Category Archives: EDNY

Independent Contractor in Afghanistan Pleads Guilty for His Role in Offering $54,000 in Bribes to a U.S. Government Official

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Earlier today at the federal courthouse in Brooklyn, N.Y., Akbar Ahmad Sherzai, 49, of Centreville, Va., an independent contractor for a trucking company operating in Afghanistan that was responsible for delivering fuel to U.S. Army installations, pleaded guilty to his role in offering a U.S. Army serviceman $54,000 in bribes to falsify documents to reflect the successful delivery of fuel shipments that Army records indicate were never delivered.  Sherzai faces a maximum of 15 years imprisonment and a $250,000 fine.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and United States Attorney for the Eastern District of New York Loretta E. Lynch made the announcement.
“The defendant sought to use deception, corruption and greed to enrich his company at the risk of jeopardizing the U.S. Army’s supply lines in Afghanistan,” said U.S. Attorney Lynch.  “Attempts to corrupt American officials will not be tolerated, either at home or abroad.”  U.S. Attorney Lynch extended her grateful appreciation to the Special Inspector General for the Afghanistan Reconstruction, Homeland Security Investigations and the FBI for their assistance in this case.
The U.S. Army regularly contracts with local Afghan trucking companies to transport U.S. military equipment, fuel, and other supplies throughout Afghanistan.  To ensure the companies fulfilled these requests, the U.S. Army used transportation movement requests (TMRs), which, when properly completed, verified that the shipments were successfully completed before approving payments to the trucking companies.
In April 2013, Sherzai approached a U.S. military serviceman to discuss fuel delivery missions that had been classified by the U.S. Army as “no-shows,” meaning that the fuel had not been delivered.  Sherzai offered the serviceman a bribe to falsify the TMRs to reflect successful deliveries so that Sherzai’s company would receive payment and avoid penalties for failed fuel deliveries.  The serviceman, under the supervision of law enforcement, continued to meet with Sherzai to discuss payments for the falsification of records.  On two separate occasions, Sherzai paid the serviceman bribes in cash on American military bases in Afghanistan.  On another occasion, Sherzai arranged for the serviceman’s bribe to be transferred to the United States through a hawala, an informal money transfer system.  In total, Sherzai paid the serviceman $54,000 in cash to falsify fourteen TMRs.  Each “no show” delivery mission, absent the fraudulent TMRs, would have resulted in a fine of the company by the U.S. government of $75,000.
Sherzai was arrested on a criminal complaint on Sept. 24, 2013.  The guilty plea proceeding was held before U.S. Magistrate Judge Robert M. Levy.
The government’s case is being prosecuted by Assistant U. S. Attorney Amir H. Toossi and Trial Attorney Daniel Butler of the Criminal Division’s Fraud Section.

 

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Patient Recruiter Pleads Guilty in Connection With $13 Million Health Care Fraud Scheme

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Pavel Zborovskiy, 57, of Brooklyn, N.Y., pleaded guilty today to conspiracy to pay and receive illegal health care kickbacks in connection with a $13 million health care fraud and money laundering scheme.
Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Director in Charge George Venizelos of the FBI’s New York Field Office, and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG) made the announcement.
Zborovskiy pleaded guilty before U.S. District Judge Nina Gershon of the Eastern District of New York and is the sixth defendant to plead guilty in connection with the scheme.   At sentencing on May 28, 2014, Zborovskiy faces a maximum penalty of five years in prison and a fine of more than $2.5 million.
According to court documents, from 2010 to 2012, Zborovskiy, working through an ambulette company, recruited patients to attend a Brooklyn clinic called Cropsey Medical Care PLLC.   An ambulette is a vehicle that is licensed by New York State’s Medicaid program to transport beneficiaries to and from medical facilities when such transportation is medically necessary.   Zborovskiy’s ambulette company transported the patients he had recruited to and from Cropsey Medical, and billed Medicaid for such transportation.   Once Zborovskiy’s beneficiaries were transported to Cropsey Medical, Zborovskiy and others paid such beneficiaries cash kickbacks to induce them to continue to attend the clinic and to receive medically unnecessary physical therapy, diagnostic testing and other services.   Such purported medical services were then billed by Cropsey Medical to Medicare and Medicaid.
According to court documents, from approximately November 2009 to October 2012, Cropsey Medical submitted more than $13 million in claims to Medicare and Medicaid, seeking reimbursement for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy and diagnostic tests.
The case was investigated by the FBI and HHS-OIG and brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and U.S. Attorney’s Office for the Eastern District of New York.   The case is being prosecuted by Trial Attorney Sarah M. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Shannon Jones of the Eastern District of New York.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,700 defendants who have collectively billed the Medicare program for more than $5.5 billion.   In addition, HHS’s Centers for Medicare and Medicaid Services, working in conjunction with HHS-OIG, are taking steps to increase accountability and decrease the presence of fraudulent providers.

