Clinic Manager Pleads Guilty In $70 Million Scheme To Defraud Medicare And Medicaid

Fraud Ring, With Three Clinics in Brooklyn and Queens, Paid Kickbacks to Individuals to Undergo Medically Unnecessary Tests

   Preet Bharara, the United States Attorney for the Southern District of New York, announced that EDUARD ZAVALUNOV, a manager of two health care clinics in Queens, New York, pled guilty today before U.S. District Judge Ronnie Abrams to conspiracy to commit wire fraud, mail fraud, and health care fraud, for his role in a massive health care fraud scheme through which three medical clinics in Brooklyn and Queens submitted over $70 million in fraudulent claims to Medicaid and Medicare. 

Manhattan U.S. Attorney Preet Bharara said:  “Eduard Zavalunov has admitted to his role in this $70 million health care fraud  conspiracy.  Zavalunov and his conspirators recruited people from soup kitchens and welfare offices and arranged for them to get medically unnecessary procedures, all so that they could falsely bill Medicaid, Medicare and private insurers.”

According to the Superseding Indictment to which ZAVALUNOV pled guilty, and other publicly filed information in this case:

The Heath Care Fraud Scheme

From 2005 to November 2014, ZAVALUNOV, Victor Lipkin, Vadim Zubkov, Nokoloz Chochiev, Anatoliy Fatkhov, Mariana Swaffar, Jacqueline Pinez, Jonathan Oliver, Jason Brissett, Gilbert Trotman, and Giorgi Buleishvili engaged in a scheme to operate three medical clinics in Brooklyn and Queens, through which they recruited financially disadvantaged and homeless people insured by Medicare and/or Medicaid (the “Phony Patients”) to undergo unnecessary medical tests, typically performed by unlicensed personnel, at the clinics in exchange for cash, and then billed the insurers for administering those unnecessary tests.  Beginning in or about 2005, Lipkin and Zubkov recruited and paid a particular licensed physician (the “Doctor”) to act as the nominal owner and/or physician under whose name three purported medical clinics would bill Medicare, Medicaid, and private insurance providers (the “Insurance Providers”) for unnecessary services and tests – including sleep tests and stress tests – performed at the clinics. The clinics were located on Avenue V in Brooklyn, New York, and on Hillside Avenue and Elmhurst Avenue, respectively, in Queens, New York.  Lipkin and Zubkov were, in fact, the beneficial owners of the clinics, but they concealed their ownership through the Doctor’s nominal affiliation with the clinics, and by laundering the proceeds of the clinics’ operation through shell companies that they owned and controlled.  ZAVALUNOV, Lipkin, Zubkov, and Buleishvili operated and controlled the clinics, and ran the clinics’ day-to-day operations, despite the fact that they were not licensed physicians, as required by New York law.

At the direction of ZAVALUNOV, Lipkin, Zubkov, Buleishvili, and other members of the scheme, including Oliver, Brissett, and Trotman (the “Runners”), as well as Chochiev, recruited financially disadvantaged individuals with Medicaid and/or Medicare insurance to act as Phony Patients and undergo unnecessary medical tests at the clinics in exchange for cash payments.  The Runners often recruited such individuals from soup kitchens and local welfare offices, and coached them on what to say on various medical forms in order to make it falsely appear that the medical tests to which the defendants intended to subject them were medically necessary.  In furtherance of the scheme, Chochiev also made threats of physical violence to individuals who Chochiev believed owed money to the scheme members. 

Also in furtherance of the scheme, before the medically unnecessary tests were performed on the Phony Patients, Swaffar and Pinez obtained the Phony Patients’ Medicaid and/or Medicare insurance information, and then contacted the Insurance Providers to confirm that the Insurance Providers would reimburse for the tests.  Swaffar and Pinez engaged in such conduct knowing that the Phony Patients were being recruited and paid by the Runners to undergo the tests.  Once they determined that a particular Phony Patient’s insurance would pay out claims made by the clinic for the planned medical tests, Swaffar and Pinez notified the Runners that the individuals were eligible and could be brought to the clinic to undergo such tests.

