Gevork Kartashyan, Medicare Fraud, California 2009

LOS ANGELES, California - In a shocking turn of events, the owners of a Los Angeles-area medical equipment company, Gevork Kartashyan and Eliza Shubaralyan, were sentenced to prison for their involvement in a Medicare fraud scheme.

The scheme, which was uncovered in 2009, involved the duo billing Medicare for medically unnecessary power wheelchairs and accessories. According to evidence presented in court, Kartashyan and Shubaralyan, through their company CHH Medical Supply, billed Medicare $949,859 and were paid $597,750 as a result of the billing.

Virtually all of the billing was for medically unnecessary power wheelchairs and wheelchair accessories. The evidence showed that Kartashyan and Shubaralyan regularly purchased power wheelchair prescriptions, and after the power wheelchairs were delivered, Kartashyan generated phony forms stating that the beneficiaries’ homes were appropriate for the use of a power wheelchair, even though no home assessment was conducted.

The scheme was brought to light when elderly Medicare beneficiaries testified about how they were recruited into the scheme. According to testimony, the beneficiaries were taken to Los Angeles-area medical clinics, where they turned over their Medicare numbers and other personal identifying information. Some beneficiaries testified that they were promised vitamins, diabetic shoes and other items that they never received, in return for providing their beneficiary numbers.

Kartashyan and Shubaralyan were each sentenced to serve two years in prison by U.S. District Judge Stephen V. Wilson of the Central District of California. In addition, Kartashyan and Shubaralyan were ordered to serve three years of supervised release following their prison terms and to pay $400,000 in restitution, jointly and severally.

This case was prosecuted by Assistant Chief John S. (Jay) Darden and Trial Attorney Jonathan T. Baum of the Criminal Division’s Fraud Section. The case was brought as part of the Medicare Fraud Strike Force, supervised by the U.S. Attorney’s Office for the Central District of California and the Criminal Division’s Fraud Section, with investigatory assistance from the FBI, HHS-OIG and the California Department of Justice, Bureau of Medi-Cal Fraud and Elder Abuse.

The Medicare Fraud Strike Force has been instrumental in bringing to justice individuals and companies that have committed Medicare fraud. Since its inception in March 2007, Strike Force operations in seven districts have obtained indictments of more than 500 individuals who collectively have falsely billed the Medicare program for more than $1 billion.

Source: https://www.justice.gov/archives/opa/pr/owners-los-angeles-area-medical-equipment-company-sentenced-prison-medicare-fraud