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Press Release

Owner of Los Angeles Medical Supply Company Convicted in $3.3 Million Medicare Fraud Scheme

For Immediate Release
Office of Public Affairs

A federal jury in Los Angeles found the owner of a medical supply company guilty of four counts of health care fraud today in connection with a $3.3 million Medicare fraud scheme.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, Acting U.S. Attorney Stephanie Yonekura of the Central District of California, Special Agent in Charge Glenn R. Ferry of the U.S. Department of Health and Human Services Office of Inspector General’s (HHS-OIG) Los Angeles Region and Assistant Director in Charge David L. Bowdich of the FBI’s Los Angeles Field Office made the announcement.

Hakop Gambaryan, 55, of East Hollywood, the owner of Colonial Medical Supply, was convicted of four counts of health care fraud.  A sentencing hearing will take place before U.S. District Judge Otis D. Wright II of the Central District of California, and will be scheduled at a later date.

According to evidence presented at trial, between March 2006 and December 2012, Gambaryan paid cash kickbacks to medical clinics for fraudulent prescriptions for durable medical equipment, such as expensive power wheelchairs, which the patients did not need.  Gambaryan then used these prescriptions to bill Medicare for the unnecessary power wheelchairs and other equipment. 

At trial, the evidence established that Gambaryan personally delivered power wheelchairs to many beneficiaries who were able to walk without assistance.  In one instance, Gambaryan carried a power wheelchair up a flight of stairs for a woman who lived in a second floor apartment with no elevator.  In another instance, the power wheelchair would not fit inside the beneficiary’s home so Gambaryan put it in the beneficiary’s garage.

The evidence also demonstrated that Gambaryan generated false documentation to support the fraudulent claims, including fake home assessments that made it appear home assessments had occurred when they had not.  In addition, Gambaryan photocopied beneficiary signatures hundreds of times to create the appearance that the beneficiaries consented to ongoing durable medical equipment rentals, when in reality, at least two of the beneficiaries had passed away prior to the date they supposedly signed the rental agreements.    

The evidence showed that Gambaryan submitted approximately $3.3 million in false and fraudulent claims to Medicare, and received more than $1.7 million on those claims.

The case was investigated by the FBI and HHS-OIG.  The case is being prosecuted by Trial Attorneys Fred Medick and Ritesh Srivastava of the Criminal Division’s Fraud Section. 

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged nearly 2,100 defendants who have collectively billed the Medicare program for more than $6.5 billion.  In addition, the HHS Centers for Medicare & Medicaid Services, working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Team (HEAT), go to:

Updated March 20, 2015

Health Care Fraud
Press Release Number: 15-354