Earlier this month, a federal judge in Philadelphia sentenced Aleksandr N. Zagorodny, 40, to 78 months in prison for a health care fraud scheme involving MedEx Ambulance, Inc. He was the former president of the business. His brother, Sergey Zagorodny, 36, was sentenced to 5 years in prison for his involvement in the health care fraud scheme.
Previously MedEx Ambulance was ordered to be dissolved after it had lost its Medicare authority.
In an unusual move, both brothers pleaded guilty to all counts in a 41-count indictment including health care fraud, making false statements, wire fraud, and conspiracy. They had no plea agreement – we can only speculate they thought such a bold move of accepting responsibility for their actions might get them some leniency. It didn’t work.
MedEx Ambulance was found to be transporting patients by ambulance and billing Medicare. Unfortunately for the company, the brothers knew many of the patients were ambulatory and didn’t require expensive ambulance transportation to get to and from medical appointments. Prosecutors say that the men bilked Medicare out of more than $3.4 million.
Aleksandr and Sergey Zagorodny faced a maximum sentence of 370 years of imprisonment. The court also ordered restitution to Medicare in the amount of $3,418,358.81. The Court further ordered the forfeiture of four ambulances as well as bank accounts worth over $40,000. The brothers and their wives also pledged to sell their family homes and apply the money towards restitution.
The case was investigated by the Federal Bureau of Investigation and the U.S. Department of Health and Human Services.
Whistleblowers and Health Care Fraud
No word on how this health care fraud was originally discovered but in most cases, it is the actions of an alert whistleblower. Frequently a worker tired of seeing fraud – or worried about getting implicated in the fraud – steps forward and becomes a whistleblower.
Healthcare workers with inside, original source information about fraud involving a government program can file a lawsuit under the federal False Claims Act and collect up to 30% of whatever the government recovers. Because the government can collect treble damages, the amount of the awards can be significant. We have seen health care fraud cases involving nursing homes pay awards of $50,000 while in some pharmacy cases the awards are in the tens of millions of dollars.
The FBI says health care fraud costs Americans $80 billion per year! Much of that fraud involves Medicare, Medicaid and state funded programs.
About the author. Brian Mahany is a lawyer representing whistleblowers. From Medicare fraud to government contractor fraud, his team of false claims act lawyers are ready to help. Brian’s firm has the largest pending false claims act case anywhere in the U.S. against a lender – HUD’s $2.4 billion case against Allied Home Mortgage. He and his team help whistleblowers stop fraud and collect the largest awards possible. Brian can be reached at or by telephone at (414) 704-6731 (direct). He also publishes a daily blog, Due Diligence, that has hundreds of text searchable posts about tax law, fraud and whistleblower stories.
Posted by Brian Mahany, Esq.