N.Y. U.S. Attorney: Leader and Members of Moscow-Based Health Care Fraud and Money Laundering Conspiracy Charged in International Telemedicine Scheme

BROOKLYN, New York, Nov. 8 -- The U.S. Attorney for the Eastern District of New York, Breon Peace, issued the following news release on Nov. 7, 2023:

A third superseding indictment was unsealed today in federal court in Brooklyn charging Brian Michael Sutton, Brycen Kay Millett, Anthony Santamaria, Joshua Manuel Alegria, Hershel Tsikman and Hafizullah Ebady with conspiracy to commit health care fraud, health care fraud and money laundering conspiracy. As alleged, the defendants participated in an international scheme to acquire pharmacies across the United States with pre-existing relationships with private health insurance companies. Using those pharmacies, in conjunction with call centers to induce individuals to accept unnecessary medications and a network of recruited physicians, the defendants generated more than $500 million in fraudulent prescriptions purportedly filled by the scheme pharmacies.

Santamaria, Alegria and Tsikman were arrested today in California and will be arraigned this afternoon in federal court in Los Angeles. Millett and Ebady were previously indicted and arrested on health care fraud charges, and will be arraigned at a later date. Sutton remains at large and is believed to reside in Moscow.

Breon Peace, United States Attorney for the Eastern District of New York and James Smith, Assistant Director-in-Charge, Federal Bureau of Investigation, New York Field Office (FBI) announced the arrests and charges.

"As alleged, the defendants orchestrated a massive international scheme to defraud American businesses out of hundreds of millions of dollars and attempted to hide behind multiple aliases, shell companies and straw owners," stated United States Attorney Peace. "Fraudulent healthcare billing drives up the cost of medical services for all those who need it. We will continue to aggressively investigate and prosecute those who take advantage of health care plans."

Mr. Peace thanked the Port Authority of New York and New Jersey, Office of Inspector General, for their invaluable assistance in the investigation.

"The defendants allegedly carried out a complex international health care fraud scheme that led to over half billion dollars in fraudulent prescriptions. Health care fraud schemes like this affect those directly targeted, but ultimately the general public who face increased medical costs as a result. The FBI will see to it that anyone attempting to benefit from health care fraud will face punishment in the criminal justice system," stated FBI Assistant Director-in-Charge Smith.

As alleged, between 2017 and 2022, Sutton, a U.S. citizen residing in Russia, led his co-defendants in carrying out an international scheme to bill private insurers for hundreds of millions of dollars' worth of fraudulent prescriptions. At Sutton's direction, the conspirators oversaw call centers initially based in Utah, but later operated from Russia and other foreign nations. Call center employees telephoned beneficiaries enrolled in private insurers' health care plans and offered prescription medications at little to no cost to the beneficiaries and without any medical exam to determine the medical necessity for those medications. The defendants also recruited doctors purportedly to review prescriptions by nurse practitioners and physician's assistants after telemedicine visits. Contrary to what the recruited doctors were told, in many cases there were no telemedicine visits between the beneficiaries and any medical professionals. The conspirators generated fraudulent prescriptions under the physicians' names and National Provider Identifier (NPI) numbers. Despite the prescriptions, many beneficiaries never received the medications.

To conceal their involvement, the defendants operated under multiple aliases, funneled millions of dollars through pass-through shell companies and straw owners, used end-to-end encrypted communications and moved operations overseas. Specifically, the defendants purchased and operated dozens of existing brick-and-mortar pharmacies through straw owners including in Brooklyn, Staten Island, Manhattan, Long Island, New Jersey, Pennsylvania, Texas, Michigan and Alabama. The conspirators also laundered millions of dollars in fraudulent proceeds from overseas through pass-through shell companies that they used to purchase the scheme pharmacies and conceal the defendants' involvement.

After acquiring the brick-and-mortar pharmacies, the conspirators oversaw the installation of pharmacy management software that allowed for the remote submission of reimbursement requests by the scheme pharmacies to private insurers; they also trained and supervised a team of "billers" that remotely submitted hundreds of thousands of reimbursement requests totaling over $500 million for over 50 pharmacies. Ultimately, private insurers paid over $280 million as a result of the fraudulent billing.

Co-conspirators Dela Saidazim pleaded guilty in February 2023 and David Gary Bishoff pleaded guilty in March 2023 to health care fraud conspiracy and are awaiting sentencing.

The charges in the superseding indictment are allegations, and the defendants are presumed innocent and unless and until proven guilty.

The government's case is being handled by the Office's Business and Securities Fraud Section. Assistant United States Attorneys John Vagelatos, Jessica Weigel and Jonathan P. Lax are in charge of the prosecution with assistance from Paralegal Specialist William Daniels. Claire S. Kedeshian of the Office's Asset Recovery Section is handling forfeiture matters.

The New Defendants:

BRIAN MICHAEL SUTTON (also known as "Mike Summers," "Mike Miller" and "Ryan White")

Age: 31

Moscow, Russia

ANTHONY SANTAMARIA (also known as "Big Boy," "Wade Watts," "Pablo Rodriguez," "Ryan Rusty" and "Bruce Peter")

Age: 31

North Hollywood, California

JOSHUA MANUEL ALEGRIA (also known as "Jboy," "Jaxon Asher" and "Turk Malloy")

Age: 32

Woodland Hills, California

HERSHEL TSIKMAN (also known as "Andrew Milner," "Andrew M.," "Linus Caldwell,"

"Adam Schneider," "Jonathan Martin," and "H")

Age: 30

Studio City, California

Previously Charged Defendants:

BRYCEN KAY MILLETT (also known as "Brett Johnson" and "Tommy Wilkinson")

Age: 33

Saint George, Utah

HAFIZULLAH EBADY (also known as "Hafiz Ebady")

Age: 45

Parsippany, New Jersey

Co-Conspirators Who Previously Pleaded Guilty:

DAVID GARY BISHOFF (also known as "Bobby Fischer")

Age: 39

Saint George, Utah

DELA SAIDAZIM (also known as "Delila," "Gina Payne," and "Olivia Rothstein")

Age: 34

Moscow, Russia

E.D.N.Y. Docket No. 21-CR-564 (S-3) (WFK)

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Original text here: https://www.justice.gov/usao-edny/pr/leader-and-members-moscow-based-health-care-fraud-and-money-laundering-conspiracy