Brooklyn Clinic Owner Sentenced for Role in $77 Million Medicare Fraud Scheme

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The owner of a Brooklyn medical clinic was sentenced today to serve 15 years in prison for her leading role in a $77 million Medicare fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney for the Eastern District of New York Loretta E. Lynch, Assistant Director in Charge George Venizelos of the FBI’s New York Field Office, and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.

Irina Shelikhova, 50, of Brooklyn, was sentenced by U.S. District Judge Nina Gershon of the Eastern District of New York.  In addition to her prison term, Shelikhova was sentenced to serve three years of supervised release with a concurrent exclusion from Medicare, Medicaid and all Federal health programs, ordered to forfeit $36,241,545 and ordered to pay $50,943,386 in restitution.  Shelikhova has been in custody since her arrest at the John F. Kennedy International Airport on June 15, 2012, after living as a fugitive in Ukraine for nearly two years.  After serving her sentence, Shelikhova faces deportation from the United States.

Shelikhova pleaded guilty on Dec. 18, 2012, to one count of conspiracy to commit money laundering.  Including Shelikhova, 13 individuals have been convicted in this case.

Court documents state that from 2005 to 2010, Shelikhova owned and operated a clinic in Brooklyn that billed Medicare under three corporate names: Bay Medical Care PC, SVS Wellcare Medical PLLC and SZS Medical Care PLLC (collectively, Bay Medical clinic).  Shelikhova and her employees at the Bay Medical clinic paid cash kickbacks to Medicare beneficiaries and used the beneficiaries’ names to bill Medicare for more than $77 million in services that were medically unnecessary or never provided.  The defendants billed Medicare for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy and diagnostic tests.

According to trial testimony, Shelikhova masterminded the health care fraud at the Bay Medical clinic, which included hiring a medically unlicensed co-defendant to impersonate the clinic’s doctor and render medical care to patients.  Shelikhova also directed employees to create phony medical notes in an attempt to back up the false billing and to forge doctors’ names on prescriptions and charts.

The government’s investigation included the use of a court-ordered audio/video recording device hidden in a room at the clinic, which showed conspirators paying cash kickbacks to corrupt Medicare beneficiaries.  The conspirators were recorded paying approximately $500,000 in cash kickbacks during a period of approximately six weeks from April to June 2010.  This room was marked “PRIVATE” and featured a Soviet-era poster of a woman with a finger to her lips and the words “Don’t Gossip” in Russian. The purpose of the kickbacks was to induce the beneficiaries to receive unnecessary medical services or to stay silent when services not provided to the patients were billed to Medicare.

To generate the large amounts of cash needed to pay the patients, Shelikhova directed the recruitment and operations of a network of external money launderers who cashed checks for the clinic.  Shelikhova wrote clinic checks payable to various shell companies controlled by the money launderers.  These checks did not represent payment for any legitimate service at or for the Bay Medical clinic, but rather were written to launder the clinic’s fraudulently obtained health care proceeds.  The money launderers cashed these checks and provided the cash back to the clinic.  Shelikhova used the cash to pay illegal cash kickbacks to the Bay Medical clinic’s purported patients.

