Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced that ASHRAF HASAN-HAFEZ and ILYA KOGAN were sentenced yesterday to 45 and 50 months, respectively, in prison for their participation in a scheme to defraud the Medicare and Medicaid programs. HASAN-HAFEZ, the owner of a physical therapy practice in Brooklyn, and KOGAN, the owner of an acupuncture company in Brooklyn, received approximately $1.3 million from Medicare and the New York State Medicaid Program after falsely submitting bills for services that were not provided as billed, or which were rendered by unlicensed and unsupervised individuals. In a separate scheme, KOGAN also obtained nearly $300,000 from no-fault insurance companies based on billing by fraudulently incorporated acupuncture companies. HASAN-HAFEZ and KOGAN were sentenced yesterday by United States District Judge Robert W. Sweet.
According to the Indictment filed in Manhattan federal court, as well as previous court filings and statements made in public court proceedings:
Between at least January 2010 and August 2013, HASAN-HAFEZ was the owner of a physical therapy practice which operated out of a basement on East 18th Street in Brooklyn, New York. HASAN-HAFEZ employed individuals who provided physical therapy services to patients, and was involved in the clinic’s management and billing. KOGAN was the owner of an acupuncture company which operated its practice out of the same location on East 18th Street.
HASAN-HAFEZ and KOGAN committed fraud against Medicare and Medicaid by pressuring employees to add services to the bills that were submitted to these entities so that Medicare and Medicaid were billed for physical therapy services that were never in fact provided; billed for reimbursable physical therapy services even though only unreimbursable acupuncture had been provided; and billed for physical therapy services provided by unlicensed practitioners. When the employees resisted KOGAN’s directions to create such fraudulent billing, HASAN-HAFEZ directed the employees to follow KOGAN’s instructions. HASAN-HAFEZ had leverage over these employees because he sponsored their employment in the United States and they were therefore dependent on him for continued employment—and legal status—in the United States.
In total, Medicare and Medicaid suffered actual losses of $1,297,000 as a result of this fraudulent scheme.
In addition, KOGAN participated in a separate scheme to defraud no-fault insurance companies. No-fault insurance provides benefits to individuals injured in motor vehicle accidents under certain conditions. Between approximately March 2014 and June 2016, KOGAN controlled two acupuncture businesses that had been set up, at his request, under the name of another acupuncturist (“Individual-1”). KOGAN coached Individual-1 how to lie under oath about KOGAN’s involvement in the businesses when Individual-1 was questioned by representatives of a no-fault insurer. KOGAN had previously entered into settlement agreements with two of the largest no-fault insurance providers to resolve certain claims against him. Pursuant to one of the settlement agreements, KOGAN agreed not to submit any future billing—under his name, or under the name of any entity in which he had direct or indirect ownership or control—without giving advance notice to the insurer.
A total of $293,851 was paid to two no-fault insurers for services performed by Individual-1’s companies. Had the insurers known the truth—that the acupuncture clinics were in fact controlled by KOGAN despite being registered in Individual-1’s name—they would not have paid the claims due to the fraudulent incorporation of the companies.
ASHRAF HASAN-HAFEZ, 47, of Brooklyn, New York, pled guilty to health care fraud and conspiracy to commit health care fraud on March 16, 2018. ILYA KOGAN, 44, of Watchung, New Jersey, pled guilty to health care fraud and conspiracy to commit health care fraud on March 16, 2018, and pled guilty to conspiracy to commit mail fraud on June 25, 2018. In addition to the prison terms, Judge Sweet ordered HASAN-HAFEZ and KOGAN to forfeit $1,297,000 and pay restitution of $1,297,000 to Medicare and Medicaid. KOGAN was also ordered to forfeit $293,851 and pay restitution of $293,851 to victims of the no-fault insurance fraud scheme.
Mr. Berman praised the outstanding investigative efforts of FBI and HHS-OIG.
