Russian Diplomats Scammed Medicaid for $1.5 Million, Complaint Claims They allegedly fraudulently used Medicaid to cover pregnancy and birth costs.

Dec. 5, 2013  -- Four dozen Russian diplomats and their spouses have fraudulently been using Medicaid to cover the costs of pregnancy and child birth over the last decade, costing American taxpayers $1.5 million, the FBI said today in a criminal complaint.

The complaint unsealed today claims that from 2004 to 2013 there were 63 births to Russian diplomats stationed in New York, and 58 of them were paid for by Medicaid.

"Being a diplomat does not give you the right to commit health care fraud," FBI special agent in charge of the New York field office George Venizelos said at a news conference today.

Medicaid is designed to help low-income individuals and families afford health care. Recipients must generally be U.S. citizens or qualified immigrants, the complaint explains. Diplomats, including their spouses and children, are not considered to be qualified immigrants.

However, proof of U.S. citizenship is not required for pregnant women completing an "Access NY Healthcare" application, according to the documents, because the unborn child is presumed to acquire citizenship when they are born in the country.

Federal prosecutors allege the diplomats under-reported their incomes on the applications in order to qualify for Medicaid benefits.

The complaint states that before, during and after receiving Medicaid benefits those same diplomats "spent tens of thousands of dollars" on luxury goods at Swarovski, Tiffany & Co., Bloomingdale's and Jimmy Choo.

"The amount of money spent on these luxury items was inconsistent with the grossly underreported incomes," Venizelos said.

"The pattern of spending by the Russian diplomats and their spouses, including the defendants, is generally inconsistent with the grossly underreported incomes claimed on the Medicaid applications," the complaint states.

The goods included luxury watches, clothes, shoes, jewelry, electronics, concert tickets and robotic cleaning devices, the complaint said.

"All sorts of lavish spending was going on," U.S. Attorney Preet Bharara said at the news conference.

The complaint asks that 49 accused Russian diplomats and spouses be arrested, but because of diplomatic immunity for embassy officials none have been arrested.

"All of these defendants have diplomatic immunity due to the nature of their work for the Russian government," Bharara said, adding the State Department can ask Russia to revoke immunity status if it so chooses.

The 62-page complaint details the alleged actions of each of the people and couples involved.

One couple, Andrey Artasov and Nataliya Artasova, have been married since around 2004, the complaint states.

Artasov is currently employed as a First Secretary at the Mission and they have State Department issued diplomatic visas.

In November 2008, Artasova applied for pregnancy Medicaid benefits and allegedly falsely stated that her husband earned only $2,900 a month, the complaint states.

"Based on the misrepresentations in the initial application, Artasova received almost $1,200 from November 2008 to March 2009, in Medicaid benefits that she would not otherwise have been entitled to," the documents state.

In a 2007 credit card application, Artasov said his income was $60,000 as a Second Secretary. The next year, the year they applied for Medicaid, the couple paid for over $48,000 in purchases on the credit card, including $4,500 at Swarovski and $3,500 at Apple, according to the complaint.

The FBI stated that the couple would not have been eligible for Medicaid benefits if they had truthfully reported Artasov's income.

The Russian Mission to the United Nations did not immediately respond to request for comment.