Hall of Shame: Armenian mob boss milks Medicare for $160 million

By James Quiggle
December 22, 2011

Vor. It’s an obscure word, good for scoring points in Scrabble. But in the world of Armenian mobsters, a Vor is the godfather, the don — the gang’s overlord.

Armen Karazianis was a Vor who ran a vast Armenian criminal gang in the U.S. The far-reaching kleptocracy brazenly looted American taxpayers with $160 million in bogus treatment claims against Medicare.

stethoscope-crime2It was alpha thievery to the max, one of the biggest Medicare heists ever committed by a single criminal enterprise.

His gang was “a veritable fraud franchise” that “puts the traditional Mafia to shame,” said a federal prosecutor at his trial. Karazianis’ Medicare thievery was “diabolical,” the head of the FBI’s New York operation added.

Karazianis was busted in a takedown of dozens of Armenian gangsters charged with creating 118 fake medical clinics spanning 25 states. His gang stole the identities of doctors and Medicare beneficiaries, using that information to feast on taxpayer money.

Many clinics were shams. No patients came for treatments, and no doctors were on staff. The treatments were all on paper, and well-disguised to slide through Medicare’s claim-payment system. One New York “clinic” was merely a small office over an auto-body shop in Coney Island.

bribeAn Orange County, Calif. clinic stole the identities of 2,900 Medicare patients treated there, prosecutors say. Their information was used for fake claims involving bogus bladder tests, pregnancy ultrasounds and other treatments.

Two other Karazianis mobsters bribed a New York City hospital employee to steal the names of patients. The gang then recruited the patients for bogus treatments, sometimes posing as a hospital referral service that helped crash victims. They also allegedly staged car crashes to generate more bogus injury treatment claims. They gave crash patients painful nerve-conduction tests regardless of the medical need, prosecutors say.

One of his suspected lieutenants threatened to disembowel a fellow thug who owed him money. Others have fled to Russia and Armenia to escape prosecution.

Kazarian ended up with three years in federal prison after agreeing not to fight the charges. The sentence was relatively modest, but he was the first Armenian Vor ever convicted of racketeering, according to news reports.

His bust drew the curtain back further on the widespread involvement of Armenian gangs with insurance fraud. Another clinic in Glendale, Calif. made 6,000 false claims using the names of more than 800 unknowing Medicare patients. But no docs ever worked at the clinic. Nor were any patients treated. The clinic owner was handed 15 years in federal prison this year. Kidnapping, extortion, credit-card fraud and counterfeit checks also are lucrative menu items.

Despite his modest sentence, Kazarian’s conviction telegraphs a menacing signal to Armenian mobs, and their dons.

“His guilty plea sends a strong message to international gangsters all over the world that if you commit crimes in this country, we will find you and we will prosecute you to the full force of the law,” said federal prosecutor Preet Bharara.

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