



newyork.fbi.gov/dojpressrel/pressrel10/nyfo101310.htm

Manhattan U.S. Attorney Charges 44 Members and Associates of an Armenian-American Organized Crime Enterprise with $100 Million Medicare Fraud

Defendants Also Charged with Racketeering, Identity Theft, and Money Laundering Crimes

Armenian “Vor” Charged with Protecting Alleged Medicare Fraud Scheme

PREET BHARARA, the United States Attorney for the Southern District of New York, EDWARD TARVER, the United States Attorney for the Southern District of Georgia, JANICE K. FEDARCYK, the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (“FBI”), RAYMOND W. KELLY, the Police Commissioner of the City of New York (“NYPD”), JAMES T. HAYES, JR., the Special Agent-in-Charge of the New York Office of Homeland Security Investigations (“HSI”), and THOMAS O’DONNELL, the Special Agent-in-Charge of the New York Office of the Inspector General, Department of Health and Human Services (“HHS”), announced today the unsealing of charges, in two separate indictments, against 44 alleged members and associates of an Armenian-American organized crime enterprise, for a range of offenses including the operation of at least 118 medical clinics located in 25 states that submitted over $100 million in bogus claims to Medicare. The alleged $100 million Medicare fraud scheme identified today is the largest, single Medicare fraud ever charged.

Assistant Director in Charge Janice K. Fedarcyk delivers remarks at the press conference today at Southern District of New York. Left, Preet Bharara United States Attorney; and NYPD Commissioner Ray Kelly

Photo Credit: FBI

Manhattan U.S. Attorney PREET BHARARA said: “In terms of profitability, geographic scope, and sheer ambition, the elaborate health care scam we charge today highlights the emerging and serious threat of international organized crime. With 118 phantom clinics and over $100 million in bogus billings, this group of international gangsters allegedly ran a veritable fraud franchise. As charged, they stole taxpayer dollars earmarked for the elderly and infirm and got away with it, until now. Today’s indictments send a strong message to these groups that we will use every tool and resource at our disposal to stop them in their tracks.”

EDWARD TARVER, the U.S. Attorney for the Southern District of Georgia, said: “Today’s arrests illustrate that health care fraud is a national problem and that a national response from law enforcement is necessary. The charges announced today also provide additional evidence of the efforts by international organized crime to defraud the Medicare system. The Department of Justice will pursue health care fraudsters of all types around the country, in order to bring them to justice.”

FBI Assistant Director-in-Charge JANICE K. FEDARCYK said: “The diabolical beauty of the Medicare fraud scheme—from the criminals’ standpoint—was that it was completely notional. There were no real medical clinics behind the fraudulent billings, just stolen doctors’ identities. There were no colluding patients signing in at clinics for unneeded treatments, just stolen patient identities. The whole doctor-patient interaction was a mirage. But the money was real, while it lasted.”

NYPD Commissioner RAYMOND W. KELLY said: “Thousands of patient identities were stolen and manipulated to generate millions of dollars in bogus Medicare claims. From Coney Island to California, these suspects bilked the health care system for procedures never performed or needed, but as a result of this investigation police and federal authorities have handed these suspects a true prescription for justice.”

HHS Special Agent-in-Charge THOMAS O’DONNELL said: “Organized crime within the healthcare system coupled with identity theft is a growing concern for law enforcement agencies across the country. But today’s operation is yet another example of the effective collaboration between OIG and the FBI in arresting those individuals who blatantly defraud the Medicare system.”

HSI Special Agent-in-Charge JAMES T. HAYES, JR., said: “Today’s charges and arrests represent HSI’s continuing commitment to vigorously investigating fraud in government health care programs. HSI will continue to work closely with our State and Federal law enforcement partners to protect the integrity of this social program and bring to justice this international criminal enterprise which, in this case, sought to game the system for their profit.”

Special Agent in Charge Diego Rodriguez (left) meets with agents in the New York FBI Command Post during arrest operations this morning

Photo Credit: FBI

In connection with the indictments unsealed today in the Southern District of New York, 41 defendants have been arrested in, among other places, New York and Los Angeles. The defendants taken into custody today in the New York area are expected to be presented in Manhattan federal court later this afternoon. The defendants arrested in the Los Angeles area will be presented in Los Angeles federal court today. Four defendants are fugitives and are still being sought. Additional indictments were unsealed today in related cases by the U.S. Attorney’s Offices in Los Angeles, Cleveland, Albuquerque, and Savannah.

