BROOKLYN, NY - Earlier today, Yuri Khandrius, 50, of Brooklyn, New York, was sentenced to eight years in prison for his role in a $77 million Medicare fraud scheme. In addition to the prison term, U.S. District Judge Nina Gershon of the Eastern District of New York sentenced Khandrius to three years of supervised release with a concurrent exclusion from Medicare, Medicaid and all Federal health programs, ordered him to forfeit $446,655 and ordered him to pay restitution in the amount of $10,000,000. Khandrius’s surrender date is Sept. 16, 2013.
The sentence was announced by U.S. Attorney for the Eastern District of New York Loretta E. Lynch; Acting Assistant Attorney General Mythili Raman of the Justice Department’s Criminal Division; George Venizelos, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI); and Special Agent-in-Charge Thomas O’Donnell of the HHS Office of Inspector General (HHS-OIG).
Khandrius pleaded guilty on Dec. 3, 2012 to one count of conspiracy to commit health care fraud, one count of health care fraud and one count of conspiracy to pay kickbacks. Including Khandrius, 13 individuals were convicted in this case, either through guilty plea or trial conviction.
According to court documents, from 2005 to 2010, Khandrius was an employee of a clinic in Brooklyn that operated under three corporate names: Bay Medical Care PC, SVS Wellcare Medical PLLC and SZS Medical Care PLLC (Bay Medical clinic). According to court documents, the owners, operators and employees of the Bay Medical clinic paid cash kickbacks to Medicare beneficiaries and used the beneficiaries’ names to bill Medicare for more than $77 million in services that were medically unnecessary or never provided. The defendants billed Medicare for a wide variety of fraudulent medical services and procedures, including physician office visits, physical therapy and diagnostic tests.
According to trial testimony, Khandrius, who holds no medical licenses or certifications, impersonated his co-defendant Dr. Gustave Drivas at the clinic. Dr. Drivas was the Bay Medical clinic’s “no-show" doctor. Khandrius admitted at his change of plea hearing that he signed prescriptions and medical charts in Drivas’s name, and performed medical tests and procedures on patients although he was not licensed to do so. Khandrius’s impersonation of Dr. Drivas assisted the conspirators in disguising the use of Drivas’s Medicare billing number to bill more than $20 million in claims for services that were not rendered or medically unnecessary. (Drivas was convicted of health care fraud conspiracy and health care fraud by a jury after a seven-week trial.) According to trial testimony, Khandrius also directed a phony allergy testing fraud at the Bay Medical clinic that involved giving patients bottles of tap water instead of allergy medications, wrote prescriptions for co-workers and at least one minor child using Dr. Drivas’s prescription pad and in response to a written audit from Medicare, falsely filled out medical charts in an attempt to back up the billing and deceive Medicare.
The government’s investigation included the use of a court-ordered audio/video recording device hidden in a room at the clinic, in which the conspirators paid cash kickbacks to corrupt Medicare beneficiaries. The conspirators were recorded paying approximately $500,000 in cash kickbacks during a period of approximately six weeks from April to June 2010. This room was marked “PRIVATE" and featured a Soviet-era poster of a woman with a finger to her lips and the words “Don’t Gossip" in Russian. The purpose of the kickbacks was to induce the beneficiaries to receive unnecessary medical services or to stay silent when services not provided to the patients were billed to Medicare.
This case is being prosecuted by Trial Attorney Sarah M. Hall of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Shannon Jones of the Eastern District of New York. The case was investigated by the FBI and HHS.
The case was brought as part of the Medicare Fraud Strike Force, supervised by the Criminal Division’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of New York. The Medicare Fraud Strike Force operations are part of the Health Care Fraud Prevention & Enforcement Action Team (HEAT), a joint initiative announced in May 2009 between the Department of Justice and HHS to focus their efforts to prevent and deter fraud and enforce current anti-fraud laws around the country.
Since its inception in March 2007, the Medicare Fraud Strike Force, now operating in nine cities across the country, has charged more than 1,500 defendants who have collectively billed the Medicare program for more than $5 billion. In addition, HHS’s Centers for Medicare & Medicaid Services, working in conjunction with HHS-OIG, is taking steps to increase accountability and decrease the presence of fraudulent providers.
To learn more about the Health Care Fraud Prevention and Enforcement Action Team (HEAT), go to: www.stopmedicarefraud.gov.
Source: U.S. Department of Justice, Office of the United States Attorneys
