A former healthcare clinic owner, and the central figure in a massive $70 million Medicare and Medicaid fraud ring has been sentenced to five years in prison and will pay over $8 million in restitution, the Department of Justice has announced.
Victor Lipkin, who owned a Brooklyn clinic, pleaded guilty to conspiracy to commit wire fraud, mail fraud and healthcare fraud and was sentenced on Friday in Manhattan federal court. The scheme involved the clinic Lipkin owned as well as two other clinics in Queens.
Eight other defendants have also pleaded guilty to similar charges in connection with the fraud.
According to the DOJ, the fraud ring operated from 2005 to November 2014. The defendants operated three clinics and recruited "financially disadvantaged and homeless people" who were covered by Medicare or Medicaid to act as patients and undergo medically unnecessary tests in exchange for cash kickbacks. The tests included sleep and stress tests and were often performed by unlicensed personnel, which is a violation of New York State law. Insurers were then billed for the tests.
"The Runners often recruited such individuals from soup kitchens and local welfare offices, and coached them on what to say on various medical forms in order to make it falsely appear that the medical tests to which the defendants intended to subject them were medically necessary," the DOJ said in a statement.
Lipkin and fellow defendant Vadim Zubkov recruited and paid a particular licensed physician to pose as the "nominal owner and/or physician under whose name the three clinics would bill Medicare, Medicaid and private insurance providers." Lipkin's clinic was located on Avenue V in Brooklyn, New York. The other two facilities were in Queens on Hillside Avenue and Elmhurst Avenue. In reality, Lipkin and Zubkov were the "beneficial owners" of the clinics. However, they hid their actual positions through the doctor posing as the owner and also by laundering the clinics' earnings through shell companies they owned and controlled. None of the defendants who owned or operated the clinics were licensed physicians, which is required by law.
In all, they fraudulently billed over $70 million to Medicaid and Medicare and were paid over $25 million in reimbursements.