After the Phony Patients had been recruited, confirmed to be Medicare and/or Medicaid eligible, and transported to one of the clinics by the Runners or Chochiev, in many instances certain individuals who were not physicians administered a host of unnecessary medical tests to them.  In particular, for example, Fatakhov administered unnecessary medical tests, including stress tests, to the Phony Patients of the Elmhurst Avenue Clinic.  Fatakhov administered these tests outside the presence and supervision of the Doctor or other licensed physician, despite knowing that the presence or supervision of a licensed physician was required.  After the unnecessary medical tests were administered, the Phony Patients were paid cash kickbacks.  The defendants, through the clinics, then submitted fraudulent claims to Medicaid and Medicare seeking reimbursement for the unnecessary medical tests.  In total, in the course of the scheme, the defendants fraudulently billed over $70 million to Medicaid and Medicare, for which they received over $25 million in reimbursements. 

ZAVALUNOV, 36, pled guilty to one count of conspiracy to commit wire fraud, mail fraud, and health care fraud.

Victor Lipkin, 52, pled guilty on August 3, 2016, to one count of conspiracy to commit wire fraud, mail fraud, and health care fraud.

Vadim Zubkov, 49, pled guilty on January 13, 2017, to one count of conspiracy to commit wire fraud, mail fraud, and health care fraud.

Nikoloz Chochiev, 42, pled guilty on August 11, 2016, to one count of conspiracy to commit wire fraud, mail fraud, and health care fraud.

Anatoliy Fatakhov, 60, pled guilty on July 28, 2016, to one count of conspiracy to commit wire fraud, mail fraud, and health care fraud.

Mariana Swaffar, 52, pled guilty on August 15, 2016, to one count of conspiracy to commit wire fraud, mail fraud, and health care fraud.

Jacqueline Pinez, 33, pled guilty on July 11, 2016, to one count of conspiracy to commit wire fraud, mail fraud, and health care fraud.

Jonathan Oliver, 54, pled guilty on September 6, 2016, to one count of conspiracy to commit wire fraud, mail fraud, and health care fraud.

Giorgi Buleishvili, 42, pled guilty on January 31, 2017, to one count of conspiracy to commit wire fraud, mail fraud, and health care fraud.

Conspiracy to commit wire fraud, mail fraud, and health care fraud carries a maximum sentence of 20 years in prison and a maximum fine of $250,000 or twice the gross gain or loss from the offense.  

The maximum potential sentences in this case are prescribed by Congress and are provided here for informational purposes only, as any sentences for the defendants will be determined by the judge.

Mr. Bharara praised the outstanding investigative work of the Federal Bureau of Investigation and the Department of Health and Human Services. 

DYCD OPENS EARLY APPLICATION PROCESS FOR CITY’S SUMMER YOUTH EMPLOYMENT PROGRAM (SYEP)

City residents ages 14-24 can apply for summer job lottery at www.nyc.gov/dycd through Friday, March 17

Employers interested in supporting NYC’s youth employment programs can apply at the NYC Center for Youth Employment website at www.nyc.gov/cye

    New York City Department of Youth and Community Development (DYCD) Commissioner Bill Chong today announced that applications are open for the 2017 Summer Youth Employment Program (SYEP) from Monday, February 6 through Friday, March 17, 2017. The application process was launched earlier this year to give New Yorkers additional time to plan for summer. Participants are selected by lottery for the program, which runs from July 5 through August 19.

“Every year we give more and more students the chance at an internship that could change the trajectory of their careers. Last year tens of thousands of young New Yorkers kick started their futures ‎at more than 10,000 job sites across the City, further cementing the Summer Youth Employment Program as the biggest and best summer youth workforce initiative in the nation. This year, we’ll connect even more youth from across the five boroughs to meaningful opportunity,” said Mayor Bill de Blasio.

“In the summer of 1973, I worked with the Two Bridges Neighborhood Council cleaning up an empty lot. That summer I earned $320, but more importantly, the job exposed me to the world of public service and taught me work ethic. I look back now as the commissioner of the agency that oversees this program, and realize that SYEP positively affected the career choices I have made. Through SYEP,younger youths learn the importance of showing up on time and working with other people. For older teens and young adults, it’s about lining up the work experience and careers in which they are interested,” said DYCD Commissioner Bill Chong.

