On December 1, 2022, the U.S. Department of Justice issued a press release announcing the sentencing of two facility owners who were convicted for their role in an $18 million healthcare fraud scheme.  According to the government, Tea Kaganovich and Ramazi Mitaishvil, a married couple, owned several diagnostic testing facilities. In exchange for referrals, the couple paid over $18 million in illegal kickbacks.  The federal government also noted that the couple underreported business income and improperly claimed deductions on their taxes.

Like many enforcement actions, this was a joint effort with several agencies helping with the investigation, including HHS-OIG, FBI, and IRS-CI.  The New York Attorney General’s office was also involved and obtained a conviction for the couple in 2019.  The 2019 conviction was for a similar healthcare fraud scheme involving the New York State Medicaid program. According to the NY Attorney General’s office, the couple (along with several other individuals) were convicted of fraudulently billing Medicaid for more than $8 million for fraudulent diagnostic testing services.  Kaganovich and Mitaishvili have agreed to pay $18 million in restitution as part of a civil settlement agreement.  As part of their plea agreement, Kaganovich and Mitaishvili agreed that they individually and through their corporations engaged in a “scheme to subject Medicaid recipients to a battery of diagnostic tests that were neither medically necessary and were fraudulently referred,” according to the NY Attorney General’s press release.  

While the DOJ’s December 2022 press release did not detail the investigation, the NY Attorney General’s office noted that its investigation “involved undercover operations and the execution of search warrants at Multi-Specialty locations” and revealed that Kaganovich and Mitaishvili conspired with medical providers and “street recruiters” to solicit Medicaid recipients for treatment.  Once the beneficiaries were present at Multi-Specialty, a medical clinic, the medical provider would sign referral forms, sometimes without actually seeing the patients.  The referral forms were for unnecessary diagnostic services to be fraudulently performed by Kaganovich’s and Mitaishvili’s technicians, according to the NY Attorney General. The entire scheme involved medical doctors, street recruiters, and an individual engaging in unauthorized practice of medicine to provide a façade of legitimacy.  

This case is a reminder that several states have laws that mirror federal laws, especially healthcare fraud and kickback laws.  Providers should ensure compliance with both federal and state laws.  As shown by the enforcement actions involving Kaganovich and Mitaishvili, federal and state governments (along with their respective agencies) often work together.  Providers and business owners should know that the federal government and state governments may bring separate actions based on an investigation being handled jointly by the entities or based on the sharing of information between government entities.  

The attorneys at Chilivis Grubman represent clients of all types and sizes in connection to federal and state investigations. If you need assistance with such a matter, please contact us today.