Organized crime's new target: Medicare and Medicaid

By Allan Chernoff and Sheila Steffen
CNN

(CNN) - Organized crime gangs are exploiting a new target for illegal profit: Medicare and Medicaid.

Experienced in running drug, prostitution and gambling rings, crime groups of various ethnicities and nationalities are learning it's safer and potentially more profitable to file fraudulent claims with the federal Medicare program and state-run Medicaid plans.

"They're hitting us and hitting us hard," said Timothy Menke, head of investigations for the Office of Inspector General at the Department of Health and Human Services. "Organized crime involvement in health care fraud is widespread."

Los Angeles, California, is among the hot spots for health care fraud, where Russian, Armenian and Nigerian gangs have been caught by federal agents.

Recent cases include crime boss Konstantin Grigoryan, a former Soviet army colonel who pled guilty to taking $20 million from Medicare.  Karapet "Doc" Khacheryan, boss of a Eurasian crime gang, was recently convicted with five lieutenants of stealing doctor identities in a $2 million scam.