Arrests In $1.4 Million Medi-Cal And Medicare Fraud Scheme

ca.gov, Jan 04, 2007

Attorney General Bill Lockyer today announced the arrest of three Los Angeles residents on allegations that they bilked the Medicare program out of more than $1.4 million over a two-year period while also trafficking in Medi-Cal beneficiary information. Among the crimes committed by the trio are the fraudulent reporting of medical services that were never provided and billing for services allegedly provided to patients who were already deceased.

Rudik Avakyan, Gayane Abramyan and Lusine Khatchatryan were officially charged yesterday in Los Angeles County Superior Court with a felony complaint alleging 37 counts of grand theft, attempted grand theft and filing of false claims. Agents from the Attorney General's Bureau of Medi-Cal Fraud and Elder Abuse (BMFEA) arrested Avakyan yesterday, Abramyan this morning, and Khatchatryan intends to voluntarily surrender later today. BMFEA attorneys will prosecute the case. Bail has been requested at $1.1 million for Avakyan, and $100,000 each for both Abramyan and Khachatryan.

“Medicare and Medi-Cal fraud not only rips off taxpayers, it also puts public health at risk by limiting the amount of resources available to help those truly in need,” Lockyer said. “These defendants must be held accountable for allowing their greed to turn to fraud.”

The arrests stem from a year long investigation by the BMFEA into a sophisticated fraud operation led by Avakyan, owner and operator of the Workplace Industrial Management Clinic, with the assistance of his purported “medical assistants”, Abramyan and Khatchatryan. The scheme started with the defendants use of so-called “cappers” to recruit Medi-Cal and Medicare card holders at Los Angeles’s venerable Union Rescue Mission - one of the country's largest missions which is dedicated to helping poor men, women and children in downtown Los Angeles. The defendants paid the cappers $350 for each patient they brought to Avakyan’s clinic. The capper’s activity caused Mission staff to become suspicious, so they reported their concerns to Assembly Speaker Fabian Nunez who in turn alerted the Attorney General to the potential illegal activity. Read more at ca.gov