The case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York.  This case is being prosecuted by Trial Attorney Sarah M. Hall of the Fraud Section and Assistant U.S. Attorney Shannon Jones of the Eastern District of New York.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.  In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

New York Check Cashing Company and Owner Plead Guilty for Roles in $19 Million Scheme

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Belair Payroll Services Inc. (Belair), a multi-branch check cashing company in Flushing, N.Y., and its owner, Craig Panzera, 47, pleaded guilty today for failing to follow reporting and anti-money laundering requirements for more than $19 million in transactions, in violation of the Bank Secrecy Act (BSA).   Panzera also pleaded guilty to conspiring to defraud the United States by willfully failing to pay income and payroll taxes.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta Lynch of the Eastern District of New York, Acting Director John Sandweg of U.S. Immigration and Customs Enforcement (ICE), and Chief Richard Weber of the Internal Revenue Service Criminal Investigation (IRS-CI) made the announcement.

As part of the guilty plea, Belair will forfeit $3,267,252.10, and Panzera will pay restitution in the amount of $946,841.17 to the IRS.  Sentencing for Belair and Panzera will be determined at a later date.

According to court records, from in or about June 2009 through June 2011, certain individuals presented to Belair’s manager and other employees checks to be cashed at Belair.  The checks were written on accounts of shell corporations that appeared to be health care related, but in fact, the corporations did no legitimate business.  The shell corporations and their corresponding bank accounts on which the checks were written were established in the names of foreign nationals, many of whom were no longer in the United States.

Belair accepted these checks and provided cash in excess of $10,000 to the individuals. Panzera and others at Belair never obtained any identification documents or information from those individuals.  Belair filed currency transaction reports (CTRs) that falsely stated the checks were cashed by the foreign nationals who set up the shell corporations, and in certain CTRs, Belair failed to indicate the full amount of cash provided to the individuals.  The individuals cashed more than $19 million through Belair during the course of the scheme.  Panzera and Belair willfully failed to maintain an effective anti-money laundering program by cashing these checks.

The charges in the indictment against Panzera’s and Belair’s co-defendants remain pending and are merely accusations.  Those defendants are presumed innocent unless and until proven guilty.

The cases are being investigated by agents from ICE Homeland Security Investigations and IRS-CI.  These cases are being prosecuted by Trial Attorneys Claiborne W. Porter and Kevin G. Mosley of the Criminal Division’s Asset Forfeiture and Money Laundering Section’s (AFMLS) Money Laundering and Bank Integrity Unit, Trial Attorney Darrin McCullough of AFMLS’s Forfeiture Unit, and Assistant U.S. Attorney Patricia Notopoulos of the Eastern District of New York.

The Money Laundering and Bank Integrity Unit investigates and prosecutes complex, multi-district and international criminal cases involving financial institutions and individuals who violate the money laundering statutes, the Bank Secrecy Act and other related statutes.  The Unit’s prosecutions generally focus on three types of violators: financial institutions, including their officers, managers and employees, whose actions threaten the integrity of the individual institution or the wider financial system; professional money launderers and gatekeepers who provide their services to serious criminal organizations; and individuals and entities engaged in using the latest and most sophisticated money laundering techniques and tools.

Former Veterans Affairs Psychiatrist Pleads Guilty to Medicare Fraud

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Dr. Mikhail L. Presman, a licensed psychiatrist employed by the Department of Veterans Affairs (VA), pleaded guilty today to health care fraud for falsely billing Medicare for home medical treatment to Medicare beneficiaries and agreed to forfeit more than $1.2 million in illegal profits.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta Lynch of the Eastern District of New York, and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.

According to court documents, from Jan. 1, 2006, through May 10, 2013, Presman submitted approximately $4 million in Medicare claims for home treatment of Medicare beneficiaries notwithstanding his full-time, salaried position as a psychiatrist at the VA hospital in Brooklyn.  Contrary to his representations, Presman did not provide any treatment to a substantial number of the beneficiaries he claimed to have treated.  For example, Presman submitted claims to Medicare for home medical visits at locations within New York City even though he was physically located in China at the time of these purported home visits.  Additionally, Presman submitted claims to Medicare for 55 home medical visits to beneficiaries who were hospitalized on the date of the purported visits.

Presman is scheduled to be sentenced by U.S. District Judge I. Leo Glasser of the Eastern District of New York on Feb. 13, 2014, and faces a maximum sentence of 10 years in prison.

