Authorities have charged 73 people, including members of an alleged Armenian-American organized crime organization, with multiple healthcare fraud crimes. The FBI has arrested 52 of these suspects for executing what it says is the largest Medicare fraud case the DOJ has prosecuted to date. The defendants operated close to 120 fake clinics in 25 states and were indicted by authorities in California, Georgia, New Mexico, New York, and Ohio. "The emergence of international organized crime in domestic health care fraud schemes signals a dangerous expansion that poses a serious threat to consumers as these syndicates are willing to exploit almost any program, business or individual to earn an illegal profit," said Acting Deputy Attorney General Gary G. Grinder, in a statement. "The Department of Justice is confronting this evolving threat here and abroad through a number of initiatives including a strengthened Attorney General's Organized Crime Council and the creation of the International Organized Crime Intelligence and Operations Center (IOC-2) to ensure that we are focused and coordinated in our efforts to combat international organized crime."
Healthcare identity theft has become a major worry, especially with the movement toward electronic medical records. Some 1.5 million Americans have been victims of medical identity theft, according to data from the Ponemon Institute.
Former employees at Johns Hopkins Hospital were indicted earlier this month for an ID theft scam that used patient records to get $600,000 worth of credit. And meanwhile, recent Theft Resource Center data shows that healthcare organizations have disclosed 119 breaches so far this year -- more than three times the 39 breaches suffered by the financial services industry.
The investigation in New York began after Social Security numbers and birth dates of 2,900 Medicare patients in upstate New York were reported stolen, according to an Associated Press report.
U.S. Attorney Preet Bharara said at a news conference yesterday that the crime ring's operation "puts the traditional Mafia to shame," the AP reported. "They ran a veritable fraud franchise."
Armen Kazarian, 46, who is in custody in California, was the alleged crime boss of the operation. His alleged main conspirators, Davit Mirzoyan, 34, and Robert Terdjanian, 35, both in New York, were named in an indictment that charges them with ID theft, money laundering, and other criminal acts, including stolen credit cards and phony Viagra.
"The international organized crime enterprise known as the Mirzoyan-Terdjanian, fleeced the health care system through a wide-range of money making criminal fraud schemes. The members and associates located throughout the United States and in Armenia, perpetrated a large-scale, nationwide Medicare scam that fraudulently billed Medicare for more than $100 million of unnecessary medical treatments using a series of phantom clinics," said Kevin Perkins, assistant director of the FBI's Criminal Investigative Division, in a statement.
If found guilty of the racketeering charges, the suspects could face life imprisonment and a $250,000 fine, while healthcare fraud and conspiracy charges could send them to prison for 10 years, with a $250,000 fine. ID theft charges carry a maximum of 10 years in prison plus the same fine; aggravated ID theft, a two-year prison sentence added to any other sentence given; and conspiracy to commit credit card fraud, 10 years in prison and $250,000.
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