Operation “Diagnosis Dollars” -- 10 Individuals Indicted In Los Angeles & 28 Charged In New York Indictment - Allegations Of Medicare Fraud Where Services Never Provided At Phony Clinics & Armenian Organized Crime

L.A Times Photo

The Los Angeles Times and New York Times (44 Charged In Huge Medicare Fraud Scheme) reported on a number of federal criminal indictments in New York,  Los Angeles, New Mexico, Cleveland and Atlanta arising from an alleged scheme to defraud Medicare allegedly involving phony clinics, no patients (just Medicare cards), and physician identity theft. The above-referenced New York Times article has a copy of the Southern District New York Indictment embedded in it in which there were 28 defendants (including some from Los Angeles). The New York Indictment included RICO crime charges involving alleged Armenian organized crime. This nationwide investigation was called  Operation “Diagnosis Dollars.”

Three Los Angeles Indictments.  According to the indictments returned under seal by a federal grand jury in Los Angeles on October 7, the defendants (many of whom are related) played roles in the operation of at least eight fraudulent medical clinics and sought reimbursement from the Medicare health care benefit program for services that were never delivered to patients with coverage under that program, The defendants are also charged with laundering the money derived from the fraudulent scheme. In addition, 12 search warrants were executed in Los Angeles to seek evidence.

The Los Angeles indictments alleges crimes including Conspiracy to Commit Bank Fraud; Conspiracy to Launder Monetary Instruments; Money Laundering; Bank Fraud; Aggravated Identity Theft; and Criminal Forfeiture. The defendants charged in three separate Los Angeles indictments unsealed this morning are:
Pogos Satamyan, of Glendale
Vachagan Dishchian, 34, of Van Nuys
Vahe Dischian, 36, of Van Nuys
Andranik Satamyan, 20, of Glendale
Haroutyoun Dischian, 62, of Van Nuys
Nicolae Candu, 24 (not arrested or surrendered yet)
Vitalina Shcherbyak, 24 (not arrested or surrendered yet)
Nikolay Agishev, 24 (not arrested or surrendered yet)
Grisha Sayadyan, 59, of Glendale
Allen Sayadyan, 30, of Glendale

According to the main eight-defendant indictment, the scheme worked in the following way: individuals would obtain the stolen identities of physicians to enroll as providers in the Medicare program, which requires a medical doctor's name, Social Security number and date of birth. Using the stolen physician identities, applications to become providers were submitted applications to Medicare. The defendants would then open clinics by leasing office space or by renting a post office box. Other defendants would then open fraudulent bank accounts into which Medicare could transfer fraudulent claims. These bank accounts were opened in either the name of the physician whose identity had been stolen, a business, or in the name of a co-conspirator.

Once the application was approved and the Medicare provider account was opened, the defendants allegedly began to bill Medicare utilizing stolen beneficiary identifications. In reality, the Medicare beneficiaries were never seen or treated.

Medicare would then pay the fraudulent claims and transmit the funds directly into the fraudulent bank accounts. As the Medicare funds were received, they were withdrawn immediately and laundered. Some of the defendants laundered the funds by forging signatures of the alleged account holder, and then delivered the signed checks to a third party, who was actually a confidential informant working for the FBI. The confidential informant would then cash the checks and return the proceeds in cash to the defendants, less a fee.
Eight fraudulent clinics are specifically identified in the Los Angeles case, and investigators estimate the defendants submitted more than $17 million in fraudulent claims for which Medicare paid approximately $8 million.

Attorney Comments:  In my experience, one way that physician identities are obtained for fraudulent billing is through advertisements for physician employees at clinics. Physicians must be very careful not to place their physician number, UPIN number, Social Security number or other identifying information on blind resumes or CVs sent in response to advertisements.If physicians do not guard this information, the fraudulent use of their information for billing can cause huge problems with Medicare that can take years to unwind including overpayment demands, tax issues and related problems.

Posted by Tracy Green, Esq. Please email Ms. Green at tgreen@greenassoc.com or call her at 213-233-2260 to schedule a complimentary 30-minute consultation.

Any questions or comments  should be directed to Tracy Green, a very experienced Medicare fraud attorney  and health care fraud attorney at tgreen@greenassoc.com.

The firm focuses its practice on the representation of licensed professionals, individuals and businesses in civil, business, administrative and criminal proceedings. They have a specialty in representing licensed health care providers and in health care fraud related matters in California and throughout the country. Their website is: http://www.greenassoc.com/