Group allegedly cheated Medicare of $35M

Oct. 13, 2010 at 8:23 PM
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NEW YORK, Oct. 13 (UPI) -- A criminal group with roots in Armenia cheated the U.S. Medicare program of $35 million, federal prosecutors said Wednesday.

The organization allegedly billed for medical procedures that were never performed, using stolen identities and clinics that were only mail drops, The New York Times reported. Investigators said the phony claims added up to $118 million and $35 million was paid out.

"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 U.S. attorney in Manhattan, said in a statement. "As charged, they stole taxpayer dollars earmarked for the elderly and infirm and got away with it, until now."

A total of 44 people were named in an indictment unsealed Wednesday, and 41 had been taken into custody. Investigators identified one of the suspects, Armen Kazarian, as a "Vor," a term of respect used for high-level gangsters in former Soviet countries.

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