Among the defendants charged with racketeering in the Southern District of New York is ARMEN KAZARIAN, a/k/a “Pzo,” a/k/a “Qerop,” who is alleged to be a “Vor,” a term translated as “Thief-in-Law.” The term “Vor” refers to a member of a select group of high-level criminals from Russia and the countries that had been part of the former Soviet Union, including Armenia. KAZARIAN was arrested in the Los Angeles area earlier this morning. This is the first time a Vor has ever been charged and arrested for federal racketeering crimes.

The Indictments (the “Racketeering Indictment” and the “Chervin Indictment”) unsealed today in Manhattan federal court, are described in greater detail below.

New York FBI agents work in the processing room

Photo credit: FBI

The Racketeering Organization

The Racketeering Indictment charges 28 defendants—including KAZARIAN, the alleged Vor—with crimes connected to the operation of an Armenian-American organized crime ring referred to as the Mirzoyan-Terdjanian Organization. The Mirzoyan-Terdjanian Organization is alleged to be a nationwide criminal enterprise with strong ties to Armenia. The leadership of the organization is based in New York and Los Angeles, and its operations extend throughout the United States and internationally.

The organization is alleged to have operated with assistance from and under the protection of KAZARIAN, and its members and associates are charged with numerous crimes, including racketeering, health care fraud, identity theft, money laundering, and bank fraud. Members and associates of the organization are alleged to have used violence and threats of violence to ensure respect for and payments to its leadership. For example, one of the organization’s alleged leaders, ROBERT TERDJANIAN, is accused of having threatened to “disembowel” a criminal associate who owed him money. ARMEN KAZARIAN also is alleged to have discussed killing an associate who failed to show proper respect.

The Medicare Fraud Scheme

The Mirzoyan-Terdjanian Organization is charged with engaging in numerous fraud schemes including a massive, highlyorganized scheme to defraud Medicare. According to the Racketeering Indictment, the organization stole the identities of legitimate doctors and filed applications to bill Medicare in the names of these doctors, often providing a clinic address on the application that was in fact simply the location of a mailbox. The organization then obtained the stolen identities of thousands of real Medicare beneficiaries, including the identities of approximately 2,900 Medicare patients treated at the Orange Regional Medical Center.

With the stolen identities of doctors and patients in hand, the organization billed Medicare for over $100 million dollars for treatments no doctor ever performed, and no patient ever received. For example:

Forensic pathologists billed for live office visits;

Eye doctors billed for bladder tests;

Ear, nose, and throat specialists billed for performing pregnancy ultrasounds; and

Obstetricians tested for skin allergies.

Although Medicare identified and shut down the phony clinics after several months, in many cases Medicare had already paid out millions of dollars—more than $35 million in total—and that money had already been withdrawn by the defendants and sometimes transferred overseas. The organization, aware that each clinic had a limited shelf life, then simply turned to another fraudulent clinic, operating at least 118 different phony clinics in 25 states during the course of the scheme.

The Multimillion-Dollar Private Insurance Fraud Scheme

Members of the Mirzoyan-Terdjanian Organization also operated a multimillion-dollar scheme to defraud insurance companies in the New York area by submitting millions of dollars in claims for medically unnecessary treatments. According to a second indictment, the Chervin Indictment, at least two members of the organization carried out a wide-spread and sophisticated fraud for at least a decade. Specifically, the schemers bribed a hospital employee to steal the names of patients for the schemers. The organizers then recruited these patients, sometimes by posing as a hospital referral service charged with helping accident victims.

In some cases, the defendants allegedly staged auto accidents to generate fake patients who would then undergo unnecessary and expensive treatments that would be billed and reimbursed. Patients were provided medical treatment, including painful nerve-conduction examinations, without reference to their actual medical need. After insurance companies paid for these unnecessary medical costs, the fraud proceeds were laundered through multiple accounts, including the escrow account belonging to an attorney. An attorney, as well as several doctors, were among the 18 individuals charged and arrested in connection with this scheme.

U.S. Attorney PREET BHARARA thanked the FBI, NYPD, HSI, and HHS for their work in the investigation, which he noted is ongoing. Mr. BHARARA also thanked the National Insurance Crime Bureau for their assistance in the investigation, as well as the U.S. Attorney’s Offices in Los Angeles, Cleveland, Albuquerque, Savannah, and Little Rock.

