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Bail denied in largest ever Medicare fraud scheme

Citing flight risk, judge orders three suspects to stay in jail. They are accused of stealing identities and making false claims.

October 21, 2010|By Veronica Rocha,
(File photo )

LOS ANGELES — 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.

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.

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