SYEP is the nation’s largest summer youth employment initiative, and since 1963 has provided New York City young people between the ages of 14 and 24 with up to six weeks of entry-level experience at worksites in all five boroughs. Last summer, a record 60,113 participants were employed at more than 10,000 worksites. With the support of the Center for Youth Employment, the City more than doubled the number of Ladders for Leaders internships (1,538) and opportunities for young people who are homeless, court-involved or in foster care (3,050).

SYEP participants are compensated for their work at diverse worksites that include government agencies, hospitals, summer camps, nonprofits, small businesses, law firms, museums, sports enterprises and retail. Specialized programming for disabled, foster care, runaway/homeless and court-involved young people are also available. SYEP offers workshops on job readiness, career exploration and financial literacy, and opportunities to continue education and social growth. Ladders for Leaders is an employer-paid internship component of SYEP for youth aged 16-22.

Studies show that SYEP improves school attendance, offers new skills, reduces incarceration rates and keeps teens and young adults safe—including youth who wouldn’t otherwise have access to paying jobs.

As part of a national effort to encourage young people to save and make healthy financial choices,SYEP participants have the option to receive their wages via direct deposit to a bank account of their choice. Youth who signed up for direct deposit and/or opened savings accounts are eligible to receive over 2,000 rewards deposited to their accounts ranging from $25-$500. Last summer, more than 16,000 young people signed up for direct deposit accounts, a 200 percent increase since 2014. The multi-year initiative is funded by the Cities for Financial Empowerment (CFE) and the Citi Foundation.

In 2015, Mayor de Blasio, First Lady Chirlane McCray and the Mayor’s Fund to Advance New York City launched the NYC Center for Youth Employment, a public-private initiative charged with helping to expand the City’s employment services for young New Yorkers, including SYEP. The Center for Youth Employment’s specific goal is to support 100,000 unique work-related experiences each year, including high-quality summer jobs, career exposure, skills-building, and supportive mentorships, by 2020. In collaboration with City agencies, employers and other stakeholders, the Center for Youth Employment is focused on increasing private sector involvement in these programs as well as evaluating the City’s youth workforce system as a whole, with an eye toward expanding effective programs and filling in gaps.

Applications can be completed online or at a participating community-based organization during the application period. Online applications are available at the DYCD website (www.nyc.gov/dycd).Updates will also be posted to DYCD’s Facebook, Twitter and Instagram sites. For more information, call 311 or DYCD Youth Connect (1-800-246-4646).

Employers and worksites looking to support New York City’s youth employment programs, including SYEP, should go to the Center for Youth Employment’s website (www.nyc.gov/cye). Interestedemployers can also email the Mayor’s Fund at fund@cityhall.nyc.gov for details.

African American Abrazo (Embrace) in New York

  State Senator Rev. Rubén Díaz together with Assembly Members Marcos Crespo, Luis Sepúlveda, Michael Blake, Victor Pichardo and Councilmember Rafael Salamanca announce the celebration of the Annual “African-American Abrazo” (Embrace) in New York State. 

The six distinguished African-Americans who will be honored during this special occasion are: Bronx District Attorney Darcel Clark, New York State Assembly Speaker Carl Heastie, Concourse Village Board Member Ms. Chantel Jackson, Union Grove Baptist Church Rev. Frederick Crawford, Community Advocate Minister Kwame Thompson and 86^th AD State Committee Woman Bernice Williams. 

This Annual African American Abrazo (Embrace) will take place on, February 24^th  2017 from 7:00 pm to 12 midnight at Maestro’s Caterers located at 1703 Bronxdale Avenue, in Bronx County. 

Mayor de Blasio and NYPD Commissioner O’Neill will host a press conference to discuss crime statistics

Chief Ben Tucker NYPD, Mayor Bill de Blasio, NYPD Commissioner James O'Neil, and Chief of Crime Strategy Dermot Shea.

