Morris County Man and New York Man Admit Roles in $4 Million Union-Related Health Care Fraud Scheme
NEWARK, N.J. – A Morris County man and a New York man today admitted their roles in defrauding a union-run health benefit fund of more than $4 million in connection with running unauthorized health and wellness events where thousands of medically unnecessary tests were performed on union members, Acting U.S. Attorney Rachael A. Honig announced.
Alan Ajamian, 68, of Chester, New Jersey, and James Maginn, 64, of Bellerose, New York, each pleaded guilty by videoconference before U.S. District Judge Madeline Cox Arleo to one count of conspiracy to commit health care fraud.
According to documents filed in this case and statements made in court:
Ajamian bribed an official of a health care benefits fund for a service employees union to conduct health fairs for union members that the union did not authorize. The bribes – which included cash, cigars, Yankees tickets, and trips to Las Vegas – were paid to the official to gain access to union members who received health insurance benefits from the union fund.
Ajamian, Maginn, and others hired medical professionals, including doctors and nurse practitioners, to conduct various medically unnecessary exams and tests at the health fairs. These exams and tests included ultrasounds, vascular studies, dopplers, echocardiograms, allergy, and pulmonary function tests. Ajamian, Maginn, and others pressured and paid the medical professionals to perform as many tests on union members as possible, regardless of whether the tests were medically necessary. To deceive the union fund, Maginn and others falsely represented to the union that the medical tests were conducted at a physician’s office or an urgent care center. In fact, all the tests were administered at health fairs, which took place at the union members’ places of employment.
Maginn and others used several medical and billing companies to submit to the union fund the fraudulent claims stemming from the medically unnecessary exams and tests performed at the health fairs. Ajamian, Maginn, and others caused these companies to bill the union fund over $6 million for these claims. In turn, the union fund paid the companies associated with Ajamian, Maginn, and others over $4 million in connection with the fraudulent claims.
Two other individuals, Benjamin Iskhakov and Omawattie Dayaram, were previously charged by complaint on Aug. 24, 2020 in connection with their roles in the conspiracy, and those charges remain pending.
The conspiracy charge to which Ajamian and Maginn each pleaded guilty carries a maximum penalty of 10 years in prison and a fine of $250,000, or twice the gross grain or loss from the offense, whichever is greatest. Sentencing for Ajamian is scheduled for Oct. 25, 2021, and for Maginn, Oct. 26, 2021.
Acting U.S. Attorney Honig credited special agents of the FBI, under the direction of Special Agent in Charge George M. Crouch Jr. in Newark, and the U.S. Department of Labor, Office of the Inspector General, New York Region, under the direction of Acting Special Agent in Charge Nikitas Splagounias.
The government is represented by Assistant U.S. Attorney Christopher D. Amore of the Government Fraud Unit, and Special Assistant U.S. Attorney Kendall Randolph of the Organized Crime and Gangs Unit of the U.S. Attorney’s Office in Newark.
The charges and allegations against the remaining defendants are merely accusations, and they are presumed innocent unless and until proven guilty.