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Co-Conspirators in Brooklyn Clinic Medicare Fraud Scheme Continue to Plead Guilty

A huge percentage of whistleblower cases filed under the federal False Claims Act involve some sort of Medicare fraud. In a $71 million Medicare fraud scheme in Brooklyn, New York, the Justice Department has criminally charged 16 individuals, 11 of whom have pleaded guilty to the conspiracy. The defendants include two physicians, nine individuals who either owned, operated or worked at the clinic as well as five external money launderers. At this point, five people are scheduled to be tried beginning January 22.

The Medicare fraud scheme involves a Brooklyn health clinic, Bay Medical clinic, operating under three different corporate names: SVS Wellcare Medical PLLC, Bay Medical Care PC, and SZS Medical Care PLLC. Defendants who owned, ran or worked at the clinic are alleged to have paid cash kickbacks to patients on Medicare. The defendants allegedly billed Medicare for more than $71 million in services to the Medicare beneficiaries, which services were not actually provided or were medically unnecessary. The phony services included diagnostic tests, physical therapy and alleged office visits with a doctor. The clinic allegedly contained a “kickback room,” in which the corrupt Medicare beneficiaries were paid around a thousand separate kickbacks totaling more than $500,000 over a six week period between April and June 2010.

Three residents of Brooklyn, New York who were employees of Bay Medical Clinic pleaded guilty in November for their roles in the health care fraud scheme:

  • Katherina Kostiochenko, 34, pleaded guilty to: health care fraud, conspiracy to commit health care fraud, and conspiracy to pay kickbacks. She faces a maximum 25-year prison sentence for her role in the health care fraud conspiracy.
  • Sergey V. Shelikhov, 51, pleaded guilty to: conspiracy to commit health care fraud.  He could receive a maximum penalty of ten years in prison.
  • Leonid Zheleznyakov, 28, pleaded guilty to: conspiracy to commit health care fraud.  He also faces a maximum ten-year prison sentence.

In December, the Justice Department reported that another co-conspirator pleaded guilty.  Yuri Khandrius, 50, admitted in court that he conspired to pay kickbacks and to commit health care fraud.  He pleaded guilty to one count of health care fraud, one count of conspiracy to commit health care fraud and one count of conspiracy to pay kickbacks.  At sentencing, Khandrius could receive as much as 25 years in prison.

Whistleblowers Have the Power to End Medicare Fraud

Medicare fraud schemes like the one at Bay Medical Clinic in Brooklyn are often uncovered when a whistleblower steps forward to file a False Claims Act lawsuit.  Whistleblowers help the government to eliminate health care fraud.  In return, the qui tam provisions of the False Claims Act allow individual whistleblowers to receive part of any amount received by the government in settlement of the whistleblower’s lawsuit.

Understanding your legal rights under the False Claims Act is important. Waters & Kraus’ qui tam attorneys can help.  Send us an email or call our whistleblower lawyers at 800.226.9880 to learn more about our practice and how we can assist.

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That’s the first question everyone asks. The truth is it’s impossible to know. But we can tell you this. Waters Kraus & Paul has what it takes to fight against big corporate interests and win. That’s why we’ve taken more mesothelioma trials to verdict than any other firm. And that’s why we’ve recovered more than $1.3 billion for clients like you. Do you think you have a case? Contact us now to speak with an attorney.

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