The Racketeering Indictment is being prosecuted by the Office’s Organized Crime Unit. Assistant U.S. Attorneys ARLO DEVLIN-BROWN and JENNIFER BURNS of the Organized Crime Unit, and BENJAMIN ALLEE of the White Plains Division are in charge of the prosecution. The Chervin Indictment is being prosecuted by the Office’s Complex Fraud Unit. Assistant U.S. Attorneys WILLIAM HARRINGTON and REBECCA ROHR are in charge of the prosecution. Assistant U.S. Attorney ALVIN BRAGG also assisted the investigation. Assistant U.S. Attorneys KAN MIN NAWADAY and MICHAEL LOCKARD of the Office’s Asset Forfeiture Unit are responsible for the forfeiture in both cases.

The charges contained in the Indictments are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

Defendants in U.S. v. Armen Kazarian, et al.

Defendant DOB Residence ARMEN KAZARIAN 4/26/1964 Glendale, CA DAVIT MIRZOYAN 10/25/1975 Glendale, CA ROBERT TERDJANIAN 11/14/1974 Brooklyn, NY ALEKSANDR AVETISYAN 2/23/1958 Sun Valley, CA HERAYER BAGHOUMIAN 1/1/1956 Burbank, CA POGOS SATAMYAN 12/3/1978 Glendale, CA ARTUR YEPISKOPOSYAN 2/13/1979 Burbank, CA VAGAN STEPANIAN 10/31/1957 Brooklyn, NY VARUJAN AMROYAN 9/16/1960 Brooklyn, NY JACOB POGOSIAN 9/11/1975 La Crescenta, CA KAREN SIMONIAN 6/19/1977 Glendale, CA VARTAN BOYZADZHYAN 7/29/1972 Glendale, CA ARTUR MANASARIAN 9/15/1962 Valley Village, CA GOURGEN MIRIMANIAN 3/16/1964 Glendale, CA MANUK MURADAKHANYAN 3/16/1974 Sherman Oaks, CA LIANA SOGHOYAN 6/23/1970 Sherman Oaks, CA TIKRAN TAKVORYAN 4/23/1966 Pasadena, CA GAYANE KHATCHATURYAN 4/6/1974 N. Hollywood, CA GAGIK KYURKCHYAN 10/7/1972 Valley Village, CA ANNA ZAICHIK 2/28/1956 Brooklyn, NY KAREN AHARONIAN 5/29/1977 Tarzana, CA ARMEN GRIGORIAN 1016/1970 Glendale, CA KAREN MARKOSIAN 3/5/1973 Burbank, CA ANNA TERMARTIROSYAN 7/5/1975 Glendale, CA MICHAEL DOBRUSHIN 2/22/1957 Brooklyn, NY SAMVEL HAKOPYAN 10/24/1974 N. Hollywood, CA RAFIK TERDJANIAN 3/6/1940 Brooklyn, NY

Ct Charge Defendants Maximum Penalties 1 Racketeering Conspiracy Armen Kazarian

Davit Mirzoyan

Robert Terdjanian

Aleksandr Avetisyan

Herayer Baghoumian

Pogos Satamyan

Artur Yepiskoposyan

Vagan Stepanian

Varujan Amroyan

Jacob Pogosian

Karen Simonian

Vartan Boyadzhyan

Artur Manasarian

Gourgen Mirimanian

Manuk Muradakhanyan

Liana Soghoyan

Tikran Takvoryan

Gayane Khatchaturyan

Gagik Kyurchyan

Anna Zaichik

Aron Chervin

Karen Aharonian Life imprisonment; fine of $250,000, or twice the pecuniary loss or gain; 3 years of supervised release; $100 mandatory special assessment. 2 Conspiracy to Commit Health Care Fraud Armen Kazarian

Davit Mirzoyan

Robert Terdjanian

Aleksandr Avetisyan

Herayer Baghoumian

Pogos Satamyan

Artur Yepiskoposyan

Jacob Pogosian

Karen Simonian

Vartan Boyadzhyan

Gourgen Mirimanian

Manuk Muradakhanyan

Liana Soghoyan

Tikran Takvoryan

Gayane Khatchaturyan

Gagik Kyurchyan

Anna Zaichik 10 years in prison; fine of $250,000, or twice the pecuniary loss or gain; 3 years of supervised release; $100 mandatory special assessment. 3 Conspiracy to Commit Bank Fraud Davit Mirzoyan

Robert Terdjanian

Artur Yepiskoposyan

Vartan Boyadzhyan

Gourgen Mirimanian

Anna Zaichik

Arman Grigorian

Anna Termartirosyan

Rafik Terjanian 30 years in prison; a fine of $1,000,000, or twice the gross pecuniary gain or loss; five years of supervised release; $100 mandatory special assessment. 4 Conspiracy to Commit Money Laundering Davit Mirzoyan

