WASHINGTON - A federal jury in Los Angeles convicted the owners and operators of a Los Angeles-area durable medical equipment company of Medicare fraud, Assistant Attorney General Lanny A. Breuer of the Criminal Division; U.S. Attorney for the Central District of California Thomas P. O'Brien; and Glenn R. Ferry, Special Agent-in-Charge for the Los Angeles Region of the Office of Inspector General for the Department of Health of Human Services announced today.

After a one-week trial in federal court in Los Angeles, the jury found Gevork Kartashyan, 45, guilty of conspiracy to commit health care fraud and health care fraud; and Eliza Shurabalyan, 42, guilty of health care fraud. U.S. District Judge Stephen V. Wilson of the Central District of Los Angeles scheduled sentencing for Oct. 5, 2009.

Shubaralyan and Kartashyan owned and operated CHH Medical Supply, a durable medical equipment (DME) supply company. Between January 2005 and June 2008, Shubaralyan and Kartashyan, through CHH Medical Supply, billed Medicare $949,859, and were paid $597,750. Virtually all of these bills were for medically unnecessary power wheelchairs and wheelchair accessories.
At trial, elderly Medicare beneficiaries testified about how they were recruited and taken to Los Angeles-area medical clinics. At the clinics, the beneficiaries turned over their Medicare numbers and other personal identifying information. Some were promised vitamins, diabetic shoes, and other items that they never received. The clinics were in the business of generating fraudulent power wheelchair prescriptions that could be sold to DME company owners who would bill Medicare for the wheelchairs. Many of the beneficiaries did not know they were getting a wheelchair until it was delivered to them by CHH Medical Supply. All of the beneficiaries testified that they did not need or use the wheelchair.

Five physicians testified that they never authorized or approved the power wheelchair prescriptions written under their names, often by physician's assistants. Three of these physicians testified that they never even worked at the clinics listed on phony prescription pads.

A government witness, who recently pleaded guilty to health care fraud in connection with one of the clinics at issue in this case, testified that Kartashyan would regularly come into the office where he and others worked in order to pick up power wheelchair prescriptions that he had purchased. Upon delivery, Kartashyan would then generate phony forms stating that the beneficiaries' homes were appropriate for the use of a power wheelchair, even though no home assessment was done.

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