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Press Release

Los Angeles Jury Convicts Equipment Suppliers of Medicare Fraud

For Immediate Release
Office of Public Affairs
Trial Conviction for Medicare Strike Force in Los Angeles

WASHINGTON – A federal jury in Los Angeles convicted the owners and operators of a Los Angeles-area durable medical equipment company of Medicare fraud, Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Central District of California Thomas P. O’Brien; and Glenn R. Ferry, Special Agent-in-Charge for the Los Angeles Region of the Office of Inspector General for the Department of Health of Human Services announced today.

After a one-week trial in federal court in Los Angeles, the jury found Gevork Kartashyan, 45, guilty of conspiracy to commit health care fraud and health care fraud; and Eliza Shurabalyan, 42, guilty of health care fraud. U.S. District Judge Stephen V. Wilson of the Central District of Los Angeles scheduled sentencing for Oct. 5, 2009.

Shubaralyan and Kartashyan owned and operated CHH Medical Supply, a durable medical equipment (DME) supply company. Between January 2005 and June 2008, Shubaralyan and Kartashyan, through CHH Medical Supply, billed Medicare $949,859, and were paid $597,750. Virtually all of these bills were for medically unnecessary power wheelchairs and wheelchair accessories.

At trial, elderly Medicare beneficiaries testified about how they were recruited and taken to Los Angeles-area medical clinics. At the clinics, the beneficiaries turned over their Medicare numbers and other personal identifying information. Some were promised vitamins, diabetic shoes, and other items that they never received. The clinics were in the business of generating fraudulent power wheelchair prescriptions that could be sold to DME company owners who would bill Medicare for the wheelchairs. Many of the beneficiaries did not know they were getting a wheelchair until it was delivered to them by CHH Medical Supply. All of the beneficiaries testified that they did not need or use the wheelchair.

Five physicians testified that they never authorized or approved the power wheelchair prescriptions written under their names, often by physician’s assistants. Three of these physicians testified that they never even worked at the clinics listed on phony prescription pads.

A government witness, who recently pleaded guilty to health care fraud in connection with one of the clinics at issue in this case, testified that Kartashyan would regularly come into the office where he and others worked in order to pick up power wheelchair prescriptions that he had purchased. Upon delivery, Kartashyan would then generate phony forms stating that the beneficiaries’ homes were appropriate for the use of a power wheelchair, even though no home assessment was done.

Shubaralyan, who was the listed owner of CHH Medical Supply, submitted all of the company’s claims to Medicare. Power wheelchairs and accessories constituted over 98 percent of the company’s billings to Medicare. In addition, Shubaralyan withdrew over $195,000 in cash from the company’s bank account in order to purchase the power wheelchair prescriptions.

The case was prosecuted by Assistant Chief John S. (Jay) Darden and Trial Attorney Jonathan Baum of the Criminal Division’s Fraud Section, with the investigative assistance of the FBI. The case was brought as part of the Medicare Fraud Strike Force. Federal Prosecutors have indicted 115 cases with 257 defendants in Miami, Los Angeles, and Detroit since the inception of strike force operations in March 2007. Collectively, these defendants are alleged to have fraudulently billed the Medicare program for more than $600 million.

The joint DOJ-HHS Medicare Fraud Strike Force is a multi-agency team of federal, state and local investigators designed to combat Medicare fraud through the use of Medicare data analysis techniques and an increased focus on community policing. In May 2009, the Department of Justice and the Department of Health and Human Services announced the Health Care Fraud Prevention & Enforcement Action Team ("HEAT"), a joint effort to prevent fraud and enforce current anti-fraud laws around the country. As part of the HEAT initiative, Medicare Fraud Strike Force operations were expanded from South Florida and Los Angeles to Detroit and Houston. To learn more about the HEAT initiative, go to:


Updated September 15, 2014

Press Release Number: 09-700