East Hampton Doctor Pleads Guilty in Medicaid Fraud Case

An East Hampton doctor has admitted to being part of a trio that submitted $8 million in fraudulent Medicaid bills, New York State Attorney General Letitia James announced on Friday. 

Dr. Bernard Bentley, 61, together with Tea Kaganovich, 47, and Ramazi Mitaishvili, 58, Brooklyn residents who owned corporations involved in the scheme, billed Medicaid for unnecessary diagnostic testing services, some of which were never performed, the attorney general's office said. 

Dr. Bentley pleaded guilty to first and third-degree grand larceny charges in New York County Supreme Court. While his sentence has not been determined yet, he has agreed to pay $2.5 million in restitution as part of a civil settlement. The attorney general's office said the money will come from the sale of his house in East Hampton, two Tesla cars, and the contents of six bank and brokerage accounts.

The total restitution collected in the case, totaling $27.9 million dollars, will be paid to the New York State Medicaid program. 

As part of his guilty plea, Dr. Bentley agreed to surrender his medical license. According to a biography found online, he is listed as a diagnostic radiology specialist in East Hampton, Brooklyn, and Flushing, Queens, who has been practicing for 36 years. It is not clear, however, if he ever practiced in East Hampton. The East Hampton address listed appears to be his residence. 

Ms. Kaganovich and Mr. Mitaishvili were each convicted on charges of first-degree grand larceny. Sophisticated Imaging, Inc., and East Coast Diagnostic, Inc., owned by Ms. Kaganovich, East West Management, Inc., owned by Mr. Mitaishvili, and Bentley Medical P.L.L.C., a company owned by Dr. Bentley, also each pleaded guilty to first-degree grand larceny.

Ms. Kaganovich and Mr. Mitaishvili are expected to be sentenced to one and a half to four and a half years in state prison, which they will serve concurrent to a federal sentence that they will receive at a later date in a similar health care fraud scheme being prosecuted in federal court. 

“These individuals preyed on unsuspecting patients and stole government funds to line their own pockets,” Attorney General Letitia James said in a statement. “New Yorkers put their trust and health in the hands of medical professionals and providers, and we expect them to fulfill their basic duty to provide real and sound care. Medicaid fraud is a serious crime, and we will take action against anyone who seeks to cheat our system or our patients.”

In a separate agreement, Ms. Kaganovich and Mr. Mitaishvili have agreed to pay $18 million in restitution. 

The trio admitted that individually and through their corporations they were part of a scheme to put Medicaid recipients through "a battery of diagnostic tests that were not medically necessary and were fraudulently referred," the attorney general's statement said.

Ms. Kaganovich and Mr. Mitaishvili, with Dr. Bentley's help, then submitted reimbursement claims to the Medicaid program, including to Medicaid-funded managed care organizations, based on "fraudulent referrals for services that were either not provided or not medically necessary," the statement said. 

The charges brought against them were part of multi-year investigation by the attorney general's Medicaid Fraud Unit into the fraudulent activity of a medical mill, Multi-Specialty. "Medical mills are purported medical clinics that solicit Medicaid recipients with promises of a nominal cash kickback, usually ranging between $20 and $50, in exchange for the recipient agreeing to submit to a medical evaluation and testing," the attorney general's office explained. "Soliciting Medicaid recipients by offering to pay them to accept medical services paid by Medicaid is unlawful under state and federal law."

The investigation involved undercover operations and the execution of search warrants at Multi-Specialty locations in Manhattan and in the Bronx.

Investigators found that Ms. Kaganovich and Mr. Mitaishvili helped create a scheme in which "street recruiters" solicited Medicaid recipients for Multi-Specialty for treatment and testing and then made the recipients get a series of unnecessary diagnostic procedures. Dr. Bentley, referred to by the attorney general's office as a complicit physician, billed Medicaid and Medicaid-funded managed care organizations for those services. 

Azu Ajudua, a previously licensed physician who owned Multi-Specialty, signed referral forms for the diagnostic services performed by Ms. Kaganovich’s and Mr. Mitaishvili’s technicians. Mr. Ajudua and his corporation, AAA Medical P.C., has previously pleaded guilty to second and third-degree grand larceny. He admitted that he signed referral forms without ever seeing patients and that he signed blank referral forms, the statement said. He has not yet been sentenced.  

Another man, Zheng Dong, who was working as a physician at one of the Multi-Specialty clinics but was not actually licensed, "provided a facade of legitimacy," the attorney general's office said. Mr. Dong also previously pleaded guilty to unauthorized practice of a profession, a felony. He admitted that he forwarded Mr. Ajudua's previously signed blank referral forms to the diagnostic technicians, the A.G.'s office said.

"To maximize billing, Ajudua allowed the unlicensed 'doctors,' including Dong, to use his name and medical license to refer patients, including MFCU’s undercover investigators, for diagnostic testing from whichever technician was present at Multi-Specialty that day without regard to whether the ordered testing was medically necessary," the statement said. "Accepted medical practice requires that supplemental diagnostic testing only be rendered upon the order of a referring provider and that the referring provider have a legitimate medical need to order such testing."

Between Jan. 1, 2014, and Oct. 31, 2017, Dr. Bentley received more than $16 million dollars in reimbursement from Medicaid and HealthFirst, a Medicaid-funded managed care organization, the attorney general's office said. More than $5.5 million was for unnecessary diagnostic services ordered by Mr. Ajudua.

Dr. Bentley, through his corporation, Bentley Medical P.L.L.C., transferred more than $13 million dollars of this money to Ms. Kaganovich and Mr. Mitaishvili. Through their corporations, they paid illegal kickbacks to cause the referral of patients for diagnostic testing regardless of medical need.