Yesterday the United States Department of Justice simultaneously unsealed criminal indictments in five districts, arrested 52 criminals and announced arrest warrants for two dozen more in what was billed as the single largest health care fraud bust in history.
It seems traditional criminal activities such as the drug trade, trafficking in illegal arms, extortion and murder are just getting too dangerous — the culprits are alleged to have been an organized crime outfit from Armeniaof all places. Certainly the defendants made money that would make Don Corleone blush — the total amount of the fraud is thought to have been north of $163 million.
Without question, if a person is inclined towards criminal activity health care fraud in the United States is a tough to beat — $163 million dollars and without the personal risk involved when a person does business with international drug suppliers.
The defendants are charged with engaging in numerous fraud activities, including highly-organized, multi-million-dollar schemes to defraud Medicare and insurance companies by submitting fraudulent bills for medically unnecessary treatments or treatments that were never performed. According to the indictments, the defendants allegedly stole the identities of doctors and thousands of Medicare beneficiaries and operated at least 118 different phony clinics in 25 states for the purposes of submitting Medicare reimbursements.
Organized criminal gangs from Armenia may have an easy gig billing Medicare and Medicaid — it sure beats going head-to-head with the Mexican drug cartels, who are known to play hardball by executing entire villages, dumping the rotting corpses of their adversaries on Mexican highways during rush hour by the dozen and stuff like that — but the criminal sentences these Armenians face are still pretty severe.
The racketeering charges carry a maximum penalty of life in prison and a $250,000 fine. The health care fraud and conspiracy to commit health care fraud charges each carry a maximum penalty of 10 years in prison and a $250,000 fine. The conspiracy to commit bank fraud charges each carry a maximum penalty of 30 years in prison and a fine of $1 million. The conspiracy to commit money laundering charges each carry a maximum penalty of 25 years in prison and a $500,000 fine. The conspiracy to commit money laundering charges each carry maximum penalties of 20 years in prison and a $500,000 fine. The conspiracy to commit fraud in connection with identity theft charges carry a maximum penalty of five years in prison and a $250,000 fine. The aggravated identity theft charges each carry a required two-year consecutive prison sentence to any other sentence imposed, the conspiracy to commit credit card fraud charges carry a maximum penalty of 10 years in prison and a $250,000 fine. The conspiracy to commit immigration fraud charges carry a maximum penalty of five years in prison and a $250,000 fine.
In other words, these guys aren’t getting out of prison alive.
With regard to the technicalities of the federal False Claims Act, this case provides yet another example of what I mean by an “objectively false” FCA claim. As regular readers know, I am generally not a fan of “failure to render services” type cases. Generally speaking, unless we are talking about “Houdini claims” (i.e., claims for services in two separate cities at the same time) a relator and/or the government will have the devil’s own time trying to prove that Dr. Smith wasn’t seeing a patient at any given time, or that a physician’s assistant wasn’t properly supervised by a doctor, or something like that.
But notice what these Armenians did — they set up phony clinics, using stolen Medicare billing information…talk about an objectively false claim.