Attorney General James Announces Twelve Convictions In Multi-Million Dollar Medicaid Medical Mill Case 

Attorney General James Announces Twelve Convictions In Multi-Million Dollar Medicaid Medical Mill Case 

Two Doctors and Two Corporate Presidents Among Those Convicted of Roles in Stealing Millions of Dollars From Medicaid; Will Pay $27.9 Million Dollars in Restitution   

NEW YORK -- Attorney General Letitia James today announced the convictions of Tea Kaganovich, 47, and Ramazi Mitaishvili, 58, both from Brooklyn, and Bernard Bentley, M.D., 61, of East Hampton, for their roles in fraudulently billing Medicaid for more than $8 million for fraudulent diagnostic testing services. Kaganovich and Mitaishvili were both convicted on charges of Grand Larceny in the First Degree; and Bentley, M.D., convicted on charges of Grand Larceny in the First and Third Degrees. Sophisticated Imaging, Inc., and East Coast Diagnostic, Inc., corporations owned by Kaganovich; East West Management, Inc., a corporation owned by Mitaishvili; and Bentley Medical PLLC, a company owned by Bentley, also each pled guilty to Grand Larceny in the First Degree. The Court is expected to sentence Kaganovich and Mitaishvili to one and a half to four and a half years in state prison, which they will serve concurrent to a federal sentence that they will receive at a later date in a similar healthcare fraud scheme prosecuted in federal court. Bentley’s sentence will be determined by the Court at a later date. 

“These individuals preyed on unsuspecting patients and stole government funds to line their own pockets,” said Attorney General Letitia James. “New Yorkers put their trust and health in the hands of medical professionals and providers and we expect them to fulfill their basic duty to provide real and sound care. Medicaid fraud is a serious crime and we will take action against anyone who seeks to cheat our system or our patients.” 

In addition to his guilty plea, Bentley entered into a civil settlement agreement whereby he agreed to pay restitution totaling $2.5 million dollars, money derived from the sale of his home in the Hamptons, two Tesla cars, and the contents of six bank and brokerage accounts. Kaganovich and Mitaishvili have separately agreed to pay $18 million dollars in restitution. All of the restitution, totaling $27.9 million dollars, is payable to the New York State Medicaid program.   

As part of their respective guilty pleas, Kaganovich, Mitaishvili and Bentley admitted that they individually and through their corporations engaged in a systematic scheme to subject Medicaid recipients to a battery of diagnostic tests that were neither medically necessary and were fraudulently referred. Kaganovich and Mitaishvili with the assistance of Bentley then submitted and caused to be submitted claims for reimbursement to the Medicaid program, including to Medicaid-funded managed care organizations (“MCOs”), based on fraudulent referrals for services that were either not provided or not medically necessary.  

Kaganovich, Mitaishvili, and Bentley’s convictions are the culmination of a multi-year investigation into the fraudulent activity of a medical mill, Multi-Specialty. Medical mills are purported medical clinics that solicit Medicaid recipients with promises of a nominal cash kickback, usually ranging between $20 and $50, in exchange for the recipient agreeing to submit to a medical evaluation and testing. Soliciting Medicaid recipients by offering to pay them to accept medical services paid by Medicaid is unlawful under state and federal law.   

The investigation leading to these convictions was conducted by the Attorney General’s Medicaid Fraud Control Unit (“MFCU”) and involved undercover operations and the execution of search warrants at Multi-Specialty locations in Manhattan and in the Bronx. The investigation revealed that Kaganovich and Mitaishvili conspired with others to create a scheme whereby street recruiters solicited Medicaid recipients to Multi- Specialty for treatment and testing and then upon arrival, required those recipients to submit to a series of unnecessary diagnostic procedures conducted by technicians working for Kaganovich and Mitaishvili. In turn, Kaganovich and Mitaishvili, through a complicit physician, Bentley, billed Medicaid and Medicaid-funded MCOs for those unnecessary services and then split the criminal proceeds further to a revenue sharing plan.   

