Southern California Doctor Sentenced to More Than Three Years in Prison for Role in Medicare Fraud Scheme

SACRAMENTO, CA—Dr. Emilio Louis Cruz, III, 61, of Carson, California, was sentenced today by United States District Judge Morrison C. England, Jr. to three years and two months in prison and ordered to pay $601,581 in restitution for his role in a conspiracy to commit Medicare fraud, United States Attorney Benjamin B. Wagner announced.

According to court documents, Cruz earned an undergraduate degree from Johns Hopkins University and his medical degree from Yale University. He held medical licenses in three states and was board certified in neurology. According to his plea agreement and the testimony heard at the trial of Cruz’s co-defendants, doctors Ramanathan Prakash, Alexander Popov, and Lana LeChabrier, and a man named Vardges Egiazarian owned and controlled three health care clinics in Sacramento, Richmond, and Carmichael from February 2006 through August 2008. Over this time period, Cruz ran the practice at the Carmichael clinic on 3609 Mission Avenue. He established a Medicare provider number for the clinic and established a bank account into which Medicare funds were deposited. Hundreds of claims were submitted to Medicare seeking reimbursement for services allegedly performed at the Carmichael clinic under Cruz’s care. Cruz, however, never treated a single patient. Indeed, during the majority of the time that the Carmichael clinic operated, he was living and practicing in North Dakota. A similar pattern was followed at the other two clinics operated by Egiazarian, and not one of the physicians submitting bills to Medicare ever treated a single patient.

According to evidence at trial, the clinic’s patients were primarily elderly and non-English speaking. They were recruited and transported to the clinics by individuals who were paid according to the number of patients they brought to the facilities. Rather than being charged a co-payment, the patients were paid for their time and the use of their Medicare eligibility, generally $100 per visit. False charts were created stating that each patient received comprehensive exams and a broad array of diagnostic tests. Few of these tests were ever performed, none were performed based on any medical need, and clinic employees filled out other portions of the charts using preprinted templates. Some clinic employees admitted to performing various tests on themselves, and placing the results in patient files.

In all, the three clinics submitted more than $5 million worth of fraudulent claims to Medicare, $1.7 million of which was actually paid. With respect to claims submitted for services purportedly provided by Cruz at the Carmichael clinic, Medicare paid $601,581.

The only defendants to go to trial, doctors Prakash, Popov, and LeChabrier, were found guilty by a jury on July 8, 2011, of conspiracy to commit healthcare fraud and various counts of health care fraud.

This case is the product of an investigation by the Office of the Inspector General for the Department of Health and Human Services and the Federal Bureau of Investigation. Assistant United States Attorneys Philip Ferrari and Jean M. Hobler are prosecuting the case.

Others who were charged in this matter include:

• Ramanathan Prakash, a doctor involved with the Sacramento clinic, is currently serving 10 years in prison.
• Lana LeChabrier, a doctor involved with the Richmond clinic, is currently serving six and a half years in prison.
• Vardges Egiazarian pleaded guilty early in the case and has served his six-and-a-half years' sentence.
• Alexander Popov, a doctor involved with the Sacramento clinic, is currently serving eight years and one month in prison.
• Nazaret Salmanyan, an unlicensed ultrasound technician who worked at all three clinics, pleaded guilty and on November 14, 2013, was sentenced to 20 months in prison.
• Derrick Johnson, a doctor involved with the Richmond clinic, pleaded guilty and is awaiting sentencing.
• Zoya Belov, a nurse licensed in Russia but not the United States who worked at all three clinics, pleaded guilty and is awaiting sentencing.
• Liw Jiaw Saechao, aka Jenny Saechao, recruited patients, pleaded guilty and is awaiting sentencing.
• Migran Petrosyan, a co-owner of the Richmond clinic, pleaded guilty, and on December 5, 2013, was sentenced to 27 months in prison.
• Shushanik Martirosyan, a medical biller who submitted claims to Medicare for all three clinics, pleaded guilty and on October 24, 2013, was sentenced to 18 months in prison.