Robert Terdjanian

Herayer Baghoumian

Pogos Satamyan

Artur Yepiskoposyan

Jacob Pogosian

Karen Simonian

Manuk Muradakhanyan

Arman Grigorian

Karen Markosian

Anna Termartirosyan

Rafik Terjanian Twenty years in prison; fine of $500,000, or twice the pecuniary loss or gain; 3 years of supervised release; $100 mandatory special assessment. 5 Conspiracy to Commit Fraud in Connection with Identity Theft Davit Mirzoyan

Robert Terdjanian

Herayer Baghoumian

Pogos Satamyan

Artur Yepiskoposyan

Liana Soghoyan

Tikran Takvoryan

Gayane Khatchaturyan

Anna Zaichik Five years in prison; a fine of $250,000, or twice the pecuniary loss or gain; 3 years of supervised release; $100 mandatory special assessment. 6 Conspiracy to Commit Credit Card Fraud Davit Mirzoyan

Robert Terdjanian

Aleksandr Avetisyan

Vagan Stepanian

Varujan Amroyan

Karen Aharonian

Samvel Hakopyan 10 years in prison; a fine of $250,000, or twice the pecuniary loss or gain; 3 years of supervised release; $100 mandatory special assessment. 7 Conspiracy to Commit Immigration Fraud Robert Terdjanian

Vagan Stepanian

Michael Dobrushin Five years in prison; a fine of $250,000, or twice the pecuniary loss or gain; 3 years of supervised release;

Defendants in U.S. v. Aron Chervin, et al.

Defendant DOB Residence ARON CHERVIN 7/18/1947 North Brunscwick, NY ROBERT TERDJANIAN 11/14/1974 Brooklyn, NY VYACHESLAV DOBRER 3/22/1960 Dingman’s Ferry, PA HAROLD PINA 2/8/1969 Valley Stream, NY ROSS KUFLIK 1/19/1958 DelRay Beach, FL MICHAEL LAMOND 4/21/1970 Long Island City, NY VADIM CHERVIN 3/22/1960 North Brunswick, NY GALINA VOVK 3/19/1976 Brooklyn, NY VALIANTSINA LAHUN 9/4/1965 Brooklyn, NY LYNN BRAUNSTEIN 10/17/1961 Belle Harbor, NY WILLIAM GIBBS YURI ZELINSKY 6/17/1948 Brooklyn, NY LUBA GODIN 8/1/1978 Brooklyn, NY JUDSON DARIO JUST 5/3/1962 Brooklyn, NY BEAGY FRANCOIS 11/16/1955 Dacula, GA NATAN PEYSAKOV 1/30/1970 Brooklyn, NY MARTA ROMAN 8/11/1970 Merrick, NY MILANA NIKHMAN 12/23/1957 Staten Island, NY

Ct Charge Defendants Maximum Penalties 1 Conspiracy to Commit Mail Fraud and Health Care Fraud ARON CHERVIN

ROBERT TERDJANIAN

VYACHESLAV DOBRER

HAROLD PINA

ROSS KUFLIK

MICHAEL LAMOND

VADIM CHERVIN

GALINA VOVK

VALIANTSINA LAHUN

LYNN BRAUNSTEIN

WILLIAM GIBBS

YURI ZELINSKY

LUBA GODIN

JUDSON DARIO JUST

BEAGY FRANCOIS

NATAN PEYSAKOV MILANA NIKHMAN 20 years in prison; 3 years of supervised release; fine of $250,000, or twice the pecuniary loss or gain; $100 mandatory special assessment; forfeiture; restitution 2 Conspiracy to Sell Protected Medical Information ARON CHERVIN

MARTA ROMAN

BEAGY FRANCOIS 5 years in prison; 3 years of supervised release; $250,000, or twice the pecuniary loss or gain; $100 mandatory special assessment 3 Conspiracy to Launder Money ARON CHERVIN

ROBERT TERDJANIAN

VYACHESLAV DOBRER

MICHAEL LAMOND

GALINA VOVK

LUBA GODIN

WILLIAM GIBBS 20 years in prison; 3 years of supervised release; fine of 500,000, or twice the pecuniary loss or gain; $100 mandatory special assessment; forfeiture

newyork.fbi.gov/dojpressrel/pressrel10/nyfo101310.htm