Massive Medicare Fraud Mastermind Sentenced To 15 Years In Prison In Connection With $77 Million Scheme

BROOKLYN, NY – Earlier today, Irina Shelikhova, 50, of Brooklyn, New York, was sentenced to 15 years in prison for her leadership role in a $77 million Medicare fraud scheme.  In addition to the prison term, U.S. District Judge Nina Gershon of the Eastern District of New York sentenced Shelikhova to 3 years of supervised release with a concurrent exclusion from Medicare, Medicaid and all Federal health programs, ordered her to forfeit $36,241,545, and ordered her to pay restitution in the amount of $50,943,386.   Shelikhova has been in custody since June 15, 2012, when she was arrested at JFK Airport after living as a fugitive in the Ukraine for almost two years.  After serving her sentence, she faces deportation from the United States.

The sentence was announced by Loretta E. Lynch, United States Attorney for the Eastern District of New York; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Special Agent-in-Charge Thomas O’Donnell of the HHS Office of Inspector General (HHS-OIG).

Shelikhova pleaded guilty on December 18, 2012 to conspiracy to commit money laundering.  Including Shelikhova, 13 individuals have been convicted of the massive fraud scheme, either through guilty plea or trial conviction.

“Irina Shelikova used fake doctors and forged documents to defraud Medicare out of millions of dollars of very real money.  As the owner and operator of three medical clinics, Shelikova engaged in a brazen scheme of fraudulent billing and kickbacks, going so far as to pay kickbacks to elderly patients in exchange for their Medicare numbers and their silence.  She relied upon her web of payoffs, kickbacks, and Russian propaganda to support her criminal scheme, but the truth caught up with her and justice has now been served,” stated United States Attorney Lynch.  “Protecting taxpayer funded programs like Medicare is a priority of this Office and the Department of Justice.  Today’s sentence represents a clear warning to those who seek to defraud Medicare that they will be held accountable for their crimes.”

According to court documents, from 2005 to 2010, Shelikhova owned and operated a clinic in Brooklyn that billed Medicare under three corporate names: Bay Medical Care PC, SVS Wellcare Medical PLLC and SZS Medical Care PLLC (Bay Medical clinic).  Shelikhova and her employees at the Bay Medical clinic paid cash kickbacks to Medicare beneficiaries and used the beneficiaries’ names to bill Medicare for more than $77 million in services that were medically unnecessary or never provided.  The defendants billed Medicare for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy and diagnostic tests.

According to testimony at the trial of her co-defendants, Shelikhova masterminded the health care fraud at the Bay Medical clinic, which included hiring a medically unlicensed co-defendant to impersonate the clinic’s “no-show” doctor and render phony medical “care” to such patients.  Shelikhova also directed employees to create fake medical notes in an attempt to back up the false billing and to forge doctors’ names on prescriptions and charts.

The government’s investigation included the use of a court-ordered audio/video recording device hidden in a room at the clinic, in which the conspirators paid cash kickbacks to corrupt Medicare beneficiaries. The conspirators were recorded paying approximately $500,000 in cash kickbacks during a period of approximately six weeks from April to June 2010. This room was marked “PRIVATE” and featured a Soviet-era poster of a woman with a finger to her lips and the words “Don’t Gossip” in Russian. The purpose of the kickbacks was to induce the beneficiaries to receive unnecessary medical services or to stay silent when services not provided to the patients were billed to Medicare.

To generate the large amounts of cash needed to pay the patients, Shelikhova directed the recruitment and operation of a network of external money launderers who cashed checks for the clinic.  Shelikhova wrote clinic checks payable to various shell companies controlled by the money launderers.  These checks did not represent payment for any legitimate service at or for the Bay Medical clinic, but rather were written to launder the clinic’s fraudulently obtained health care proceeds.  The money launderers cashed these checks and provided the cash back to the clinic.   Shelikhova used the cash to pay illegal cash kickbacks to the Bay Medical clinic’s purported patients.

This case is being prosecuted by Trial Attorney Sarah M. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Shannon Jones of the Eastern District of New York. The case was investigated by the FBI and HHS.

The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.