  Mayor Bill de Blasio and Police Commissioner James O'Neil brought the brass from One Police Plaza where this type of press conference is normally held to discuss crime statistics to the Justice Sonya Sotomayor Community Center in the 43rd precinct covering the Soundview section of the Bronx. 
   Year-to-date the 4-3 is down more than 22 percent in index crime – 151 versus 194. Grand larcenies dropped by 30 percent and robberies dropped by nearly 50 percent – 30 versus 55.
   Mayor de Blasio said it is a particular pleasure to be here in the 4-3 Precinct. This is a precinct that is doing amazing work. The men and women of this precinct are definitely a winning team and they’re proving all the time how much can be achieved. I want to give a special thanks to Inspector Pichardo who is clearly a rising star in this department for all he has done.

And there is – look, obviously, a bittersweet reality as we’re here. We’re proud of what the men and women of this precinct have achieved but we also know the sense of loss that they feel. And it was only three months ago that we lost Sergeant Tuozzolo, and the whole city grieved. But no one grieved more than his family and no one grieved more than the men and women he served with in the 4-3.

So, we’re going to keep Sergeant Tuozzolo in our hearts, in our prayers. We’re also going to remember his wife, Lisa, his two young children – his young sons, Austin and Joseph. Let’s keep them in our thoughts and prayers always.it is a particular pleasure to be here in the 4-3 Precinct. This is a precinct that is doing amazing work. The men and women of this precinct are definitely a winning team and they’re proving all the time how much can be achieved. I want to give a special thanks to Inspector Pichardo who is clearly a rising star in this department for all he has done.

 And January of 2017 had the lowest number of homicides and the lowest number of shootings in the modern era in New York City. So – a great month of January for any January in our recorded history the mayor added.

  The mayor and police commissioner went over the COM STAT report which gave the lowest crime index for the month of January in 2017 since the statistics have been recorded. 
  Homicides – we recorded 20 homicides in January. That’s down two from 22. That 20, as the Mayor alluded to, is the lowest January that we have ever recorded going back a minimum into the 1960s.

Shooting incidents – down 1.7 percent in January. Last January we hit the modern mark with 59 shooting incidents. We came in with 58 this January.

Talking about momentum again – nine of the last 13 months we’ve had a reduction in shooting incidents. Nine of the last 13.

Three months in a row we’ve had a reduction in shooting incidents in New York City. We have now, when you look at New York City as a whole, we now have 24-hour periods where we do not record a shooting incident in New York City. That kind of thinking was impossible in the not too distant past.

This is the new normal. We want to build on it and we feel that we will build on it but there’s still plenty of work to do.

Stabbings and slashings for January – down 7.2 percent.

Robberies – down 7.5 percent. Lowest January robbery number we’ve seen.

Felony assaults in New York City – down 5.4 percent.

Burglaries tied the lowest mark set last year.

Transit crime – down 1.4 percent.

And housing crime – not to be outdone – down 1.9 percent.

Clearly, a wide breath of crime across New York City – property and violent crime, down.

But there is, I alluded to, there is still work to do – three categories we saw increases in January.

Rape was up 8.9 percent.

Grand larceny, specifically, credit card related skimming and forging of checks – those two drove grand larcenies. And grand larceny was up for the month of January 4.7 percent.

And lastly, rounding out the crime totals – stolen vehicles which we have seen drop to unprecedented lows saw an increase of ten cars for January. So, that’s 480 versus 470 – a two percent increase.

Both congratulated the fine work of the NYPD, and then took questions. 

  Questions included the arrest of a suspect in the high profile Queens rape and killing, costs for security and other questions regarding to Trump Towers and the president, but there were no local issues except for the mayor commenting on the killing of a police sergeant a few months ago in the 43rd precinct. That may have been one of the reasons this press conference was held in the 43rd precinct.

Above - Chief Boyce (far right) is called upon to discuss the rape/slaying three months ago in Queens where a suspect has been arrested, but would not say anything further due to an ongoing investigation. 

Below - Mayor Bill de Blasio in answering a question if crime can go any lower in NYC, gives a definite yes answer.

