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73 people charged in $163 million Medicare scam
By Insure.com staff

Dozens of people, including alleged members of an American-Armenian organized crime network, were arrested Oct. 13 for hatching what authorities called the largest health insurance fraud scheme in history.

Seventy-three people were charged in five states with health care fraud-related crimes. Federal officials said the highly organized network tried to bill Medicare for $163 million in phony claims.

"In terms of profitability, geographic scope, and sheer ambition, the elaborate health care scam we charge today highlights the emerging and serious threat of international organized crime," Manhattan U.S. Attorney Preet Bharara said in a press statement. "With 118 phantom clinics and over $100 million in bogus billings, this group of international gangsters allegedly ran a veritable fraud franchise."

Prosecutors said this health insurance scam involved at least 118 medical clinics in 25 states that submitted phony claims to Medicare. Arrests were made in New York, Georgia, Los Angeles, Ohio and New Mexico.

FBI Assistant Director-in-Charge Janice Fedarcyk said in a press statement that legit medical clinics and real patients were not involved. The fraudsters stole doctors' and patients' identities to carry out the fraud. "The whole doctor-patient interaction was a mirage."

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