Medical Fraud

Published on: June 13, 2011

Southern California Medicare Fraud Update: Armenian Mob “Vor” Kazarian gets Three-Year “Sweetheart Deal”

Last Monday, Armen Kazarian, a “Vor” or “don” for the Armenian mafia, admitted in court that “I was involved in a criminal conspiracy,” including Southern California Medicare fraud.

Last October, federal investigators busted up Kazarian’s ring of 118 “phantom” clinics that allegedly made off with over $35 million in funds. All told, Kazarian and his co-conspirators tried to defraud the government out of around $160 million. 70 mobsters stand accused. So far, only Karen Aharonian and Rafik Terdjanain have pled guilty. The deal that the mob godfather developed with prosecutors generated heated debate on the blogosphere. According to the New York Daily News, Kazarian “admitted Monday to making threats and other crimes in exchange for the light (3-year) sentence. The final details of the plea were put off for a week.” Prosecutors who busted up the ring expressed their respect for the size and structure of the Armenian mob’s conspiracy, saying that it “put the traditional mafia to shame.”

Will busting up Kazarian’s ring fundamentally alter the game? When reports suggest that Medicare fraud losses top $60 billion a year, it’s hard to see how any individual busts — even of the size and scope of this crackdown — can have fundamental, game changing effects.

Published on: May 30, 2011

Is Los Angeles Medicare Fraud Destroying the Economy and Ruining Our Children’s Future?

by Michael Kraut

Politicians, pundits and “everyday Americans” alike are striving to stamp out Southern California Medicare, Medi-Cal and Medicaid fraud – and for good reason. Consider Massachusetts Republican Senator Scott Brown’s recent rant against fraud in the Medicare system: “The Government Accountability Office has estimated that nearly 10%, or $47 billion, of annual Medicare spending is nothing but waste, fraud or abuse.” Attorney General Eric Holder has put the number higher – at $60 billion. “We need Medicare administrators to work to prevent these improper payments – instead of the existing “pay and chase” model that makes the system so susceptible to fraud.”

Senator Brown and others are livid, understandably. Southern California white collar crimes, such as Los Angeles insurance fraud, Pasadena Medicare fraud and identity theft not only sap money from a strained system but also cause a deterioration in our ability to trust institutions designed to protect us and support us in times of need.

It’s easy to look at enormous numbers like this – $47 billion, $60 billion – and to develop a mentality that it’s “all these people’s fault.” In other words, there is a handful of “bad guys” who are robbing the system blind. If we could only catch and punish these perpetrators, then our health care system would be fixed, our economy will be righted, and all would be well.

Published on: May 23, 2011

Los Angeles Medicare Fraud Stories Roll On, Even as IMF Chief Sits in NYC Jail

by Michael Kraut

Last week, while most of the blogosphere zeroed in on the salacious accusations against International Monetary Fund’s chief, the news on the Southern California Medicare fraud front was not exactly silent.

Indeed, a May 14th article in the Wall Street Journal (“Medicare Fraud Nets Guilty Plea”) has had a lot of pundits and analysts debating the implications. A Brooklyn physical therapist, Alexander Kharkover, plead guilty the Friday before last in Federal Court to five counts of submitting false/fraudulent claims to Medicare. For a five-year period (from January 2005 to July 2010), Kharkover allegedly overbilled Medicare to the tune of nearly $12 million, and Medicare paid $7.3 million worth of those claims.

Mr. Kharkover pled guilty without trying to arrange a plea deal. He has yet to be sentenced. Here is an interesting quote from the WSJ about the matter: “According to a person familiar with the case, in one instance, Mr. Kharkover allegedly submitted a bill for a service he performed personally, but on a date when he was on vacation cruise.”

Published on: May 6, 2011

What Osama bin Laden’s Shooting Death Means for Your Los Angeles White Collar Crime Defense

by Michael Kraut

If you’ve recently been charged with a Southern California white collar crime, insurance fraud, credit card fraud, or any other non-violent offense, you might not immediately see any parallels between your situation and the war on terror. But the blogosphere was literally inflamed this past week with news about Osama bin Laden’s death at the hands of US commandos, and it may be useful for us to examine how the ways in which we think about crime influence our potential legal defense strategies.

The basic point is this: We often construct “just so” stories or narratives to justify our opinions about events and people.

The manhunt for Osama bin Laden, for instance, ended successfully from the United States’ point of view. Now, when we look back, historically, things will look all tied up like a neat little bow. One can almost think about Osama being gunned down by snipers in the daring 40-minute raid in Abbottabad Pakistan as the third act of a movie (guessing there probably will be one pumped out by Hollywood soon enough). Thus, our ì20/20 hindsightî makes it seem like the deliverance of justice upon Osama was a forgone conclusion. If history had proceeded along another path – what’s technically known as a counterfactual – we would have constructed a different “just so” story, and that, too, would have seemed like an inevitable product of history.

Published on: May 1, 2011

Major Los Angeles Medicare Fraud News – Couple Pleads Guilty in $200 Million Medicare Fraud Scam

by Michael Kraut

As this blog has been reporting for months now, federal investigators have been really cracking down on crimes like Southern California Medicare and Medical fraud. A breaking story out of Miami highlights how much the government means “business.”

According to an April 14th story in the Miami Herald, Lawrence Duran and his wife, Marianella Valera, pled guilty to stealing $200 million from Medicare as part of a massive conspiracy. The couple could face 20 years in prison – for running what the Herald describes as “The nation’s largest mental health racket.”

