By BRUCE GOLDING
Reputed Armenian gangsters, including ‘vor’ Armen Kazarian, charged in $100M Medicare fraud – NYPOST.com
Last Updated: 11:42 AM, October 14, 2010
Posted: 1:37 AM, October 14, 2010
Dozens of reputed Armenian gangsters were busted by the feds yesterday for a “smorgasbord” of offenses that includes the largest-ever Medicare fraud by a single crime syndicate.
The size and sophistication of the coast-to-coast scheme — which generated more than $160 million in bogus bills — “puts the traditional Mafia to shame,” Manhattan US Attorney Preet Bharara said.
The ring created at least 118 “phantom” medical clinics in 25 states that used stolen identities of doctors and patients to rip off more than $35 million in taxpayer funds.
Gregory P. Mango
TAKEN ILL: Robert Terdjanian, an alleged ringleader in the massive Medicare fraud, is led to his arraignment yesterday in Manhattan.
In reality, most of the clinics were nothing more than rented Mail Boxes Etc. addresses, Bharara said.
Police Commissioner Ray Kelly said many of the fake invoices — which included forensic pathologists charging for live office visits, and obstetricians conducting allergy tests — were cooked up in an office above a Brooklyn auto-body shop.
Charges were also filed in California, Georgia, New Mexico and Ohio, alleging a total of $163 million in fraud by 73 defendants.
Those charged in New York include reputed crime boss Armen Kazarian, who holds the title of “vor,” which authorities said is similar to a Mafia godfather. Kazarian is the first vor ever charged with racketeering in the United States, according to the Department of Justice.
The 46-year-old resident of Glendale, Calif. — who drives a $350,000 Rolls-Royce Phantom — was secretly recorded making profane threats against “those who have failed to pay him or show him proper respect,” court papers say.
During one call on July 21, he allegedly ranted to an underling about someone named “Alik” who had called Kazarian while drunk.
“Find that son of a bitch. . . I am going to kick his ass,” court papers quote Kazarian as saying.
Also arrested was Robert Terdjanian, 35, of Brooklyn, who was described as the East Coast ringleader of a gang aligned with Kazarian.
Terdjanian, along with Davit Mirzoyan of Los Angeles, oversaw a multitude of schemes that included sales of illegal drugs, untaxed cigarettes and Viagra, authorities said.
The suspects allegedly laundered some of their dirty profits by purchasing casino chips in Las Vegas.
Another suspected scam involved co-defendant Aron Chervin, who allegedly recruited strippers to file false car-insurance claims.
Terdjanian — who was held without bail– was also accused of threatening to disembowel an extortion victim at a Brighton Beach restaurant in May.
Defense lawyer Scott Tulman said Terdjanian “denies the allegations.
bruce.golding@nypost.com
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44 Armenians Charged in Huge Medicare Fraud Scheme
By WILLIAM K. RASHBAUM AND MICHAEL WILSON
An Armenian-American crime syndicate stole the identities of doctors and thousands of patients and used them and more than a hundred spurious clinics in 25 states to bill Medicare for more than $100 million for treatments no doctor ever performed and no patient ever received, the federal authorities announced on Wednesday.
Prosecutors said the case represented the largest Medicare fraud operation ever carried out by a single group that resulted in criminal charges. The group succeeded in stealing $35 million in Medicare reimbursements, officials said, before the charges were leveled and arrests were made on Wednesday.
The “highly organized massive scheme” is at the heart of a racketeering indictment and other charges unsealed in federal court against 44 people, including a number of members of the Armenian crime group, according to the F.B.I. and federal prosecutors in New York and Georgia.
“With 118 phantom clinics and over $100 million in bogus billings, this group of international gangsters allegedly ran a veritable fraud franchise,” Preet Bharara, the United States attorney in Manhattan, said in a statement announcing the charges. “As charged, they stole taxpayer dollars earmarked for the elderly and infirm and got away with it, until now.”
As of early Wednesday afternoon, 41 of the people accused had been arrested, 21 of them in the New York City area, and a number of others in Los Angeles and elsewhere, the authorities said. They included Armen Kazarian, whom the authorities identified as a “Vor,” a term that means “thief-in-law” and refers to a member of a select group of high-level criminals from Russia and the countries that had been part of the Soviet Union, including Armenia.
Prosecutors said that Mr. Kazarian’s arrest signified the first time a Vor has been charged in the United States with racketeering crime, and the first time since 1996 that a known Vor has been arrested on any federal charge.
The indictments (see also below) were announced at a Wednesday afternoon news conference by Mr. Bharara; Janice K. Fedarcyk, the assistant director in charge of the New York F.B.I. office; James T. Hayes Jr., the special agent in charge of the New York Office of Homeland Security Investigations; Police Commissioner Raymond W. Kelly; and other officials.
“The diabolical beauty of the Medicare fraud scheme — from the criminals’ standpoint — was that it was completely notional,” Ms. Fedarcyk said in a statement released in the early afternoon. “There were no real medical clinics behind the fraudulent billings, just stolen doctors’ identities. There were no runners or colluding patients showing up at clinics for unneeded or “upcoded” treatments, just stolen patient identities. The whole doctor-patient interaction was a mirage.”
