Woman Who Orchestrated Health Care Fraud Scheme That Submitted Nearly $25 Million in Bogus Bills Sentenced to More Than Seven Years

LOS ANGELES—A North Hollywood woman who worked in the health care industry was sentenced this afternoon to 76 months in federal prison for orchestrating a scheme that submitted nearly $25 million in fraudulent bills to Medicare for services and supplies 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, was sentenced by United States District Judge Margaret M. Morrow.

Artsruni, who often used the names “Mary” and “Rose,” was sentenced after pleading guilty earlier this year to one count of health care fraud and one count of money laundering. In addition to the prison term, Judge Morrow ordered Artsruni to pay $9,624,556 in restitution to the Medicare program.

In a plea agreement filed in United States District Court, Artsruni admitted that she defrauded Medicare in a number of ways. In one part of the scheme, Artsruni had physician’s 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.

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 $9.6 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. Artsruni 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. 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.

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, has pleaded guilty (see: http://www.justice.gov/usao/cac/Pressroom/2014/038.html) and is scheduled to be sentenced by Judge Morrow on September 8.

Charges also have been filed against three others associated with the money laundering and health care fraud schemes (see: http://www.justice.gov/usao/cac/Pressroom/2014/040.html). The three defendants in this case have pleaded not guilty and are scheduled to go on trial in early 2015.

All of these cases are the products 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.

The cases were brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Central District of California.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.