To carry out the scheme, in addition to street recruiters, Azu Ajudua, formerly a licensed physician, acted as the owner of Multi-Specialty and signed referral forms for the unnecessary diagnostic services fraudulently performed by Kaganovich’s and Mitaishvili’s technicians. Ajudua and his corporation, AAA Medical P.C., previously pled guilty to Grand Larceny in the Second and Third Degrees for his involvement in the scheme. As part of his plea, Ajudua admitted that he signed referral forms without seeing patients and that he signed blank referral forms. Ajudua’s ultimate sentence will be determined by the court at a later date. 

An unlicensed “physician” Zheng Dong, who worked at one of the Multi-Specialty clinics, provided a façade of legitimacy. Dong previously pled guilty to Unauthorized Practice of a Profession, a felony. In pleading guilty, Dong admitted that he forwarded Ajudua’s previously signed blank referral forms to the diagnostic technicians employed by Kaganovich and Mitaishvili. To maximize billing, Ajudua allowed the unlicensed “doctors” including Dong to use his name and medical license to refer patients, including MFCU’s undercover investigators, for diagnostic testing from whichever technician was present at Multi-Specialty that day without regard to whether the ordered testing was medically necessary. Accepted medical practice requires that supplemental diagnostic testing only be rendered upon the order of a referring provider and that the referring provider have a legitimate medical need to order such testing. 

The investigation revealed that between January 1, 2014 and October 31, 2017, Bentley received more than $16 million dollars in reimbursement from Medicaid and HealthFirst, a Medicaid-funded MCO, of which more than $5.5 million dollars was for unnecessary diagnostic services ordered by Ajudua. Bentley, through Bentley Medical PLLC, transferred more than $13 million dollars of this money to Kaganovich and Mitaishvili.  In turn, Kaganovich and Mitaishvili, through their corporations, paid illegal kickbacks to cause the referral of patients for diagnostic testing regardless of medical need to Kaganovich and Mitaishvili’s corporations.   

Kaganovich, Mitaishvili, Bentley, Ajudua, and the companies owned by those individuals, all pled guilty in New York County Supreme Court. The sentencing for Kaganovich and Mitaishvili is scheduled for July 26, 2019. Dong and Johanna Ubiera, another employee of Multi-Specialty, pled guilty in New York City Criminal Court, Bronx County. Kaganovich and Mitaishvili also recently pled guilty in the US District Court for the Eastern District of New York court for various federal crimes related to a similar healthcare fraud scheme.   

In pleading guilty, both Bentley and Ajudua agreed to surrender their medical licenses.  Everyone convicted agreed to be excluded from further participation in the State Medicaid and federal Medicare programs as a provider of any type of goods or services.  

The Attorney General would like to thank the New York State Office of the Medicaid Inspector General (“OMIG”), the U.S. Department of Justice Medicare Strike Force, which operates from the US Attorney’s Office, Eastern District of New York; the United States Department of Health and Human Services, Office of the Inspector General (“HHS OIG”); the New York City Human Resources Administration, Medicaid Provider Investigations and Audit Unit, and HealthFirst for their assistance and cooperation in this investigation.  

Investigators Stanislav Tabakov and Thomas Dowd investigated the case with the assistance of Supervising Investigator Dominick DiGennaro and Deputy Chief Investigator Kenneth Morgan. Senior Auditor Investigator Lisandra Defex conducted the financial analysis with the assistance of MFCU New York City Regional Chief Auditor Investigator Thomasina Smith and Deputy Regional Chief Auditor Jonathan Romano.  Legal Assistant Nicholas Matthews assisted on the case.   

MFCU Senior Counsel Jonathan S. Reiner prosecuted the criminal case with the assistance of NYC Deputy Regional Director Twan V. Bounds and NYC Regional Director Christopher M. Shaw. Thomas O’Hanlon is the Chief of Criminal Investigations-Downstate. Senior Counsel Konrad F. Payne and Special Assistant Attorney General David Abrams litigated the civil lawsuit with the assistance of Civil Enforcement Chief Alee Scott. MFCU is led by Director Amy Held and Assistant Deputy Attorney General Paul Mahoney. The Division of Criminal Justice is led by Chief Deputy Attorney General José Maldonado.