KIRKLAND MAN SENTENCED TO LONGEST PRISON TERM FOR HEALTH CARE FRAUD EVER HANDED DOWN IN WESTERN WASHINGTON
Owners of A-Z Pharmacy Billed Government for Medical Supplies and Drugs That Were Never Delivered
ALEXANDER D. MILMAN, 47, of Kirkland, Washington, was sentenced today in U.S. District Court in Seattle to 63 months in prison, three years of supervised release and $1,694,241 in restitution for Conspiracy to Commit Health Care Fraud. The prison sentence is the longest ever imposed in the Western District of Washington for Health Care Fraud. MILMAN owned A-Z Pharmacy with locations in Bellevue, Kent and Tacoma, and was the secret owner of Lakeshore Pharmacy in Kirkland. The restitution amount is the amount paid by Medicaid for fraudulent bills submitted by MILMAN's Pharmacies. At sentencing U.S. District Judge James L. Robart noted that “there was a sophisticated means of fraud involved,” and it continued even when MILMAN knew the government was investigating. MILMAN is “a person who was deeply involved in a fraud that does not speak well of his underlying character,” Judge Robart said.
According to documents filed in the case, MILMAN and his wife, Valentina M. Milman, 40, recruited Medicaid patients to use their Pharmacy by offering gift certificates for Pharmacy goods. The MILMANs 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. The MILMANs billed Medicaid for more than $1.7 million in medical supplies and prescription drugs that were never delivered to Medicaid patients. When the Medicaid program suspended the MILMANs’ ability to bill Medicaid in November of 2004, the couple entered into a conspiracy with Oleg Ordinartsev, 38, and Vladimir Mitkovetski, 49, to hide their involvement with Lakeshore Pharmacy in Kirkland, Washington. Valentina Milman acted as the pharmacist at Lakeshore and ALEXANDER MILMAN had an ownership interest in the pharmacy. The pharmacy submitted more than $200,000 in bills to Medicaid after the pharmacy had fraudulently obtained its Medicaid provider number.
The three others involved in the scheme have already pleaded guilty. One of the co-conspirators, Oleg Ordinartsev, admitted in his plea agreement that he submitted false paperwork to Medicaid hiding MILMAN’s ownership role. Ordinartsev pleaded guilty to Conspiracy to Commit Health Care Fraud on July 6, 2007. Vladimir Mitkovetski admits in his plea agreement that he lied to government investigators, claiming he was the sole owner of Lakeshore Pharmacy and that he was simply purchasing equipment from MILMAN. Under MILMAN’s direction Mitkovetski created false paperwork to hide MILMAN’s ownership of Lakeshore Pharmacy. Mitkovetski pleaded guilty to making a false statement on June 19, 2007. Valentina Milman pleaded guilty to Conspiracy to Commit Health Care Fraud and Conspiracy to Launder Money on December 7, 2006. All three of these defendants are scheduled to be sentenced by U.S. District Judge James L. Robart on February 4, 2008.
The case was investigated by U.S. Health and Human Services Office of Inspector General (HHS-OIG), Internal Revenue Service Criminal Investigations (IRS-CI), the FBI, the Food and Drug Administration (FDA), 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.