More than forty Armenian-Americans were charged in the largest Medicare fraud scheme ever carried out by a single group Wednesday, according to an announcement by federal authorities.

The 44-person group managed to defraud Medicare for $35 million in reimbursements before the criminal charges and arrests were made.

"With 118 phantom clinics and over $100 million in bogus billings, this group of international gangsters allegedly ran a veritable fraud franchise," Preet Bharara, the U.S. attorney in Manhattan, said in prepared remarks. "As charged, they stole taxpayer dollars earmarked for the elderly and infirm and got away with it, until now."

The story of the massive criminal syndicate unfolds in the indictments filed in the U.S. District Court, Southern District of New York.

Many of the individuals facing racketeering indictments were a part of the Mirzoyan-Terdjanian Organization, "an international organized crime group with leadership based in Los Angeles and New York City," according to the indictment.

Largely run by two leaders based in the two coastal cities, for at least the past four years, the group worked together to set up approximately 118 fraudulent Medicare providers, or "phantom clinics," in about 25 states nationwide. Using thousands of stolen patient and doctor identities, the group billed Medicare for phony treatments that never took place - more than $100 million worth.

"The diabolical beauty of the Medicare fraud scheme - from the criminals' standpoint - was that it was completely notional," Janice Fedarcyk, assistant director in charge of the New York F.B.I. office, said in prepared remarks. "There were no real medical clinics behind the fraudulent billings, just stolen doctors' identities. There were no runners or colluding patients showing up at clinics for unneeded or 'upcoded' treatments, just stolen patient identities. The whole doctor-patient interaction was a mirage."

The fraud scheme also brought Armen Kazarian in the hands of federal authorities. Prosecutors identified Kazarian as a "Vor," a Russian term that means "thief-in-law," referring to a member of a notorious association of Russian and ex-Soviet Union criminals.

Kazarian is the first "Vor" to be charged with a racketeering crime in the United States, according to prosecutors.

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