The practices of modern organized crime groups are not limited to the stereotypical racketeering actions made famous during the Prohibition Era or drug trafficking schemes popularized by Hollywood. Organized crime today is involved in sophisticated and elaborate white collar crime schemes that have the capability of stretching across the world.
Recently, dozens of arrests were made across the country in connection to groups of Armenian scammers who allegedly tried to defraud Medicare out of $163 million in services that were never actually provided. In the creation of their conspiracy, the scammers would first become licensed Medicare providers in order to submit dubious claims. After being billed by the imposter office, the government would pay money to the groups’ bank accounts. Physician information was stolen by the scammer groups to setup their fictitious medical business.
The scammers used an assortment of tactics to facilitate their goal. To make a profit, the groups would employ criminals to provide a service, which would be inflated upon submittal. As an example, an individual working with the group would provide a scooter worth $1,000. The group would submit a claim to Medicare for a more expensive motorized wheelchair worth six times as much. Other claims the groups submitted were completely fake. The groups also paid people to be fake patients, so that they could bill Medicare for services supposedly provided. Some scammers even paid doctors to provide needless tests on victims of accidents. The excess treatment would then be billed to the federal government.
Medicare paid $35 million of the $163 million in fraudulent medical billings. Armenian criminal groups are known for their ability to identify weaknesses in government systems. Many were thought of as heroes when Armenia was a Soviet republic.
Source: StarTribune.com, “Multimillion Dollar Medicare Fraud Highlights Sophistication of Armenian Organized Criminals,” Thomas Watkins, 10/16/10