Armenian gangsters accused of huge Medicare fraud

A VAST network of Armenian gangsters and their associates used phantom health care clinics and other means to try to cheat the government medical insurance programme Medicare of $163 million (£103m), the largest fraud by one criminal enterprise in its history.

Federal prosecutors in New York and elsewhere charged 73 people. Most of the defendants were captured during raids in New York and Los Angeles, but there also were arrests in New Mexico, Georgia and Ohio. The scheme's scope and sophistication "puts the traditional Mafia to shame," US attorney Preet Bharara said at a Manhattan news conference. "They ran a veritable fraud franchise."

The operation was under the protection of an Armenian crime boss, known as a "vor", prosecutors said. The reputed boss, Armen Kazarian, was in custody in Los Angeles.

Mr Bharara said it was the first time a vor - "the rough equivalent of a traditional godfather" - had been charged in a US fraud case. Kazarian, 46, of California, and two alleged ringleaders - Davit Mirzoyan, 34, also of California, and Robert Terdjanian, 35, of New York - were named in an indictment in Manhattan charging conspiracy, bank fraud, money laundering and identity theft.

Authorities began the investigation after personal information on 2,900 Medicare patients in New York state was reported stolen.

The defendants had stolen the identities of doctors and set up 118 phantom clinics in 25 states, authorities said. The names were used to submit fake bills for care that was never given, they said.