The case was investigated by the HHS-OIG, with assistance from the Department of Veterans Affairs Office of Inspector General, and brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York.  The case is being prosecuted by Trial Attorney Bryan D. Fields of the Fraud Section and Assistant U.S. Attorney Patricia E. Notopoulos of the Eastern District of New York.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.  In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

Indictment Unsealed and “Wanted” Posters Issued for Fugitives Charged with Multimillion Dollar International Cyber Fraud Scheme

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Earlier today, charges were unsealed against Romanian fugitive Nicolae Popescu, the leader of an international organized crime syndicate that ran a multimillion dollar cyber fraud scheme, and six other fugitives charged with participating in the same scheme.  Interpol has issued red notices to foreign law enforcement partners seeking assistance in the apprehension of these fugitives, and the FBI has also released “Wanted” posters to facilitate their arrests.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, and Assistant Director in Charge George Venizelos of the FBI’s New York Office made the announcement.

“Today, we have unsealed charges – and issued “wanted” posters and Interpol red notices – for a band of dangerous cybercriminals who are alleged to have stolen millions of dollars from unsuspecting consumers around the globe,” said Acting Assistant Attorney General Raman.  “As described in the indictment, the leader of this band of thieves openly proclaimed that he is beyond the reach of the U.S. criminal justice system.  But with the help of our international partners, we will track down and capture every alleged member of this criminal syndicate, no matter where they are hiding.”

“Using forged documents and phony websites, for years Popescu and his criminal syndicate reached across the ocean to pick the pockets of hard working Americans looking to purchase cars,” said United States Attorney Lynch.  “They thought their distance would insulate them from law enforcement scrutiny.  They were wrong.  By now, Popescu and his band of fugitives have seen their co-conspirators brought here to account for their crimes.  Today’s actions place them squarely in the sights of our partners in international law enforcement. We will not stop in our efforts to find these fugitives and bring them to justice for the crimes they have allegedly committed against our citizens. ”

“As alleged, the defendants infiltrated the cyber marketplace with advertisements for high-value items that didn’t exist,” said FBI Assistant Director in Charge Venizelos.  “They siphoned funds from victims to fuel their greedy desires and created false identities, fake websites and counterfeit certificates of title in order to make the scheme more convincing.  Popescu and his co-conspirators were masters of illusion, but they can’t escape their ultimate reality.  With the help of our law enforcement partners at home and abroad, we will bring them to justice.”

Popescu, Romanian nationals Daniel Alexe, Dmitru Daniel Bosogioiu, Ovidiu Cristea, and Dragomir Razvan, and a defendant who goes by the names “George Skyper” and “Tudor Barbu Lautaru,” as well as Albanian national Fabjan Meme, were originally charged in a criminal complaint with six other defendants for their participation in a cyber-fraud conspiracy that targeted primarily American consumers on such U.S.-based websites as Cars.com and AutoTrader.com.  Their six co-defendants were arrested in a coordinated international takedown on Dec. 5, 2012, but Popescu, Alexe, Bosogioiu, Cristea, Razvan, and Meme have remained at large.

As alleged in the complaint and subsequent indictment, the defendants participated in a long-term conspiracy to saturate Internet marketplace websites including eBay, Cars.com, AutoTrader.com, and CycleTrader.com with detailed advertisements for cars, motorcycles, boats, and other high-value items – generally priced in the $10,000 to $45,000 range – that did not actually exist.  The defendants employed co-conspirators who corresponded with the victim buyers by email, sending fraudulent certificates of title and other information designed to lure the victims into parting with their money.  The defendants allegedly even pretended to sell cars from nonexistent auto dealerships in the United States and created phony websites for these fictitious dealerships.  As part of the scheme, the defendants produced and used high-quality fake passports to be used as identification by co-conspirators in the United States to open U.S. bank accounts.  After the “sellers” reached an agreement with the victim buyers, they would often email them invoices purporting to be from Amazon Payments, PayPal, or other online payment services, with instructions to transfer the money to the U.S. bank accounts used by the defendants.  The defendants and their co-conspirators allegedly used counterfeit service marks in designing the invoices so that they would appear identical to communications from legitimate payment services.  The illicit proceeds were then withdrawn from the U.S. bank accounts and sent to the defendants in Europe by wire transfer and other methods.                The complaint and indictment describe the extent to which Popescu, in particular, led the conspiracy.  Among other things, Popescu coordinated the roles of the various participants in the scheme – he hired and fired passport makers based on the quality of the fake passports they produced, supervised co-conspirators who were responsible for placing the fraudulent ads and corresponding with the victims, and ensured that the illicit proceeds transferred to the U.S. bank accounts were quickly collected and transferred to himself and others acting on his behalf in Europe.  Popescu also allegedly directed Cristea to obtain and transfer luxury watches purchased using the illegal proceeds of the scheme, including three Audemars Piguet watches with a combined retail value of over $140,000, to his associates in Europe.  It is estimated that the defendants earned over $3 million from the fraudulent scheme.

