Medicare Fraud Ring Stole Doctors' Identities

An Armenian-American crime ring stole the identities of doctors and thousands of patients and created over 100 bogus clinics to defraud the government out of more than $100 million in Medicare payments.

An Armenian-American crime ring stole the identities of doctors and thousands of patients and created more than 100 bogus clinics to defraud the government out of more than $100 million in Medicare payments, according to a report in the New York Times. Prosecutors called it the largest Medicare fraud operation ever carried out by a single group.

All told, 44 people were indicted for the crimes, roughly half from the New York area, according to the Federal Bureau of Investigation and federal prosecutors in New York and Georgia. Named in the indictment was Armen Kazarian, identified by authorities as a “Vor” -- a term law enforcement uses for high-level criminals who hail from Russia and the countries of the former Soviet Union, including Armenia, the New York Times reported.

Mr. Kazarian and 28 other defendants were charged with crimes tied to the Mirzoyan-Terdjanian Organization, a nationwide crime syndicate with strong ties to Armenia.

The thieves would create a bogus clinic using stolen physicians' stolen personal information and then used stolen patient inforrmation to file bogus claims. The criminals quickly moved on to creating new fraudulent clinics before authorities became suspicious, the New York Times said. At least 118 of these clinics existed in 25 states, most solely on paper.

“The diabolical beauty of the Medicare fraud scheme — from the criminals’ standpoint — was that it was completely notional,” Janice K. Fedarcyk, the assistant director in charge of the New York FBI office, said in a statement. “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.”