Six People Indicted as Part of International Organized Crime Ring that Stole Identities and Submitted $44 Million in Fraudulent Charges to Medicare

An indictment was unsealed today charging six people with stealing identities of doctors and patients in an effort to bill Medicare for more than $40 million worth of fraudulent charges, Steven M. Dettelbach, United States Attorney for the Northern District of Ohio, C. Frank Figliuzzi, Special Agent in Charge of the Federal Bureau of Investigation’s Cleveland office and Special Agent in Charge Lamont Pugh III, Health and Human Services Office of Inspector General, Office of Investigations, announced today.

The indictments were unsealed as part of a nationwide a sweep in which 73 people were indicted in New York, Georgia, California, and New Mexico. These people are believed to be part of an Armenian organized criminal enterprise.

“This is the new face of organized crime,” Dettelbach said. “It used to be what you saw in 'The Godfather' but now it’s someone in Eastern Europe with Internet access and dozens of people on the ground in the United States, stealing hundreds of millions of dollars. This money is being sucked right out of our health care system.”

“Organized Medicare fraud of this magnitude doesn’t just defraud some faceless bureaucracy, it rips money from the wallets of our parents, our grandparents, and eventually all of us,” Figliuzzi said.

“Identity theft now poses a serious threat to the Medicare program,” Pugh said. “As today’s indictments and arrests demonstrat, OIG is committed to combating crime rings perpetrating these schemes.”

Those indicted in U.S. District Court in Cleveland are: Karen Chilyan, age 25, of Burbank, Calif.; Eduard Oganesyan, age 34, of Glendale, Calif.; Lilit Galstyan, age 47, of Encino, Calif.; Arus Gyulbudakyan, age 30, of Woodland Hills, Calif.; Julieta Ghazaryan, age 48, of Glendale, Calif. and Marine Movsisyan, age 43, of Studio City, Calif.

The charges include one count of conspiracy to commit mail fraud, wire fraud and health care fraud; 12 counts of mail fraud; five counts of wire fraud; four counts of health care fraud; three counts of aggravated identity theft and one count of conspiracy to commit money laundering.

Chilyan, Oganesyan and Gyulbudakyan were arrested this morning. Galstyan, Ghazaryan, and Movsisyan remain at large.

The indictment alleges that the group, lead by Chilyan and Oganesyan, unlawfully obtained personal identifier information of medical doctors, including their dates of birth, Social Security numbers and medical licensing information.

Beginning in 2006, Chilyan, Oganesyan and others then leased commercial office space to establish false front practice locations for doctors or businesses purportedly employing the doctors whose identities were stolen. These locations included offices in Canfield, Ohio. Chilyan and others then submitted Medicare Provider Applications in the names of the doctors whose identities were stolen, according to the indictment. Chilyan, Oganesyan, Galstyan, Ghazaryan,, and Movsisyan then opened bank accounts in the names of those doctors, all for the purpose of receiving the proceeds from false and fraudulent billings to Medicare, according to the indictment.

The group also unlawfully obtained the identities of Medicare recipients, which they then used to submit false and fraudulent bills to Medicare for services that were never provided, according to the indictment.

They submitted bills for more than $44 million worth of false services to Medicare, about $19 million of which were paid out, according to the indictment.

Once the ring obtained the fraudulent proceeds from Medicare, some members wrote checks from their bank accounts and deposited them into secondary bank accounts in the names of shell businesses. The money was then deposited through checks into another series of bank accounts set up in the name of the shell companies. Those second- and third-tier accounts were designed to launder the money illegally obtained from Medicare, according to the indictment.

The group stole the identities of 12 doctors, including two from Ohio. They stole the identities of hundreds of Medicare recipients, including four from the Northern District of Ohio, according to the indictment.

If convicted, the defendants’ sentences will be determined by the court after review of factors unique to this case, including each defendant’s prior criminal record, if any, the defendant’s role in the offense and the characteristics of the violations. In all cases the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

This case is being prosecuted by Assistant United States Attorneys Michael L. Collyer and Robert W. Kern after an investigation by the Cleveland Office of the Federal Bureau of Investigation and the Department of Health and Human Services Office of Inspector General, Office of Investigations.

An indictment is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.