Saturday, June 15, 2024

Money Launderer Sentenced To 30 Months In Prison For Laundering Millions Of Dollars Of Health Care Fraud Proceeds

 

Damian Williams, the United States Attorney for the Southern District of New York, announced that MUKHIDDIN KADIROV was sentenced to 30 months in prison for his involvement in a conspiracy to launder millions of dollars from a health care fraud scheme that primarily targeted the Medicare and Medicaid programs.  KADIROV controlled three shell company bank accounts, opened in the name of another person, that he used to launder over $6 million in health care fraud proceeds, including over $4 million for his co-defendant NERIK ILYAYEV.  KADIROV previously pled guilty to one count of conspiracy to commit concealment money laundering before U.S. District Judge Gregory H. Woods, who imposed this sentence.   

U.S. Attorney Damian Williams said: “Mukhiddin Kadirov participated in a complex international money laundering network to launder millions of dollars fraudulently obtained from Medicare and Medicaid, as well as from other insurers.  Kadirov abused our financial system by providing false information to banks to use shell company bank accounts to launder millions in fraud proceeds.  This prosecution and this sentence are part of my Office’s ongoing work to take down complex money laundering networks and safeguard the integrity of our financial systems.” 

According to the Complaint, the Information, court filings, and public court proceedings:

From approximately March 2021 through the spring of 2022, KADIROV participated in a sophisticated money laundering network that primarily launders health care fraud proceeds (the “Money Laundering Network”).  Members of the Money Laundering Network typically deposit checks from health care companies that represent health care fraud proceeds into New York-based bank accounts held by shell companies.  The conspirators controlling the shell companies collect cash typically from U.S.-based individuals who want to remit funds, often to Uzbekistan, through unlicensed channels.  The conspirators controlling the shell companies then provide that cash, minus a fee, to the conspirators providing the health care checks.  The conspirators controlling the shell companies next typically wire the check deposit proceeds from the shell companies to foreign companies to purchase goods from those foreign companies.  The foreign companies ship the goods to importers in Uzbekistan.  The importers pay the Uzbekistan-based partners of the conspirators operating the shell companies in U.S. currency for the goods.  Those Uzbekistan-based partners would then give the U.S. currency to the families and friends of the individuals who had provided the cash to the conspirators controlling the shell companies in New York.

As part of his participation in the Money Laundering Network, KADIROV controlled three business bank accounts held in the names of three different shell companies that were purportedly wholesale companies (the “Shell Company Accounts”).  KADIROV used the Shell Company Accounts to launder approximately $4.2 million from a pharmacy in Manhattan (“Pharmacy-1”) controlled by ILYAYEV that was engaged in a scheme to defraud Medicare and Medicaid by submitting fraudulent billing for expensive HIV medications.  Between March 2021 and April 2022, approximately $6.9 million flowed through KADIROV’s Shell Company Accounts, which included not only the fraud proceeds from Pharmacy-1 but also deposits from other pharmacies and health care companies.

KADIROV took significant steps to conceal his role in the money laundering scheme. KADIROV used the identity of another person who was no longer in the United States to control the Shell Company Accounts.  When using ATM machines to access the Shell Company Accounts, KADIROV covered his face to obscure his face on bank surveillance video and wore latex gloves to prevent leaving fingerprints.  KADIROV also used a burner phone subscribed using a fake name and email address to access the Shell Company Accounts and to call the banks regarding the Shell Company Accounts.

KADIROV conducted his money laundering scheme consistent with the typical practices of the Money Laundering Network, using the Shell Company Accounts to engage in check cashing and unlicensed money transmitting.  The three Shell Companies KADIROV used to conduct the money laundering all had either “Wholesale” or “Supply” in their names to give the false impression to banks and law enforcement that the Shell Companies were medical supply companies to disguise the true nature of the transactions between Pharmacy-1 and the Shell Companies.  KADIROV’s Shell Company Accounts were funded virtually entirely by check deposits from Pharmacy-1 and other pharmacies.  Moreover, consistent with the practices of the Money Laundering Network, KADIROV wired virtually all the funds that flowed through the Shell Company Accounts abroad to companies in China, Ukraine, and Russia.

KADIROV stopped operating the Shell Company Accounts by the spring of 2022, soon after Pharmacy-1 closed in March 2022 after another member of the Money Laundering Network who attempted to launder fraud proceeds from Pharmacy-1 was arrested.  KADIROV nevertheless continued to facilitate ILYAYEV’s money laundering.  After closing Pharmacy-1, ILYAYEV, using the identity of another person, continued to operate another pharmacy, which he used to defraud No Fault insurance providers of over $1.2 million and to unlawfully sell medications obtained from illegitimate sources, for which the pharmacy received over $900,000 in proceeds.  ILYAYEV also used that stolen identity to open multiple corporate bank accounts for the pharmacy to receive and spend the fraud proceeds generated by the pharmacy.  KADIROV, who is also a construction contractor, used a debit card in the name of that stolen identity to buy materials for a construction project for ILYAYEV.  

In addition to the prison term, KADIROV, 46, of Queens, New York, was sentenced to three years of supervised release and ordered to forfeit more than $6 million.

Mr. Williams praised the outstanding investigative work of the Federal Bureau of Investigation and the U.S. Department of Health and Human Services, Office of the Inspector General.  Mr. Williams also thanked the National Insurance Crime Bureau and the Investigations Medicare Drug Integrity Contractor for their assistance in the investigation.

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