Prison Sentence in $70 Million “Phony Patient” Recruiting Scheme to Defraud NY Medicaid and Medicare

Following the dismantling of a Medicaid - Medicare fraud ring involving one Brooklyn clinic, two Queens clinics, and ten defendants; the US Attorney for the Southern District of New York has announced the first conviction in the case.

Prison Sentence in $70 Million “Phony Patient” Recruiting Scheme to Defraud NY Medicaid and Medicare

After all defendants pled guilty, Victor Lipkin, owner of one of the clinics, was one of the first to be sentenced.

Lipkin will serve five years and will pay in excess of $8 million in restitution and forfeiture. In addition to his prison term, Lipkin will serve three years of supervised release.

According to allegations, Lipkin and Vadim Zubkov were the masterminds of a scheme to defraud New York Medicaid and Medicare, operating out of three clinics, which have been identified only as the Avenue V Clinic in Brooklyn, the Hillside Clinic, and the Elmhurst Clinic.

Alongside Lipkin and Zubkov, Eduard Zavalunov, Nokoloz Chochiev, Anatoliy Fatkhov, Mariana Swaffar, Jacqueline Pinez, Jonathan Oliver, Jason Brissett, Gilbert Trotman, and Giorgi Buleishvili allegedly conspired to recruit and pay kickbacks to “patients” (often homeless people), to take medically unnecessary tests that would later be billed to Medicare, Medicaid, and private insurers.

In total, the three clinics billed nearly $70 million in only 4 years, in connection with the scheme. The defendants have all pled guilty to conspiracy to commit wire fraud, mail fraud, and healthcare fraud.

On the occasion of defendant Zavalunov´s guilty plea, former Manhattan U.S. Attorney Preet Bharara commented, “Eduard Zavalunov has admitted to his role in this $70 million healthcare fraud conspiracy. Zavalunov and his conspirators recruited people from soup kitchens and welfare offices and arranged for them to get medically unnecessary procedures, all so that they could falsely bill Medicaid, Medicare and private insurers.”

On January 13th, 2017, defendant Jacqueline Pinez, who had a less prominent role in the scheme, was sentenced to six months in prison. The rest of the defendants are still awaiting sentencing.

Recruiting Patients w/Cash for Unnecessary Medical Tests – Then Bill Medicaid & Medicare

According to evidence and allegations, Lipkin, Pinez, and their co-conspirators, “recruited financially disadvantaged and homeless people insured by Medicare and/or Medicaid (the “Phony Patients”) to undergo unnecessary medical tests, typically performed by unlicensed personnel, at the clinics in exchange for cash, and then billed the insurers for administering those unnecessary tests.”

In order to bill Medicaid, Medicare, and private insurers, Lipkin and Zubkov allegedly recruited a licensed physician and used their name in billings. Some of the tests often billed included sleep tests and stress tests. The fact that Zavalunov, Lipkin, Zubkov, and Buleishvili operated and controlled the medical clinics where tests were supposedly performed also constitutes a violation of New York law, which states that only licensed physicians can have such a role.

Scheme: Runners Recruit Phony Patients

According to allegations, the scheme´s “Runners” would recruit “Phony Patients,” and proceed to instruct them on how to fill medical forms in order to simulate the need for medical tests. In many cases, individuals who were not physicians would later administer tests to the “Phony Patients.”

Defendant Chochiev was also allegedly in charge of making “threats of physical violence to individuals who Chochiev believed owed money to the scheme members.”

Medicaid Fraud Units (MFCUs) are committed to preventing and prosecuting this type of violations. In fiscal year 2016, MFCUs spent over $47 million to combat fraud in New York, the highest expenditure in the nation. Civil recoveries connected to Medicaid fraud in the State of New York amounted to $200 million.

Law enforcement can’t be everywhere and as such, many NY Medicaid and Medicare fraud prosecutions begin with a tip from an insider.

Both New York and Federal false claims laws call for cash rewards to tipsters who report healthcare billing cheats.

If you are aware of a physical, clinic, hospital, ambulance company or other medical company doing this in New York – act quickly to ensure your cash reward eligibility. Give us a call or email us for a confidential assessment of your information and reward claim. 888.742.7248 or EMAIL US

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