According to the charging documents, Popescu and his close associate Bosogioiu demonstrated that they were aware of the risks of prosecution in the United States.  In a recorded conversation on Oct. 23, 2011, Bosogioiu asked about the difference between federal and state law in the United States and vowed to avoid the FBI.  Popescu, meanwhile, predicted on July 28, 2011, that “criminals will not be extradited from Romania to U.S.A….[I]t will never happen.”

The charges in the complaint and the indictment are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

The government’s case is being prosecuted by Senior Litigation Counsel Carol Sipperly of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys Cristina Posa, Nadia Shihata, and Claire Kedeshian of the U.S. Attorney’s Office for the Eastern District of New York.

The offices of the FBI Legal Attachés in Romania, the Czech Republic, the United Kingdom, Canada and Hungary were instrumental in coordinating efforts with the United States’ international partners, and the U.S. government thanks its partners in Romania, the Czech Republic, Hungary, the United Kingdom, Canada and Germany for their close cooperation throughout this investigation.  The Criminal Division’s Computer Crime and Intellectual Property Section, Office of International Affairs, and Asset Forfeiture and Money Laundering Section provided assistance with this investigation, as did the International Organized Crime Intelligence and Operations Center; the Internet Crime Complaint Center; the Costa Mesa, Calif., Police Department; the Orange County, Calif., District Attorney’s Office; and the New York City Police Department

“No Show” Doctor Sentenced to 151 Months in Prison in Connection with $77 Million Medicare Fraud Scheme

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Gustave Drivas, M.D., 58, of Staten Island, N.Y., was sentenced to serve 151 months in prison for his role as a “no show” doctor in a $77 million Medicare fraud scheme.  The State of New York revoked Dr. Drivas’s medical license earlier this year.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division, U.S. Attorney Loretta E. Lynch of the Eastern District of New York, Assistant Director in Charge George Venizelos of the FBI’s New York Field Office and Special Agent in Charge Thomas O’Donnell of the U.S. Department of Health and Human Services Office of Inspector General (HHS-OIG) made the announcement.

Drivas was convicted by a jury on April 8, 2013, of health care fraud conspiracy and health care fraud after a seven-week trial.  He was acquitted of kickback conspiracy.  Including Drivas, 13 individuals have been convicted of participating in the massive fraud scheme, either through guilty pleas or trial convictions.  In addition to the prison term, U.S. District Judge Nina Gershon of the Eastern District of New York sentenced Drivas to three years of supervised release with a concurrent exclusion from Medicare, Medicaid and all Federal health programs, ordered him to forfeit $511,000 and ordered him to pay restitution in the amount of $50.9 million.

The evidence at trial showed that Drivas knowingly authorized his co-conspirators at a Brooklyn medical clinic to use his Medicare billing number to charge Medicare for more than $20 million in medical procedures and services that were never performed.  In return, he received more than $500,000 for his role in the scheme.  According to court documents, from 2005 to 2010, Drivas was the medical director of or a rendering physician at a clinic in Brooklyn that billed Medicare under three corporate names: Bay Medical Care PC, SVS Wellcare Medical PLLC and SZS Medical Care PLLC (collectively “Bay Medical clinic”).  The evidence established that Drivas was a “no show” doctor, who almost never visited the clinic except to pick up his check.  The evidence also showed that the clinic paid cash kickbacks to Medicare beneficiaries and used the beneficiaries’ names to bill Medicare for more than $77 million in services that were medically unnecessary and never provided.