Council Member Cohen Joins Rally Against Albany's Efforts to Overturn NYC's Plastic Bag Law

Event on City Hall Steps Draws Big Crowd Determined to Protect the Law

 Scores of protesters showed their dedication to protecting the environment by rallying on the steps of New York City Hall on Sunday, February 5, in support of the plastic bag law passed by the New York City Council, set to take effect in less than 2 weeks. Council Member Andrew Cohen, a co-sponsor of the law, joined the coalition of 75 statewide environmental advocates and other state and local elected officials, speaking out to protest legislative efforts by elected officials in Albany to nullify the law.

New York City taxpayers pay millions each year to cart over 9 million discarded plastic bags to dumps, and once there, they do not decompose easily.  Those that do not make it to landfills end up in trees, wash into storm drains, or float away into the sea, where they can choke marine organisms mistaking them for food. In recognition of these significant costs and impacts here in the five boroughs, the Council passed Intro 209, imposing a nickel charge on plastic bags taken at grocery store checkout counters, in order to encourage shoppers to carry reusable shopping bags. More than half of the Council’s members co-sponsored the measure, and it was passed, and later signed by the Mayor, in 2016.

In January, 2017, the New York State Senate moved forward with legislation to nullify the law, and on Friday, February 3, leaders of the New York State Assembly stated their intention to join in opposing the law.

“New York City’s adoption of a five cent plastic bag fee is environmentally friendly policy.  Numerous other municipalities across our country have introduced similar fees and have seen a large reduction in the usage of plastic bags,” said Council Member Andrew Cohen. “The state legislature’s bills to nullify this law will usurp upon the domain of the City which would create a dangerous precedent where Albany could overturn any municipality’s local laws.” 

EDITOR'S NOTE: 

Councilman Andrew Cohen forgets that his council district is right at the border of the Westchester County line where there will be no bag fee (Tax). 

Instead of giving the bag fee (tax) to store owners who will gouge shoppers why is this bag fee (tax) not being given back to the customer as in the five cent deposit on plastic beverage bottles. 

The City Council has a novel idea, but is implementing it in the wrong way, and that is why there will be opposition to the 'Bag Tax'. 

Manhattan U.S. Attorney And NYPD Commissioner Announce Arrest Of Narcotics Dealer Responsible For Heroin Overdose Death

   Preet Bharara, the United States Attorney for the Southern District of New York, and James P. O’Neill, the Commissioner of the New York City Police Department (“NYPD”), announced the unsealing of a complaint charging FABRICE DIAZ, 24, with narcotics dealing that resulted in the overdose death of a 25-year-old man.

The complaint alleges that DIAZ participated in a conspiracy to distribute heroin, and that heroin distributed by DIAZ resulted in the death of Robert Vivolo, age 25, of the Bronx, New York, on October 21, 2016. DIAZ was arrested Friday morning and was presented in Manhattan federal court before United States Magistrate Judge Katharine H. Parker. DIAZ faces a mandatory minimum term of 20 years in prison.

U.S. Attorney Preet Bharara stated: “Once again, we are confronted with the lethal effects of the opioid abuse epidemic. As alleged, Fabrice Diaz sold the heroin that sadly killed Robert Vivolo. Thanks to the outstanding partnership with the New York City Police Department, we seek to combat the deadly opioid crisis one alleged drug dealer at a time.”

According to the Complaint[1]:

From at least in or about October 2016 up to January 2017, in the Southern District of New York and elsewhere, FABRICE DIAZ and others conspired to sell heroin. As part of that conspiracy, on or about October 21, 2016, DIAZ exchanged text messages with Robert Vivolo, a 25-year-old heroin addict who lived on City Island, in the Bronx, New York. In those messages, DIAZ arranged to sell heroin to Vivolo, and DIAZ delivered heroin to Vivolo’s home. A short time later, Vivolo overdosed on that heroin and died.

After Vivolo’s death, DIAZ was arrested on separate charges in New Rochelle, New York, on or about January 11, 2017, in possession of 17 envelopes of heroin.

DIAZ faces a maximum sentence of life in prison, and a mandatory minimum sentence of 20 years in prison.

The statutory maximum sentence is prescribed by Congress and is provided here for information purposes only, as any sentencing of the defendant would be determined by a judge.

