Saks Fifth Avenue; plus expensive jewelry
Some 37 high-ranking members have
been indicted. They are doctors, lawyers,
chiropractors, and other professionals. If
convictions come down, then Zemlyansky’s suspected gang may be gutted.
Another aspect of the mega gangs:
Much of the stolen money leaves the
U.S. and may never be fully traced. What
other crime the money helps fund—
beyond sports cars and mansions—is fuel
for much added investigation.
“These organizations are using part of
this money for other things. It [has] been
documented through investigations of
this money leaving the county, leaving
the state of Florida, whether it be back to
Cuba, Mexico, the Cayman Islands, Costa
Rica. So it’s a lot bigger than what a lot
of people understand, and the fact is that
schemes signals a dangerous expansion that
poses a serious threat to consumers as these
syndicates are willing to exploit almost any
program, business or individual to earn an
illegal profit,” says Acting Deputy U.S. At-
torney General Gary G. Grinder.
names and identities of patients. They
were recruited for worthless crash-injury treatments, with Karazianis’ mobsters
creating a fake hospital-referral service
for crash victims. Some patients received
painful nerve-conduction tests regardless of medical need, prosecutors say.
F Dennis Jay
it’s not just a staged crash and it’s not just
insurance fraud,” Det. Ronnie Cooper, a
special investigator with the Hillsboro,
Fla. sheriff’s office, said in testimony
about organized crime to the state legislature last year.
A Sinister Underworld
Insurance fraud thus links into a larger
and more sinister crime world. Syndicates
that bilk auto insurers often engage in banking and credit card fraud, drugs and other
crimes. Stolen insurance money could be
helping finance these other crimes.
Rings also may be franchises of, or at
least tied to, larger mob organizations back
in their home countries. Insurance fraud
then becomes an integral part of larger spider webs of global corruption and deceit.
North Korea even has resorted to insurance fraud to help finance its crumbling
economy, according to news reports.
“The emergence of international organized crime in domestic healthcare fraud
An Expanded Fraud Menu
Unfortunately insurance fraud was
only part of AP’s alleged portfolio. Iden-
tity theft, banking fraud, extortion, kid-
napping, drugs, guns and
other crimes were on the
menu. In one kidnapping
scheme, several AP mem-
bers allegedly seized a
victim and forced him to
pay ransom. Several de-
fendants targeted another
victim in an extortion
scheme lasting several
months. They threatened the victim and
his family to extract repeated payments,
the FBI alleges.
AP also deals directly with high-level
Armenian/Russian organized crime figures, both within the United States and
abroad, the FBI says.
Armen Karazianis is another cautionary tale. He was a vor, or overlord, of a
vast Armenian cartel in Southern California. He was busted last year in a takedown of dozens of Armenian gangsters.
Karazianis erected 118 sham medical
clinics spanning 25 states. He looted insurers with $160 million in claims for
worthless medical treatment.
His bust last year “provides additional
evidence of the efforts by international
organized crime to defraud the Medicare system,” said U.S. Attorney Edward
Tarver. He staged crashes to generate
bogus injury claims. The gang funneled
kickbacks to an employee of a New York
City hospital. The employee stole the
Organized crime gangs are
Bleeding The Medicare System
multitasking across lines of
insurance. The same gang
may be fleecing Medicare and
running medical mills connected
to staged-crash rings.
Karazianis also specialized in bleeding Medicare, a favorite target of fraud
rings. He masterminded one of the bigger attempted Medicare heists in history—$163 million in false claims.
Many clinics were sham. No patients
came for treatment, and no doctors were
on staff. He simply invented patients and
treatments and then slid the bills through
Medicare’s payment system. One “clinic”
in New York was merely a small office
over an auto-body shop in Coney Island.
One of his clinics stole the identities of
2,900 Medicare patients in Orange County, Calif., prosecutors charge. Their information was used for fake claims involving
bladder tests, pregnancy ultrasounds and
other treatments. He also specialized in
kidnapping, extortion, credit-card fraud
and counterfeit checks.
Karazianis received three years in federal prison in 2011. The sentence was relatively light, but he was the first vor ever
convicted. That alone sent a loud message
to vors of other Armenian gangs.
Theft By Force
Violence and intimidation also can be
part of the new fraudscape. Organized
crime rings enforce discipline, expand
territory and settle scores. Kelechi Chuk-wueke, for example, staged car crashes,
auto thefts and other cons in California.
His gang threatened girlfriends, acquaintances, relatives and neighbors into taking part.
Some 22 of his gang members were convicted after an eight-year romp that stole at
least $500,000 in insurance money. Chuk-wueke also illustrates another principal:
Many organized crime gangs are smaller
than their blimp-sized brethren but are
still quite effective.
Florida’s fraud bureau, for instance,
recently launched an ongoing takedown
called Operation Dark Horizon. It’s the