The couple, who owned seven different mental health clinics, got indicted last October on charges of defrauding 22 defendants, including psychiatrists, recruiters, and even senior employers in their companies. The Assistant Attorney General of the Justice Department’s Criminal Division, Lanny Breuer, did not mince words: “they reaped millions in illegal profits by operating a sham mental healthcare company that provided unnecessary and illegitimate treatments to patients, many of whom were recruited through bribes and kickbacks, and then they laundered the proceeds.”

Published on: April 18, 2011

Disturbing Los Angeles Medicare Fraud News: Couple in Minnesota Could Get Six Decades (Each!) in Prison

by Michael Kraut

A new Minnesota Public Radio report has public health authorities, economists, and bloggers who focus on issues like Southern California Medicare fraud alike analyzing and chatting about powerful charges against a couple from Brooklyn Park, Minnesota.

Anita and Stephen Soledolu — co-owners of a home healthcare service — allegedly submitted Medicare claims that did not have documentation. Prosecutors allege that the couple bilked Minnesota for over $864,000. The Soledolus face indictments on six felony counts. Each one could be hit with six decades behind bars and penalties of $300,000.

According to a Minnesota Public Radio report: “The Soledolus submitted claims for home care of Medicaid recipients when investigators found clients weren’t home.”

Published on: April 4, 2011

Southern California Medicare Fraud Red Flag: Massive Detroit Bust Alarms Doctors and Chiropractors in the Southland

by Michael Kraut

As regular followers of this blog’s ongoing series on Los Angeles Medicare fraud know, the Federal Government has been stepping up its campaign to bust up Southern California insurance fraud and other white collar crimes – particularly Medicare and Medicaid related schemes.

Today, we’ll focus on a major news story out of Detroit, Michigan. According to the AP, Oscar Linares, a 53-year-old Michigan doctor, allegedly fraudulently billed Medicare for $5.7 million between 2008 and 2010. The Wednesday before last, authorities broke into Linares’ clinic, The Monroe Pain Center, and arrested the doctor.

According to reports from the Monroe Evening News, Linares’ Medicare fraud was unusually intense. He allegedly saw 250 patients a day – actually, he didn’t specifically “see” the patients, he had proxies see the patients and dole out prescriptions for controlled substances like OxyContin. Indeed, if more than 200 patients came in a day, employees allegedly would get bonuses!

Published on: March 21, 2011

Will Los Angeles Healthcare Fraud be Wiped Out by President Obama’s 2012 proposals?

by Michael Kraut

For last several years, we’ve witnessed massive arrests for Southern California Medicare fraud and other healthcare fraud schemes around the nation. Billions of dollars have been seized, and hundreds of people have been arrested and brought to trial. The news practically glitters every week with examples of chiropractors, dentists, doctors, and other healthcare providers caught up in the dragnet.

According to the Centers for Medicare and Medicaid Services, President Obama’s 2012 budget proposes a variety of new antifraud tools that will escalate the government’s fight against fraudsters and scam artists. Some experts estimate that the antifraud tools may save over $32 billion over the next decade. What are some of these new antifraud tools, and will these enhanced tactics really repair the system and prevent abuse and graft?

First, let’s take a look at some crucial statistics:

Published on: February 28, 2011

Massive Los Angeles Medicare Fraud Bust – Five Suspects Accused of Cheating Medicare of $28 million

by Michael Kraut

Last week, 700 FBI and Health and Human Services agents rounded up 111 suspects in nine cities – including five people suspected of Los Angeles Medicare fraud – in the “largest-ever Federal health care fraud takedown” in the United States, according to government officials. The Los Angeles Times reports that five LA defendants “cheated the government out of more than $225 million in false billing schemes that included fraudulent claims, kickback operations, money laundering and identity theft.”

A spokesperson for the Justice Department’s Criminal Division, Assistant Attorney General Lanny Breuer, said “our message is clear… we are determined to put Medicare fraudsters out of business.”

The Justice Department’s task force has really revved up, since its inception in early 2007. So far, nearly 1,000 people have been charged for false billing schemes – approximately 75% of these people have been convicted. The average prison sentence has been quite substantial – 43 months (more than 3.5 years). In 2010 alone, national, state, and local task forces raked in about $4 billion in fines and recovery payments.

Published on: February 14, 2011

Los Angeles Medical Fraud News Alert: Eight Nurses Going to Jail for Defrauding Medicare

by Michael Kraut

When you picture Southern California medical, dental, or chiropractic fraud arrests, you might envision a surly doctor conspiring with a criminal cohort to develop sophisticated white collar crime techniques.

You might not imagine that eight nurses (between the ages of 32 and 55) would be capable of pulling off a scam that bilked Medicare out of nearly $19 million.

But that’s exactly what the Department of Justice has alleged against eight RNs in Miami. The owners of two health care agencies, Florida Home Health Care Providers Inc. and ABC Home Health Inc., allegedly charged Medicare for unnecessary services (or services that never got provided) to the tune of $18.7 million. Last Tuesday, the eight nurse-owners – Diana Sanabia, Daisy Santos, Roberto Rodriguez, Marlene Magadan, Maria Perez, Alberto Alvarez, Yanisley Chao, and Leonardo Malagon — got sentenced to prison time as well as forced restitution (upwards of $700,000) for their roles in the Medicare scam.