Three Glendale men who were arrested last week on suspicion of taking part in the largest Medicare fraud scheme in history were ordered to remain in jail on Tuesday because they were considered a flight risk and a danger to the economy, Glendale News-Press reports.
U.S. District Judge Fernando M. Olguin on Tuesday declined bail for Vartan Boyzadzhyan, 38, Armen Kazarian, 46, and Herayer Baghoumian, 54, at a drawn-out detention hearing in the Roybal Federal Building in downtown Los Angeles. They are accused of taking part in a scheme to defraud Medicare of $163 million.
The men were ordered to remain under the custody of U.S. Marshals and transported to New York, where they will face healthcare fraud charges stemming from the scheme that involved dozens of people who established phantom medical clinics and submitted bogus claims to Medicare.
The federal healthcare program paid out $35 million for the fraudulent claims.
Assistant U.S. Atty. Jennifer Burns, who works in the Southern District in New York, argued Boyzadzhyan demonstrated a danger to the community and a flight risk if he were granted bail.
"The defendant was involved in every aspect of this scheme," Burns said.
The federal indictment alleges that Boyzadzhyan and dozens of others stole the identities of doctors to bill the bogus claims.
They also reportedly set up at least 118 medical clinics in 25 states and billed more than $100 million in fraudulent claims to Medicare, according to court documents.
Burns said Boyzadzhyan also set up bank accounts and was involved in identity theft.
Agents who searched his Glendale home found three U.S. Treasury checks in other people’s names that totaled roughly $29,000, FBI Agent Jeff Koch testified on Tuesday. Agents also seized $20,000 in cash, he added.
Boyzadzhyan’s bail was denied despite promises from his attorney, Larry Bakman, to turn over his client’s passport. Boyzadzhyan has been residing the U.S. for 19 years, his attorney added.
Kazarian’s attorney, Mark Geragos, did not contest detainment, but Olguin granted a request that a physician visit be allowed for gastrointestinal troubles and sharp headaches.
An ambulance had rushed to the federal detention facility to treat Kazarian for his ailments, Geragos said in court.
Kazarian is charged with racketeering and conspiracy to commit health-care fraud. The racketeering charge alone carries a maximum sentence of life in prison, according to an indictment.
Kazarian is suspected of being connected to the Armenian American crime enterprise known as the Mirzoyan-Terdjanian Organization, whose members were suspected of carrying out the scheme.
Olguin granted bail for Burbank resident Artur Yepiskoposyan, 31, whose friends and families offered to put up their homes and jewelry for his release.
Diana Kazarian, the president of the Golden Heart Home Healthcare in Montrose, offered to put up her home as collateral for bail.
"You can be paying this back for the rest of your life," Olguin told her.
Yepiskoposyan’s attorney, Alex Kessel, said his client was not a flight risk because he had strong ties to the community, including being married to a U.S. citizen and having a 15-month-old child.
Still, Burns argued that Yepiskoposyan was one of the top players in the Medicare fraud scheme.
Olguin put restrictions his release, which would only be granted if $1.6 million was paid in full for the bail. Any properties offered as part of that had to be deeded, he added.
Yepiskoposyan will also be required to wear an electronic monitoring device while under house arrest.
Burns also argued against the release of Baghoumian, who she said would also pose a threat to the community. He was convicted of battery in 1998, Burns added.
Koch testified that Baghoumian had accumulated a gambling debt of $2 million at the Wynn hotel in Las Vegas.
NEWS.am reminds readers that a vast network of Armenian gangsters and their associates used phantom health care clinics and other means to try to cheat Medicare out of $163 million.
The operation was under the protection of an alleged Armenian crime boss, Armen Kazarian, nicknamed Pzo, who was among the first arrestees in Los Algeles. Most of the defendants "were Armenian nationals or immigrants and many maintained substantial ties to Armenia" and criminals there.
About 40 of the 73 arrestees are Armenians, including the leaders David Mirzoyan, Robert Tjanyan and others.
Attorney for the Southern District of New York, Preet Bharara, declared that the Mirzoyan-Terdjanian organization a syndicate in New York and Los Angeles run by Armenians used threats, intimidation and violence operating in a classical mafia style.