UPDATE 1/30/12 @ 5:30 p.m.
CHARLESTON, W.Va. (WSAZ) -- An Armenian citizen has been sentenced in West Virginia for his role in a health care scheme intended to defraud more than $4 million from Medicare.
A federal judge in Charleston on Monday sentenced the 42-year-old defendant, Sargis Tadevosyan, to six years in prison. He was found guilty in November on felony charges of conspiracy to commit health care fraud and aggravated identity theft.
According to the government, the charges stem from a scheme involving "false front providers." That involves a company posing as a Medicare health care provider and unlawfully billing Medicare as a legitimate service.
Investigators say they discovered seven false front providers established in and around Charleston.
U.S. Attorney Booth Goodwin said Monday's prison term was likely the longest involving health care fraud in the state.
Sargis Tadevosyan, 41, was on trial in Charleston.
Testimony got underway at the U.S. District Court on Monday. After three days of testimony, the jury started deliberating Thursday morning.
A verdict was reached about 2 p.m.
Prosecutors say Tadevosyan is just one of three charged in the case and they are apart Russian mob.
Investigators say the men rented office suites in and around Charleston and set up false businesses and bank accounts.
Tadevosyan was found guilty on mail fraud and identity theft, according to a court spokesperson.
He will be sentenced on January 26 at 1:30 p.m.
The U.S. Attorney's Office in Charleston indicted Sargis Tadevosyan, 41, Igo Shevchuk, 21, and Arsen Bedzanyan, 23.
They are all charged with Conspiracy to Commit Health Care Fraud.
According to the indictment, from fall of 2010 to May 6, 2011, the men unlawfully obtained money through false Medicare claims.
The U.S. Attorney's Office says the men created five "phantom clinics", which are health care providers that only exist on paper and had no doctors or patients. The indictment states the men rented an office in or near Charleston, W.Va. for each phantom clinic and would give this address to Medicare.
According to the indictment, Shevchuk and Bedzhanyan used fictitious or stolen identities and opened bank accounts for the phantom clinics, which were used to receive Medicare payments. They are also accused of fraudulently obtaining thousands of identities, including names, addresses, social security numbers and date of births of legitimate Medicare beneficiaries.
According to the indictment, the men stole the identity of a doctor, including the doctor's birthday, social security number and medical license number. They are accused of submitting bills to Medicare services, rendered by this doctor, whose identity was stolen, to numerous patients, also stolen identities. The bills were fictitious, submitted on behalf of beneficiaries, who never received the services. They were submitted by a doctor, who never performed the services.
The three men are accused of traveling from New York to Charleston to make changes to a bank account for a phantom clinic to allow for the electronic transfer of funds.
They are accused of filing paperwork to incorporate a business entity in West Virginia with the West Virginia Secretary of State's Office, often listing a business purpose as management.
Keep clicking on WSAZ.com for the latest information with this story.
Their plan was to collect millions in false Medicare claims. That's before federal agents busted up the mob.
U.S. Attorney Booth Goodwin says there's a current epidemic of Medicare fraud nationwide. And, he says a group of Russians figured a sleepy West Virginia city would be ripe for a massive federal heist.
But, we found that if this fraud is so prevalent, so are the watchdog agencies that saw something funny going on in and around Charleston.
Shocked employees at Lester Raines Honda took some pictures May 6 when a S.W.A.T. team swooped in and arrested three Russians on conspiracy and fraud charges. The cover story was they were in town to look for a car
Goodwin says, in early April, a Russian crime ring rented office suites in Dunbar, South Charleston and in downtown Charleston along Capitol and Quarrier streets. He says they set up false companies and opened bank accounts and began to file $4 million in false Medicare claims.
“We caught it in time that none of the money got to the bad guys,” Goodwin said.
He says, before they got a penny, the feds broke up a Russian crime machine that was well oiled and ready to go.
And why would these Russians who give California and New York addresses even come to West Virginia?
“Why come to sleepy little West Virginia?" Goodwin said. "This is where the soft spots are.”
Goodwin says similar criminal fraud schemes are springing up throughout the country.
We’re told more federal arrests may come in this ongoing investigation.
These suspects had a network of false front offices, couriers and electronic bank transfers ready to roll. Now, their felony cases will roll - to a federal grand jury.
The three Russians arrested so far will remain behind bars. The judge denied any release on bond, worrying they could be a flight risk.
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