San Fernando Valley Woman Pleads Guilty to Federal Charges in $25 Million Health Care Fraud Case

LOS ANGELES—A North Hollywood woman who worked in the health care industry pleaded guilty today to federal charges for orchestrating a scheme that submitted nearly $25 million in fraudulent bills to Medicare for services and supplies, including power wheelchairs and diagnostic tests that were medically unnecessary and sometimes were never provided.

Susanna Artsruni, 46, who formerly owned a durable medical equipment (DME) company and worked at a number of medical clinics in Los Angeles, pleaded guilty this afternoon before United States District Judge Margaret M. Morrow. Artsruni, who often used the names “Mary” and “Rose,” pleaded guilty to one count of health care fraud and one count of money laundering.

In a plea agreement filed last year in United States District Court, Artsruni admitted that she defrauded Medicare in a number of ways. In one part of the scheme, Artsruni had physicians’ assistants at three Los Angeles medical clinics sign prescriptions and orders for medically unnecessary DME and diagnostic tests that were later referred to other Medicare providers that billed for the equipment and tests. Artsruni also caused the three clinics to bill Medicare for medically unnecessary services. Further, Artsruni fraudulently billed Medicare on behalf of her own DME supply company, Midvalley Medical Supply in Van Nuys, for medically unnecessary DME based on referrals from one of the three medical clinics.

In total, Artsruni caused more than $24.8 million in fraudulent claims to be submitted to Medicare, which paid more than $9.2 million on the bogus bills.

Artsruni also admitted that she wrote checks totaling more than $35,000 from the Midvalley bank account to three corporations that had no connection to the medical industry and apparently had not provided any legitimate business services to Midvalley. Artrsuni admitted that she wrote these checks to conceal the nature of the funds as the proceeds of health care fraud and used the three corporations to launder these funds.

At the time that she worked at two of the clinics and wrote one of the checks to launder the proceeds of her fraud, Artsruni was free on bond in another health care fraud case (United States v. Artsruni, CR08-209-CAS). Although the terms of her pre-trial release in the 2008 case dictated that she not commit crimes and forbid her from working at medical facilities, Artsruni concealed her activities from her pre-trial services officer and engaged in the fraudulent conduct that led to most of the losses suffered by Medicare in the second case.

As a result of today’s guilty pleas, Artsruni faces a statutory maximum sentence of 30 years in federal prison. Judge Morrow is scheduled to sentence Artsruni on April 14.

A second defendant in the case, Erasmus Kotey, a physician’s assistant who worked with Artsruni in a medical clinic on North Vermont Avenue in Los Angeles, is scheduled to go on trial before Judge Morrow on April 8.

The case against Artsruni and Kotey is the product of an investigation by the Federal Bureau of Investigation; the U.S. Department of Health and Human Services, Office of Inspector General; and IRS-Criminal Investigation.

Contact:
Assistant United States Attorney Kristen A. Williams
Major Frauds Section
(213) 894-0526

Assistant United States Attorney Cathy J. Ostiller
Major Frauds Section
(213) 894-6159