The government’s investigation included the use of a court-ordered audio/video recording device hidden in a room at the clinic in which the conspirators paid cash kickbacks to corrupt Medicare beneficiaries.  The conspirators were recorded paying approximately $500,000 in cash kickbacks during a period of approximately six weeks from April to June 2010.  This room was marked “PRIVATE” and featured a Soviet-era poster of a woman with a finger to her lips and the words “Don’t Gossip” in Russian.  The purpose of the kickbacks was to induce the beneficiaries to receive unnecessary medical services or to stay silent when services not provided to the patients were billed to Medicare.

To generate the large amounts of cash needed to pay the patients, Drivas’s business partners and co-conspirators recruited a network of external money launderers who cashed checks for the clinic.  Clinic owners wrote clinic checks payable to various shell companies controlled by the money launderers.  These checks did not represent payment for any legitimate service at or for the Bay Medical clinic, but rather were written to launder the clinic’s fraudulently obtained health care proceeds.  The money launderers cashed these checks and provided the cash back to the clinic.  Clinic employees used the cash to pay illegal cash kickbacks to the Bay Medical clinic’s purported patients.

This case was investigated by the FBI and HHS-OIG and was brought as part of the Medicare Fraud Strike Force, under the supervision of the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York.  The case is being prosecuted by Trial Attorney Sarah M. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorneys William C. Campos and Shannon C. Jones of the Eastern District of New York.

The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.  Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.  In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

Owner of New York Construction Company Indicted for Tax Fraud

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The Justice Department and Internal Revenue Service (IRS) announced that Tomas Olazabal, of Fresh Meadows, N.Y., was arrested today following his indictment in the U.S. District Court for the Eastern District of New York on Aug. 8, 2013, on multiple tax crimes.

According to the indictment, Olazabal owned Tupac Construction Corp., a construction company in Fresh Meadows.  As alleged in the indictment, Olazabal used check cashing services to cash a substantial number of checks paid to his construction company for services between 2007 and 2008.  He concealed his check cashing activities from his tax return preparers.  Accordingly, the gross receipts represented by the checks negotiated at the check cashers were not included as gross receipts on the company’s tax returns.

The indictment alleges that Olazabal filed false 2007 and 2008 corporate income tax returns for Tupac. Olazabal faces a potential maximum sentence of six years in prison and a potential fine of up to $500,000.

A trial date has not been scheduled.  An indictment merely alleges that a crime has been committed, and a defendant is presumed innocent until proven guilty beyond a reasonable doubt.

The case was investigated by IRS – Criminal Investigation and is being prosecuted by Trial Attorneys Mark Kotila and Steve Descano of the Justice Department’s Tax Division.

Philadelphia Money Launderer Pleads Guilty in Connection with Brooklyn Medicare Fraud Scheme

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A Philadelphia resident pleaded guilty today for his role as a money launderer in a $13 million health care fraud scheme.

Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; U.S. Attorney Loretta E. Lynch of the Eastern District of New York; George Venizelos, Assistant Director-in-Charge, FBI’s New York Field Office; and Special Agent-in-Charge Thomas O’Donnell of the U.S. Department of Health and Human Services’ Office of Inspector General (HHS-OIG) made the announcement.

Leonid Zalkind, 36, of Philadelphia, pleaded guilty to one count of conspiracy to commit money laundering before U.S. District Judge Nina Gershon of the Eastern District of New York.   At sentencing, scheduled for Dec. 2, 2013, Zalkind faces a maximum penalty of 20 years in prison and a $500,000 fine.

According to court documents, from 2010 to 2012, Zalkind operated numerous shell companies and bank accounts through which he laundered the proceeds of health care fraud from Brooklyn clinic Cropsey Medical Care PLLC.  Zalkind conspired with others to accept checks from Cropsey Medical, which were made payable to various shell companies Zalkind controlled.   These checks did not represent payment for any legitimate service at, or by, Cropsey Medical, but rather were written to launder Cropsey Medical’s fraudulently obtained health care proceeds.   Zalkind admitted at the plea proceeding that he deposited such checks into bank accounts he controlled, intending these transactions to hide and disguise the fact that these funds were proceeds of a crime.  He admitted that he knew these funds were proceeds of illegal activity.

