It was a clear afternoon last April when Mikhaylo Goldenberg entered a Citibank branch at 250 Broadway. Slim and unobtrusive, he wore a suit and moved in an unhurried way. He had the tattoo of a ring around one finger. In a voice ragged from smoking unfiltered cigarettes, he told a clerk that he wanted to withdraw $34,000 from his account. Goldenberg had opened the account less than a month earlier under the name of a woman he identified as his girlfriend, Diane Montella. He had presented a signed and notarized form, in which shed given him power of attorney over her finances. A known Citibank customer, a Russian attorney, had accompanied him and vouched for his identity. Within 21 days, he had deposited $67,598.71 in checks made out to Montella, a Pennsylvania doctor. They had all come from Medicare, the federal health-insurance program for the elderly, as reimbursement for services rendered. They had been sent to Montellas medical-X-ray company, Seliko International Group, in Brighton Beach, Brooklyn, on Avenue U.
As the clerk processed Goldenbergs request, bank employees noticed that the man in front of them, cool and sympathetic as he seemed, resembled the John Doe on a flyer circulated by Citibank security. It featured the passport photo of a Russian émigré with hooded eyes and sunken cheeks. His real name was unknown, but he used four aliases. The Office of the Inspector General at the federal Health and Human Services agency suspected him of perpetrating $27 million worth of health-care fraud and had been seeking him for more than a year.
In January, John Doe had walked away from $33,000 in a Charles Schwab account that hed opened just six days earlier using Medicare checks made out to a radiologist named Karin Eckertt Shinn. After the Social Security number he supplied proved to be false, a manager from the brokerage house phoned him up to ask a few questions: Did he have a medical license number? Did he know what the acronym AMA stood for? John Doe quickly hung up and vanished into the tight-lipped world of criminal émigrés.
Since then, John Doe had been trying to collect over half a million dollars deposited in various bank accounts around the city, as HHS agents, police officers, and bank officials watched and waited. John Ryan, a New York City police detective, was canvassing the Russian-émigré community of Brighton Beach, Brooklyn, looking for a suspect who used the alias Yakov Dubinsky. As it turned out, the telephone number John Doe gave to Charles Schwab rang at the Brighton Beach home of a Yakov Dubinsky. But it was not the right man. The suspect had melted into the bustle of storefront culture there.
While his tracks have led investigators from a Brighton Beach Laundromat to a Florida health clinic and may yet dead-end in the Siberian woods, John Doe was finally caught in Manhattan, just blocks from the HHS regional office at 26 Federal Plaza. The Citibank clerk had signaled a security officer, who in turn called Detective Ryan. Ryan then radioed a police officer, who made it to the bank and cuffed the suspect, who was waiting for the cash.
John Doe turned out to be 52-year-old Yuri Bizayko, a Russian émigré with a twelve-year history of counterfeiting and forgery in the former Soviet Union. He was charged with grand larceny (and marijuana possession) and pleaded guilty. But he refused to answer questions and cooperate with investigators (and, through his attorney, declined to speak to New York). On December 18, he was sentenced in federal court to two and a half years in prison, to be served concurrently with a two-to-four year sentence imposed by a state court. But his conviction and recent sentencing have not settled the bigger question of who Bizayko really is -- and whether he was giving orders or merely following them.
On April 2, before his aliases were peeled away, Bizayko gave a statement to detectives in which he claimed to be Goldenberg. He said that he had become acquainted with a Russian named Volodya, who gave him Medicare checks and directed him to open bank accounts in exchange for a cut of the money. He said he had intended to take the $34,000 from the Citibank account and use it to gamble in Atlantic City.
Bruno Varano, assistant regional inspector general for HHS, is convinced that Bizayko is a foot soldier in a confederation of émigré criminals who are being bankrolled by Russian businessmen. These are individual Russian groups who are organizing in such a way that they are able to perpetrate health-care fraud that alone they would not have the finances or muscle to pull over, says Varano, who is trained as an accountant and carries a 9-mm. Sig Sauer. They are known to be very physical, with a lot of direct intimidation that makes the Wild West look Girl Scoutish. This theory of grand conspiracy has always been attractive to law enforcement. The reality, however, may be even more ominous, a case of not organized but disorganized crime. In this scenario, Bizayko is little more than a random felon, one who learned that Medicare was an easy mark and who was able, almost effortlessly, to steal millions from the American government.
Bizaykos story and those of countless other scam artists will be brought before the United States Senate when it hears testimony, now scheduled for January 29, about the growing cost of health-care fraud. According to a 1997 General Accounting Office report, fraud eats up anywhere from 3 to 10 percent of Americas $1 trillion in health-care spending -- or as much as $100 billion (a staggering amount of criminal activity when you consider that annual narcotics sales in the U.S. are estimated to be only $65 billion). And it could be even higher: A new HHS study pegs health-care fraud at 14 percent.
There are people who say if we can solve the health-care-fraud problem, says Lewis Schiliro, FBI special agent in charge of New York Citys criminal division, we can pay off the national debt.
To law-enforcement and government officials, Bizayko represents the possibility that larger and more sophisticated crime syndicates are getting involved in health-care fraud. In the eighties, it was garden-variety doctors and medical-service providers inflating bills, says Bill Mahon, executive director of the National Health Care Anti-Fraud Association, which provides training and information to law enforcement and private and government insurers. Now the most sinister development is the move of professional criminal entrepreneurs onto the health-care-fraud landscape.