OHIO MAN PLEADS GUILTY TO LAUNDERING HEALTH CARE FRAUD PROCEEDS FOR TRANSNATIONAL CRIMINAL ORGANIZATION

The following information was released by the U.S. Department of Justice:

An Ohio man pleaded guilty yesterday to laundering approximately $3.4 million in illicit health care fraud proceeds through multiple regional banks on behalf of a transnational criminal organization (Organization).

According to court documents, Eldar Zarbavel, 45, of Pepper Pike, Ohio, was a money launderer for the foreign-based Organization that spearheaded the largest health care fraud case ever prosecuted by the Department of Justice, as uncovered byOperation Gold Rush. The Organization, based in Russia and elsewhere, orchestrated a multi-billion-dollar health care fraud and money laundering scheme to target, exploit, and steal from Medicare and private health insurance companies.

To date, 35 individuals have been charged as part of Operation Gold Rush. Zarbavel is the 16th individual to be convicted for his role in the scheme.

As alleged in charging documents, the Organization exploited the United States' financial system by depositing insurance reimbursement checks from the fraud. The health care fraud proceeds were particularly susceptible to laundering because they originated from legitimate sources Medicare and established private insurance carriers giving the funds the initial appearance of legitimacy. To gain access to the United States' financial system, the Organization deployed a range of tactics to circumvent internal controls at multiple banks and in some cases coordinated directly with associates employed at the banks.

As further alleged, to open financial accounts, the Organization armed its nominee owners with false sale documentation and false corporate registration documents. This documentation falsely reflected that the nominee owners maintained beneficial ownership and control of various fraudulent durable medical equipment (DME) companies. This disguised the true beneficial ownership and control of the companies and the financial accounts. Upon opening the financial accounts, the Organization funneled fraud proceeds from Medicare and other legitimate health care insurers into the accounts as seemingly "clean" money. From there, the Organization siphoned off the funds to shell companies and various banks overseas.

Zarbavel facilitated a critical element of the transnational scheme by opening bank accounts in Northeast Ohio for Royce Medical Supply LLC, a Florida-based DME company. Between July 2022 and July 2024, the Organization submitted $1.42 billion in false and fraudulent claims to Medicare and other health insurers through this DME company. While the Centers for Medicare and Medicaid Services suspended reimbursement on nearly all of these claims, some claims were paid. Between June and July of 2024, Zarbavel, at the direction of members of the Organization, facilitated the deposit, transfer, and withdrawal of approximately $3.4 million in fraud proceeds for the benefit of the Organization.

Zarbavel pleaded guilty to one count of money laundering. He is scheduled to be sentenced on Dec. 16. He faces a maximum penalty of 20 years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

Assistant Attorney General Colin M. McDonald of the Justice Department's National Fraud Enforcement Division; Acting Deputy Inspector General for Investigations Scott J. Lampertfor the Department of Health and Human Services Office of the Inspector General (HHS-OIG); and Special Agent in Charge Jennifer Runyan of the FBI Detroit Field Office made the announcement.

HHS-OIG and FBI are investigating the case.