The proceeds of checks Zalkind negotiated and cashed were given to the owners and operators of Cropsey Medical and were used to pay illegal cash kickbacks to Cropsey Medical’s purported patients.  According to court documents, from approximately November 2009 to October 2012, Cropsey Medical submitted more than $13 million in claims to Medicare and Medicaid, seeking reimbursement for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy and diagnostic tests.

Eight individuals await trial, including a doctor, owners and employees of Cropsey Medical clinics and other individuals who paid and received kickbacks to induce the referral and transportation of patients to the clinic, as well as individuals who laundered funds for Cropsey Medical.  Trial has not yet been scheduled.

The case was investigated by the FBI and HHS-OIG, brought as part of the Medicare Fraud Strike Force, and supervised by the Criminal Division’s Fraud Section and U.S. Attorney’s Office for the Eastern District of New York.  The case is being prosecuted by Trial Attorney Sarah M. Hall and Assistant U.S. Attorneys Shannon Jones and Ilene Jaroslaw of the Eastern District of New York.

Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion.  In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.

Axius CEO Roland Kaufmann Sentenced for Conspiracy to Pay Bribes in Stock Sales

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Roland Kaufmann, CEO of Axius Inc., was sentenced today to serve 16 months in prison for his role in a conspiracy to bribe purported stock brokers and manipulate the stock of a company he controlled, announced Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division and U.S. Attorney for the Eastern District of New York Loretta Lynch.

Kaufmann, 60, a Swiss citizen, was sentenced today by U.S. District Judge John Gleeson in the Eastern District of New York.  In addition to his prison term, Kaufmann was sentenced to serve three years of supervised release and ordered to pay a fine of $450,000.

Kaufmann pleaded guilty in January 2013 to one count of conspiracy to violate the Travel Act in connection with a scheme to bribe stock brokers to purchase the common stock of a company he controlled and to manipulate its stock price.  As part of his plea agreement, Kaufmann forfeited $298,740 gained through this crime.

According to court documents, Kaufmann controlled Axius, Inc., a purported holding company and business incubator located in Dubai.  As part of the scheme, the defendant and his co-conspirator, Jean Pierre Neuhaus, enlisted the assistance of an individual who they believed had access to a group of corrupt stock brokers, but who was, in fact, an undercover law enforcement agent.  Court documents reveal that they instructed the undercover agent to direct brokers to purchase Axius shares in return for a secret kickback of approximately 26 to 28 percent of the share price.  Kaufman and Neuhaus also instructed the undercover agent as to the price the brokers should pay for the stock and that the brokers were to refrain from selling the Axius shares they purchased on behalf of their clients for a one-year period.  By preventing sales of Axius stock, Kaufmann and Neuhaus intended to maintain the fraudulently inflated share price for Axius stock.

Jean Pierre Neuhaus has pleaded guilty and been sentenced for his role in the scheme.

The case is being prosecuted by Trial Attorney Justin Goodyear of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Ilene Jaroslaw, with assistance from Fraud Section Trial Attorney Nathan Dimock.  The case was investigated by the FBI New York Field Office and the Internal Revenue Service New York Field Office.  The Department also recognizes the substantial assistance of the U.S. Securities and Exchange Commission.

This prosecution was the result of efforts by President Obama’s Financial Fraud Enforcement Task Force (FFETF) which was created in November 2009 to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. With more than 20 federal agencies, 94 U.S. attorneys’ offices and state and local partners, it’s the broadest coalition of law enforcement, investigatory and regulatory agencies ever assembled to combat fraud. Since its formation, the task force has made great strides in facilitating increased investigation and prosecution of financial crimes; enhancing coordination and cooperation among federal, state and local authorities; addressing discrimination in the lending and financial markets and conducting outreach to the public, victims, financial institutions and other organizations. Over the past three fiscal years, the Justice Department has filed more than 10,000 financial fraud cases against nearly 15,000 defendants including more than 2,700 mortgage fraud defendants.