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Dozens arrested in health care fraud schemes

By Terry Frieden, CNN Justice Producer
  • Group is described as an Armenian-American crime enterprise
  • 73 people in five states indicted; more than 50 in custody so far
  • Authorities say the schemes defrauded Medicare of $163 million

Washington (CNN) -- Federal authorities arrested more than 50 suspects Wednesday and smashed what they describe as an Armenian-American organized crime enterprise engaged in a nationwide scheme to defraud the Medicare program.

The Justice Department indicted 73 individuals in New York and four other states for allegedly defrauding Medicare and other health care programs of an estimated $163 million.

The government said 44 defendants were indicted in New York, along with 10 in California, seven in New Mexico, six in Ohio and six in Georgia.

Indictments said the schemes included billing Medicare from phantom clinics for unnecessary medical services, or services never performed.

"The emergence of international organized crime in domestic health care fraud schemes signals a dangerous expansion that poses a serious threat to consumers as these syndicates are willing to exploit almost any program, business, or individual to earn an illegal profit," said Acting Deputy Attorney General Gary Grindler.

By midday Wednesday, federal agents had taken at least 52 of the suspects into custody.

According to a multiple-agency announcement, the charges ranged from fraud and conspiracy to money laundering, identity theft and immigration fraud.

Maximum penalties upon conviction range from 10 years to life in prison.

Justice prosecutors said the defendants would be tried in the five states where they were indicted.