Brooklyn Medicare Fraud Strike Force Charges 12 Individuals for Participating in Health Care Fraud Schemes Totaling More Than $95 Million

WASHINGTON—Twelve individuals, including three medical doctors, a doctor of osteopathy and a chiropractor, were charged today in the Eastern District of New York for their roles in separate health care fraud schemes that resulted in the submission of more than $95 million in false claims to the Medicare program, announced the Department of Justice, the FBI and the Department of Health and Human Services (HHS).

The defendants are charged with a variety of health care fraud-related and money laundering offenses in two indictments and a superseding indictment filed in federal court in Brooklyn, N.Y. Eleven defendants were arrested or surrendered to authorities today. The last defendant is expected to surrender at a later time.

“Today, 12 individuals—including three medical doctors and other licensed health professionals—were charged with participating in sophisticated Medicare fraud and money laundering schemes throughout Brooklyn and Queens,” said Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division. “According to court documents, these defendants sought to profit by stealing millions of taxpayer dollars from the Medicare program and laundering the proceeds of this illegal activity. The Medicare Fraud Strike Force, which operates in nine cities across the country, will continue to aggressively pursue those intent on cheating American taxpayers and stealing from the Medicare program.”

“These defendants allegedly invested significant time and energy in subterfuge to conceal their ill gotten government funds. Money laundering is a critical part of large scale health care fraud schemes and often the most difficult piece to unravel. Law enforcement will not be deterred by the schemes and evasions used to hide these proceeds of fraud. We will ‘follow the money’ and bring to justice all who would engage in financial transactions designed to disguise the proceeds of Medicare fraud,” stated Loretta E. Lynch, U.S. Attorney for the Eastern District of New York. Ms. Lynch expressed her grateful appreciation to the FBI and HHS-OIG, the agencies responsible for leading the government’s investigation, and thanked the New York State Attorney General’s Office for its assistance.

“What all these criminal schemes have in common is the exploitation of Medicare,” said FBI Assistant Director in Charge Janice K. Fedarcyk. “A program to help seniors manage the costs of health care was here abused to line the pockets of unscrupulous doctors and others. Medicare and Medicaid are taxpayer funded, so the outrageous conduct of these defendants victimized everyone. The FBI is committed to policing health care fraud, to catch the crooks and to rein in costs.”

“Physical therapy fraud and illegal financial kickbacks remain a problem in the Brooklyn area,” said Thomas O’Donnell, Special Agent in Charge of the HHS-Office of Inspector General’s (OIG) New York Region. “So, along with federal and state law enforcement partners, we will target these and similar schemes that divert valuable, scarce Medicare funds.”

According to a superseding indictment, five defendants are charged for their roles in a scheme to launder the proceeds of Medicare fraud at three Brooklyn-area medical clinics: Bay Medical Care PC, SVS Wellcare Medical PLLC and SZS Medical Care PLLC. These clinics allegedly paid kickbacks to Medicare beneficiaries and used the beneficiaries’ names to bill Medicare for approximately $71 million in services that were medically unnecessary and never provided. Larisa Shelabadova, 34, Alexander Zaretser, 31, Anatoly Kraiter, 33, Vladimir Kornev, 52, and Yelena Galper, 38, all of Brooklyn, are charged for participating in the money laundering scheme. The superseding indictment also charges five other individuals who were previously charged for their roles in the scheme in the original indictment filed in October 2010.

A second indictment alleges that six defendants, including three medical doctors and a chiropractor, participated in a fraud scheme at URI Medical Center and Sarang Medical PC, two medical clinics in Flushing, N.Y. The defendants allegedly submitted approximately $11.7 million in false claims to the Medicare program for physical therapy, electric stimulation treatments and other services. Ho Yon Kim, 85, of Flushing; Hoi Yat Kam, 57, of Flushing; Peter Lu, 36, of New York City; John Knox, 54, of Bronx, N.Y.; Elaine Kim, 50, of Bayside, N.Y.; and Gilbert Kim, 59, of Bayside, allegedly provided a variety of spa services such as massages and facials, and billed Medicare for physical therapy and other services that were medically unnecessary and never provided. The indictment alleges that the defendants also recruited Medicare beneficiaries to their clinic by offering lunches and dancing classes, in exchange for the beneficiaries providing their Medicare numbers to be billed for medical services that they did not need and never received.

Emma Poroger, 56, of Staten Island, N.Y., is charged in a third indictment for participating in a scheme to defraud Medicare of approximately $13 million. Poroger, a doctor of osteopathy, allegedly billed Medicare for a variety of services she purported to provide, including vitamin infusion therapy, sleep studies, nerve conduction tests and duplex scans, that were medically unnecessary and never provided.

Today’s charges were announced by Assistant Attorney General Breuer of the Justice Department’s Criminal Division, U.S. Attorney Lynch of the Eastern District of New York, FBI Assistant Director in Charge Fedarcyk and HHS-OIG Special Agent in Charge O’Donnell. The cases were brought as a part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York.

Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.

Since their inception in March 2007, Medicare Fraud Strike Force operations in nine locations have charged more than 1,140 defendants who collectively have falsely billed the Medicare program for more than $2.9 billion. In addition, the HHS Centers for Medicare and Medicaid Services (CMS), working in conjunction with the HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

The cases announced today are being prosecuted by Trial Attorneys Sarah Hall and Katherine Houston from the Fraud Section of the Justice Department’s Criminal Division and Assistant U.S. Attorneys Stephen J. Meyer and William Campos from the Eastern District of New York. The cases are being investigated by agents from the FBI and HHS-OIG. The New York State Attorney General’s Office and CMS provided assistance.

An indictment is merely a charge and defendants are presumed innocent until proven guilty.

To learn more about HEAT, go to: www.stopmedicarefraud.gov.