Defendants Billed Medicare Over $1 MillionFor Tests Based On Falsified Physician’s Orders
SAN JOSE – LAWFUEL – United States Attorney Kevin V. Ryan announced that all five defendants pleaded guilty today for perpetrating a scheme that defrauded Medicare of over $1 million. According to the plea agreements, the defendants schemed to charge Medicare for tests that were based on falsified physician orders that claimed the tests were medically necessary. Physician Armond Tennyson Tollette II, pleaded guilty to conspiracy to commit healthcare fraud. Alexander Dzhuga, the owner of Direct Vision, AD, Inc., Leonid Dzhuga, the owner of National Diagnostic, Inc., Vladimir Semenov, the owner of Pulse Diagnostic Services, Inc., and Natalia Stadnik, the owner of Prolink Diagnostic, Inc., pleaded guilty to all sixty substantive counts of committing healthcare fraud. All defendants additionally agreed to pay restitution of over $909,000 for Medicare funds they received from their illegitimate claims.
U.S. Attorney Kevin V. Ryan stated, “Medicare benefits are paid for by the public and are meant for examinations and tests that are actually performed and are medically necessary. The theft of those benefits by these individuals involved in operating the Milpitas Medical Clinic, amounts to theft from the American taxpayer and from the Medicare beneficiaries who truly need medical treatment.”
In court, Tollette admitted that he had conspired with the owners and operators of the four ultrasound companies to establish the Milpitas Medical Clinic (MMC), with the intent of fraudulently billing Medicare for a) ultrasound tests supposedly performed at the clinic for patients that were never examined by Tollette or any other physician, b) for ultrasound tests which were not legitimately ordered by Tollette or any other physician, c) for ultrasound tests that were not medically necessary, and d) for ultrasound tests that were not performed by a certified technologist or for ultrasound tests that were never performed at all. Tollette further admitted that at the instruction, direction and agreement with the owners and operators of the four ultrasound companies, he and his co-conspirators submitted approximately $1,109,000 in fraudulent claims to Medicare, and received in excess of $909,000 in illegitimate reimbursements.
Alexander Dzhuga, Leonid Dzhuga, Vladimir Semenov and Natalia Stadnik all admitted that they participated in the scheme to defraud Medicare by knowingly submitting claims to Medicare, while knowing that the tests they billed for were either not medically necessary, not legitimately ordered by, nor supervised by any physician or were not performed by a certified technician or not performed at all. The four owners of the ultrasound companies further admitted that they knew Medicare patients had been recruited to the Milpitas Medical Clinic by promising them free transportation, food, and medical care, along with free “milk” or Ensure, and Chinese ointment or oil. Upon arrival at the clinic, workers at the clinic copied the beneficiaries’ Medicare cards. Other workers held themselves out as physicians and nurses and conducted a cursory examination of the beneficiaries. The four owners of the ultrasound companies also admitted that as part of the scheme to defraud Medicare, they and their employees performed ultrasound tests on the beneficiaries on the premises of MMC without first obtaining a legitimate physician’s order based on medical necessity. In reality, neither Tollette nor any other physician actually examined the beneficiaries, nor conducted the ultrasound tests which were supposedly performed on the Medicare patients. The defendants admitted that the tests were ordered after they had already been performed and were not medically necessary.
Alexander Dzhuga of Encino, California, Leonid Dzhuga of Reseda, California, Vladimir Semenov of Sherman Oaks, California, Natalia Stadnik of Reseda, California, and Armond Tollette, II, of Culver City, California, were indicted by a federal grand jury on September 15, 2005. They were charged with a total of sixty-one counts, including one count of conspiracy to commit health care fraud in violation of Title 18, United States Code, Section 1349, and sixty counts of health care fraud and aiding and abetting in violation of Title 18, United States Code, Sections 1347 and 2 .
The sentencing of the Alexander Dzhuga, Leonid Dzhuga ,Vladimir Semenov and Natalia Stadnik is scheduled for April 18, 2007, at 10 a.m. before Judge Jeremy Fogel in San Jose. The sentencing of Armond Tollette, II is scheduled for May 9, 2007 at 10 a.m., also before Judge Fogel in San Jose. The maximum statutory penalty for each of the sixty-one counts is 10 years in prison, a $250,000 fine, 3 years of supervised release and restitution. However, any sentences following conviction would be imposed by the court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. § 3553.
Richard C. Cheng is the Assistant U.S. Attorney who prosecuted the case with the assistance of legal technician Kathy Huynh. The prosecution is the result of a two year investigation by the Federal Bureau of Investigation and the Department of Health and Human Services.
Further Information:
Case #: CR 05-589-JF
A copy of this press release and related court filings may be found on the U.S. Attorney’s Office’s website at www.usdoj.gov/usao/can.
Electronic court filings and further procedural and docket information are available at https://ecf.cand.uscourts.gov/ (click on the link for “to retrieve documents from the court”).
Judges’ calendars with schedules for upcoming court hearings can be viewed on the court’s website at www.cand.uscourts.gov.
All press inquiries to the U.S. Attorney’s Office should be directed to Luke Macaulay at (415) 436-6757 or by email at Luke.Macaulay@usdoj.gov.
