Seven Members of Moscow-Based Criminal Organization Plead Guilty in Over $1.7 Billion International Telemedicine Scheme

In federal court in Brooklyn, Hafizullah Ebady pleaded guilty to health care fraud conspiracy. The proceeding was held before United States District Judge William F. Kuntz, II. Ebady is the seventh defendant to plead guilty in connection with a sprawling international health care fraud and money laundering scheme. Ebady’s co-defendants Joshua Manuel Alegria, David Gary Bishoff, Brycen Kay Millett, Dela Saidazim, Anthony Santamaria and Hershel Tsikman previously pleaded guilty. An eighth co-defendant and the leader of the organization, Brian Sutton, a U.S. citizen residing in Russia, remains at large.

The defendants participated in an international scheme to acquire pharmacies across the United States with pre-existing relationships with private health insurance companies. Using those pharmacies, in conjunction with call centers to induce individuals to accept unnecessary medications and a network of recruited physicians, the defendants generated more than $1.7 billion in fraudulent prescriptions purportedly filled by the scheme pharmacies. The charges against Sutton and others were announced on November 7, 2023.

Breon Peace, United States Attorney for the Eastern District of New York, and James E. Dennehy, Assistant Director in Charge, Federal Bureau of Investigation, New York Field Office (FBI), announced the guilty pleas.

“Using aliases, shell companies and straw owners, moving their operations overseas, and laundering millions of dollars through foreign countries, the defendants conducted a sophisticated, multi-faceted scheme, employing scores in call centers and remote billing teams to line their pockets to the tune of more than a billion dollars,” stated United States Attorney Peace. “Health care fraud victimizes American businesses and drives up the cost of care for all. Let these convictions serve as a message: we will work tirelessly to investigate and prosecute those who exploit American health care plans no matter where in the world they operate.”

Mr. Peace expressed his appreciation to the Port Authority of New York and New Jersey, Office of Inspector General, for its work on the case.

As alleged, between 2017 and 2022, Sutton, a U.S. citizen residing in Russia, led his co-defendants in carrying out an international scheme to bill private insurers for over $1.7 billion in fraudulent prescriptions. At Sutton’s direction, the co-conspirators oversaw call centers initially based in Utah, but later operated from Russia and other foreign nations. Call center employees telephoned beneficiaries enrolled in private insurers’ health care plans and offered prescription medications at little to no cost to the beneficiaries and without any medical exam to determine whether the medications were medically necessary. The defendants also recruited doctors purportedly to review prescriptions by nurse practitioners and physician’s assistants after telemedicine visits. Contrary to what the recruited doctors were told, in many cases there were no telemedicine visits between the beneficiaries and any medical professionals. The co-conspirators generated fraudulent prescriptions under the physicians’ names and National Provider Identifier (NPI) numbers. Despite the prescriptions, many beneficiaries never received the medications.

To conceal their involvement, the defendants operated under multiple aliases, funneled hundreds of millions of dollars through pass-through shell companies and straw owners, used end-to-end encrypted communications and moved operations overseas. Specifically, the defendants purchased and operated dozens of existing brick-and-mortar pharmacies through straw owners including in Brooklyn, Staten Island, Manhattan, Long Island, New Jersey, Pennsylvania, Texas, Michigan and Alabama. The co-conspirators also laundered millions of dollars in fraudulent proceeds from overseas through pass-through shell companies that they used to purchase the scheme pharmacies and conceal the defendants’ involvement.

After acquiring the brick-and-mortar pharmacies, the co-conspirators oversaw the installation of pharmacy management software that allowed for the remote submission of reimbursement requests by the scheme pharmacies to private insurers; they also trained and supervised a team of “billers” that remotely submitted hundreds of thousands of reimbursement requests.

Under Sutton’s direction, the defendants played various roles in the scheme, including as follows:

Alegria oversaw development of custom software and forwarded fraudulent prescriptions to licensed physicians for approval;
Bishoff coordinated logistics for the operations of multiple scheme pharmacies;
Ebady coordinated the purchase and directed the day-to-day operations of multiple scheme pharmacies;
Millett oversaw call centers in Utah, Russia and elsewhere overseas;
Saidazim recruited licensed physicians and acted as Sutton’s personal assistant;
Santamaria trained and managed a team of billers to input data and electronically submit fraudulent requests for reimbursement to insurers; and
Tsikman coordinated the laundering of fraud proceeds through straw owners and shell entities.
Ultimately, the co-conspirators submitted over $1.7 billion in reimbursement requests for over 50 pharmacies. Private insurers paid over $500 million as a result of the fraudulent billing.

When sentenced, the defendants face the following sentences:

Ebady faces a maximum sentence of 10 years’ imprisonment as well as restitution of more than $195 million and forfeiture of over $1.8 million;
Alegria faces a maximum sentence of 30 years;
Bishoff faces a maximum sentence of 10 years as well as forfeiture of $8 million;
Millett faces a maximum sentence of 30 years as well as forfeiture of over $2.3 million;
Santamaria faces a maximum sentence of 10 years as well as restitution of more than $520 million and $3.2 million in forfeiture;
Tsikman faces a maximum sentence of 10 years; and
Saidazim was sentenced to time served.
The charges pending against Sutton in the superseding indictment are merely allegations and he is presumed innocent unless and until proven guilty.

In July 2022, Mr. Peace was selected as the Chairperson of the White Collar Fraud subcommittee for the Attorney General’s Advisory Committee (AGAC). As the leader of the subcommittee, Mr. Peace plays a key role in making recommendations to the AGAC to facilitate the prevention, investigation and prosecution of various financially motivated, non-violent crimes including health care fraud charges, such as the crimes that the defendants committed.

The government’s case is being handled by the Office’s Business and Securities Fraud Section. Assistant United States Attorneys John Vagelatos, Jessica K. Weigel, Tara B. McGrath and Jonathan P. Lax are in charge of the prosecution, with assistance from Paralegal Specialists Madison Bates and Asher Martin-Rosenthal. Claire S. Kedeshian of the Office’s Asset Recovery Section is handling forfeiture matters.

The Defendant:

HAFIZULLAH EBADY (also known as “Hafiz Ebady”)
Age: 45
Parsippany, New Jersey

Co-Conspirators Who Previously Pleaded Guilty (Awaiting Sentencing):

JOSHUA MANUEL ALEGRIA (also known as “Jboy,” “Jaxon Asher” and “Turk Malloy”)
Age: 32
Woodland Hills, California

DAVID GARY BISHOFF (also known as “Bobby Fischer”)
Age: 39
Saint George, Utah

BRYCEN KAY MILLETT (also known as “Brett Johnson” and “Tommy Wilkinson”)
Age: 33
Saint George, Utah

ANTHONY SANTAMARIA (also known as “Big Boy,” “Wade Watts,” “Pablo Rodriguez,” “Ryan Rusty” and “Bruce Peter”)
Age: 31
North Hollywood, California

DELA SAIDAZIM (also known as “Delila,” “Gina Payne” and “Olivia Rothstein”)
Age: 34
Moscow, Russia

HERSHEL TSIKMAN (also known as “Andrew Milner,” “Andrew M.,” “Linus Caldwell,” “Adam Schneider,” “Jonathan Martin” and “H”)
Age: 30
Studio City, California

Co-Conspirator Who Remains At Large:

BRIAN MICHAEL SUTTON (also known as “Mike Summers,” “Mike Miller” and “Ryan White”)
Age: 31
Moscow, Russia

E.D.N.Y. Docket No. 21-CR-564 (S-3) (WFK)