R.I. U.S. Attorney: Nurse Practitioner Sentenced in Twelve Million Dollar Health Care Fraud Scheme

PROVIDENCE, Rhode Island, April 6 -- The U.S. Attorney for the District of Rhode Island, Zachary A. Cunha, issued the following news release on April 5, 2023:

A registered nurse and nurse practitioner, who defrauded commercial health insurers and Medicare of nearly $12 million by devising and executing fraudulent billing schemes in three states seeking payment for patient services that were never performed, has been sentenced to seven years in federal prison, announced United States Attorney Zachary A. Cunha.

Alexander A. Istomin, 57, pleaded guilty in October 2022 to an eleven-count Information charging him with health care fraud, mail fraud, aggravated identity theft, and causing the introduction of misbranded drugs into interstate commerce. Istomin admitted that he routinely submitted fraudulent claims for in-person patient services that he did not perform, including supposed patient visits at a "ghost office" in Rhode Island and at offices in Florida and New York. Istomin used seven different tax identification numbers while defrauding eight insurers out of a total of $11,923,686.30.

The "ghost office" was an address that Istomin maintained in East Greenwich, Rhode Island, that he claimed was part of his medical practice when, in fact, he used the location solely for the purpose of receiving mail, including fraudulently obtained insurance payments.

"By billing for services that he never performed, including at a Rhode Island location that was little more than a mail drop, Alexander Istomin thought he could make off with millions in taxpayer and insurance dollars that were meant to fund real medical care, for real people, all without consequence," remarked U.S. Attorney Zachary Cunha. "He was very much mistaken. The sentence imposed reflects both this Office's commitment to bring to justice individuals who perpetrate this kind of brazen fraud and abuse of our health care system, and should serve notice of the consequences for those who seek to enrich themselves through schemes like these."

"The Office of Inspector General will continue to fervently pursue those who defraud the Medicare system. Greed, at the expense of our most vulnerable citizens, will not be tolerated," said Phillip M. Coyne, Special Agent in Charge for the Office of Inspector General of the U.S. Department of Health and Human Services. "Today's sentencing is a strong reminder that we will spare no resource to bring to justice those that undermine the integrity of our federal health care system and those served by it."

"Alexander Istomin went to great lengths to conceal his multi-state, multi-million-dollar health care fraud scheme, billing for services he never provided and patients he never saw. With the proceeds of his illegally gotten gains, he bought a million-dollar home in Florida and expensive cars. This sentence is more than just, given that this is not the first time Mr. Istomin has been accused of health care fraud, nor is it his first brush with the law," said Joseph R. Bonavolonta, Special Agent in Charge of the FBI Boston Division. "The unscrupulous tactics he used to steal from taxpayers is what drives our investigators to combat healthcare fraud. After all, these taxpayer-funded programs are designed to provide essential medical services to the elderly and disadvantaged, not to enrich corrupt health care professionals and other fraudsters."

According to documents and information provided to the court, in many instances, patients that Istomin claimed he met with in person were, in fact, out of the country at the time of the supposed visits. On other occasions that Istomin claimed to have been seeing patients, he himself was either in a different state or another country, often visiting his native Russia.

As part of his schemes, Istomin waived copayments for some Medicare patients, despite being aware that waiving copayments is prohibited. He did so to induce his patients not to report his fraudulent billing to Medicare. Additionally, Istomin used patient names and information to get prescriptions filled at various pharmacies and be returned to him. Istomin then distributed those drugs to individuals other than those in whose names the prescriptions were filled.

On Tuesday, U.S. District Court Chief Judge John J. McConnell, Jr., sentenced Istomin to 84 months of incarceration to be followed by three years of federal supervised release; to pay a fine of $30,000; and to pay restitution to Medicare and private insurers totaling $11,923,686.30.

The case was prosecuted by Assistant U.S. Attorney Dulce Donovan, with the assistance of Assistant U.S. Attorneys Milind M. Shah and Mary Rogers.

The matter was investigated the U.S. Department of Health and Human Services, Office of Inspector General; Federal Bureau of Investigation; and the Food and Drug Administration, Office of Criminal Investigations.

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Original text here: https://www.justice.gov/usao-ri/pr/nurse-practitioner-sentenced-twelve-million-dollar-health-care-fraud-scheme