges that ALEXANDER MILMAN continued to commit these crimes while on pretrial release. His bond was revoked and he now is detained pending trial.

The Money Laundering counts in the indictment relate to efforts by the conspirators to hide the proceeds of the scheme and to promote the underlying fraudulent scheme. The indictment alleges that MILMAN used some of the fraudulently obtained money to make mortgage payments, for a down payment on a new home, and to buy expensive jewelry such as a Rolex watch. MILMAN concealed some of the payments for expensive jewelry, as payments for medical supplies. According to the indictment MILMAN attempted to launder some of the proceeds of the crime by transferring tens of thousands of dollars to their daughter’s bank account and then withdrawing some of the money in cashiers checks. Some of the money was then used for mortgage payments on the couple’s various residences. MILMAN, ORDINARTSEV, AND MITKOVETSKI are further charged with having conducted financial transactions with fraudulent proceeds that promoted the scheme, such as, paying rent for Lakeshore Pharmacy and A-Z Pharmacy, paying employees salaries including ORDINARTSEV, and payments for drugs for the pharmacy.

The superseding indictment also charges ALEXANDER MILMAN with Threats to Injure a Federal Law Enforcement Officer after MILMAN on September 8, 2006 threatened to assault one of the agents investigating the crimes alleged in the Superseding Indictment.

The defendants made their initial appearances on the indictment in U.S. District Court in Seattle today.

The case is being investigated by U.S. Health and Human Services Office of Inspector General (HHS-OIG), Internal Revenue Service Criminal Investigations (IRS-CI), the Food and Drug Administration (FDA), the United States Postal Inspection Service (USPIS), the Washington State Board of Pharmacy, the Washington State Attorney General’s Medicaid Fraud Control Unit, the Health and Recovery Services Administration and the Bellevue Police Department.

The case is being prosecuted by Assistant United States Attorneys Jim Lord, Peter Winn and Richard Cohen.

For additional information please contact Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110.

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