Twenty-eight of 44 defendants were named in a racketeering indictment unsealed in New York. Additional indictments were unsealed on Wednesday in related cases by the United States attorneys in Los Angeles, Cleveland, Albuquerque, and Savannah, Ga.
The group used the stolen identities of the doctors and patients to bill Medicare for more than $100 million in nonexistent treatments over four years, according to a news release announcing the charge. And while the news release said Medicare would identify and shut down the bogus clinics after several months, in many cases “Medicare had already paid millions of dollars to the phony clinics — more than $35 million in total — and that money had already been withdrawn and sometimes transferred overseas.”
The group, official said, was aware that each clinic had a limited shelf life and would simply turn to another fraudulent clinic — they existed only on paper with an address that was usually a mail drop — operating at least 118 in 25 states.
The racketeering indictment charges 28 defendants, including Mr. Kazarian, with crimes tied to the operation of the Armenian-American organized crime group, which it identifies as the Mirzoyan-Terdjanian Organization, a nationwide criminal operation with strong ties to Armenia. The group’s leadership is based in New York and Los Angeles, but its operations extend throughout the United States and overseas.
The indictment maintains that that the scheme operated with the assistance of, and under the protection of, Mr. Kazarian. The group’s members and associates are charged with numerous crimes, including racketeering, health care fraud, identity theft, money laundering and bank fraud. The indictment says members and associates of the organization are alleged to have used violence and threats of violence to ensure respect for and payments to its leadership.
Kazarian, Armen Et Al Indictment
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Dozens charged with largest Medicare scam ever
.. AP Varugan Amroyan is led in handcuffs from FBI headquarters in New York Wednesday, Oct, 13, 2010. Amroyan …
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By TOM HAYS, Associated Press Writer Tom Hays, Associated Press Writer — Wed Oct 13, 9:33 pm ET
NEW YORK — A vast network of Armenian gangsters and their associates used phantom health care clinics and other means to try to cheat Medicare out of $163 million, the largest fraud by one criminal enterprise in the program’s history, U.S. authorities said Wednesday.
Federal prosecutors in New York and elsewhere charged 73 people. Most of the defendants were captured during raids Wednesday morning in New York City and Los Angeles, but there also were arrests in New Mexico, Georgia and Ohio.
The scheme’s scope and sophistication “puts the traditional Mafia to shame,” U.S. Attorney Preet Bharara said at a Manhattan news conference. “They ran a veritable fraud franchise.”
Unlike other cases involving crooked medical clinics bribing people to sign up for unneeded treatments, the operation was “completely notional,” Janice Fedarcyk, head of the FBI’s New York office, said in a statement. “The whole doctor-patient interaction was a mirage.”
The operation was under the protection of an Armenian crime boss, known in the former Soviet Union as a “vor,” prosecutors said. The reputed boss, Armen Kazarian, was in custody in Los Angeles.
Bharara said it was the first time a vor — “the rough equivalent of a traditional godfather” — had been charged in a U.S. racketeering case.
Kazarian, 46, of Glendale, Calif., and two alleged ringleaders — Davit Mirzoyan, 34, also of Glendale, and Robert Terdjanian, 35, of Brooklyn — were named in an indictment charging racketeering conspiracy, bank fraud, money laundering and identity theft.
The indictment accused Terdjanian and others of hatching other schemes involving stolen credit cards, untaxed cigarettes and counterfeit Viagra. It also alleges that during a meeting last year at a Brighton Beach restaurant, Terdjanian pulled a knife on someone who owed him money “and threatened to disembowel the individual if the debt was not paid.”
A judge jailed Terdjanian without bail on Wednesday at a brief hearing. Afterward, his attorney said his client denies the charges.
Kazarian and Mirzoyan were scheduled to appear in court Wednesday in Los Angeles.
Authorities began the New York-based investigation after information on 2,900 Medicare patients in upstate New York — including Social Security numbers and dates of birth — were reported stolen.
The defendants in the New York case also had stolen the identities of doctors and set up 118 phantom clinics in 25 states, authorities said. The names were used to submit fake bills for care that was never given, they said.
Some of the phony paperwork was a giveaway: It showed eye doctors doing bladder tests; ear, nose and throat specialists performing pregnancy ultrasounds; obstetricians testing for skin allergies; and dermatologists billing for heart exams.
In the New York portion of the case, more $100 million in fraudulent bills were submitted and Medicare paid out at least $35 million, sometimes by wiring it to the clinics’ banks accounts, investigators said.
Most of the defendants “were Armenian nationals or immigrants and many maintained substantial ties to Armenia” and criminals there, the indictment said. Couriers would often carry cash proceeds from the fraud back to Armenia, it added.
Prosecutors were seeking forfeiture of real estate in Las Vegas; Palm Springs, Calif.; and elsewhere, and of a 2007 Maserati and a 2006 Jaguar.