Mr. Bharara praised the investigative work of the NYPD. Mr. Bharara also thanked the Westchester County District Attorney’s Office and the New Rochelle Police Department for their assistance in the investigation. Mr. Bharara noted that the investigation remains ongoing.

This matter is being handled by the Office’s Narcotics Unit. Assistant United States Attorney David W. Denton Jr. is in charge of the prosecution.

The charges contained in the Complaint are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

---

[1] As the introductory phrase signifies, the entirety of the text of the Complaint, and the description of the Complaint set forth herein, constitute only allegations, and every fact described should be treated as an allegation.

Manhattan Man Sentenced To More Than 6 Years In Prison For Child Pornography Offenses

   Preet Bharara, the United States Attorney for the Southern District of New York, announced today that PAAL KLYKKEN, 35, was sentenced to 78 months in prison and supervised release for seven years for distributing and receiving child pornography. KLYKKEN pled guilty on September 1, 2016, before U.S. District Judge Valerie E. Caproni, who also imposed today’s sentence.

U.S. Attorney Preet Bharara stated: “Paal Klykken admitted to serially taking advantage of and victimizing his minor neighbor. Today, he has been sentenced to prison for his predatory criminal behavior.”

According to documents filed in this case and statements made in related court proceedings:

From at least early 2015 up to and including January 2016, KLYKKEN communicated by email and a social messaging app with a minor girl (the “Minor Victim”) who lived in a neighboring apartment. Because of the relative positions of their respective apartments, KLYKKEN was able to view inside the Minor Victim’s bedroom from his own apartment window while they communicated. The communications were often sexual, and KLYKKEN repeatedly enticed the Minor Victim to pose in sexual positions and engage in sexually explicit conduct while KLYKKEN watched from his home, often with the aid of a camera.

On March 18, 2016, KLYKKEN was arrested in Manhattan. After his arrest, KLYKKEN admitted, among other things, that, in addition to the conduct with the Minor Victim, for approximately 18 years, he had live-streamed and downloaded child pornography.

Mr. Bharara praised the efforts of the Federal Bureau of Investigation and expressed deep appreciation for the contribution of the New York City Police Department Vice Major Case Squad to this investigation.

Former Treasurer Of Patterson Fire Department Sentenced To 33 Months In Prison For Embezzlement And Filing False Tax Returns

   Preet Bharara, the United States Attorney for the Southern District of New York, announced today that ALBERT MELIN, the former treasurer of the volunteer Patterson Fire Department (“PFD"), was sentenced today by U.S. District Judge Nelson S. Roman to 33 months in prison for fraud and tax charges arising out of his embezzlement of more than $1.1 million from the PFD.

According to documents filed in court, MELIN, a chiropractor, was elected treasurer of the PFD in 2013. From in or about December 2013 to in or about October 2015, MELIN embezzled PFD funds under his control by writing checks to the two businesses he owned, 211 Medical, P.C. (“211 Medical”), and N.A.S. Management Co., Inc. (“N.A.S.”). MELIN then deposited the checks to bank accounts held by 211 Medical or N.A.S. MELIN also charged expenses of 211 Medical and N.A.S. to the PFD’s debit card.

MELIN embezzled more than $1.1 million by writing more than 130 fraudulent checks. He used the money to support 211 Medical and N.A.S., to make payments on his home mortgage loan and to pay personal expenses, including the costs of family vacations. MELIN failed to report this income on his personal return for 2014 and falsely reported some of the embezzled funds as revenue on the corporate return for 211 Medical in an effort to disguise their source.

On November 2, 2016, MELIN pled guilty to one count of wire fraud, which carries a maximum sentence of 20 years in prison, and one count of subscribing to false tax returns, which carries a maximum sentence of three years in prison.

In addition to the prison sentence, MELIN, 46, of Cary, North Carolina, was sentenced to three years of supervised release. Judge Roman also ordered MELIN to forfeit $1,151,665.76 in ill-gotten gains and to pay $1,349,318.76 in restitution.

Mr. Bharara praised the outstanding investigative work of the IRS, FBI, New York State Comptroller, and New York State Police. He thanked the Putnam County District Attorney’s Office for its assistance in the investigation.