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U.S. Charges Dozens of Russian Diplomats and Spouses With Medicaid Fraud U.S. Says Diplomats Defrauded Medicaid
(about 7 hours later)
Federal law enforcement authorities have charged nearly 50 past or present Russian diplomats and their spouses in a $1.5 million Medicaid fraud scheme, an unusual twist in what has become a familiar criminal story line in New York. The contours of the alleged insurance fraud seemed unusual enough: The participants, men and women, were accused of improperly seeking Medicaid benefits for pregnancies, births and postnatal care.
An F.B.I. investigation revealed “the systemic fraudulent submission of falsified applications for Medicaid benefits” by the diplomats and their spouses, according to a criminal complaint unsealed on Thursday in United States District Court in Manhattan. That the defendants were Russian was, perhaps, not altogether unusual, given the number of recent prosecutions for similar insurance schemes perpetrated in New York by immigrants from the former Soviet Union.
The diplomats and their spouses obtained the benefits for pregnancies, births and first-year-of-life medical needs, generally applying at the same New York hospital, which was not identified, the complaint says. But these were no ordinary Russians. They were diplomats posted to New York City, and their wives, accused of fraudulently applying for Medicaid benefits over the past nine years. Prosecutors characterized the scheme as an audacious swindle of the federal health benefits program for the needy, orchestrated by officials in the Russian Consulate in New York and its mission to the United Nations.
“Diplomacy should be about extending hands, not picking pockets in the host country,” said Preet Bharara, the United States attorney for the Southern District of New York, who, along with George Venizelos, who heads the New York office of the F.B.I., detailed the charges at a news conference on Thursday. “Diplomacy should be about extending hands, not picking pockets in the host country,” said Preet Bharara, the United States attorney in Manhattan, whose office announced on Thursday that it had charged 49 past or present Russian diplomats and their spouses in the $1.5 million Medicaid fraud case.
Unlike other news briefings by Mr. Bharara, this one was not followed by the appearances in court of the defendants; because those charged are diplomats and their spouses, they have diplomatic immunity. “The charges expose shameful and systemic corruption among Russian diplomats in New York,” Mr. Bharara said.
But Mr. Bharara noted that the State Department could seek a waiver of immunity from the Russian government to allow a prosecution to go forward. A criminal complaint unsealed in Federal District Court said that in addition to the defendants, 11 of whom still live in the United States, dozens of other conspirators not named had received illegally obtained benefits.
Russian officials were not immediately available for comment. Mr. Bharara’s news briefing, unlike others in the past, was not followed by an appearance of the defendants in court. Mr. Bharara said his office had been advised that the defendants all had diplomatic immunity, so none had been arrested.
Of the 63 births to Russian diplomats and their spouses in New York City between 2004 and 2013, 58 of those families, or 92 percent, were paid for by Medicaid benefits, the complaint says. He said the State Department could seek a waiver of immunity from the Russian government to allow a prosecution to go forward. If no waiver was given, Mr. Bharara said, the State Department’s policy was to “require departure of that individual from the United States.”
The complaint cites an 18-month investigation of the defendants’ Medicaid applications that revealed “general patterns of misrepresentations, which allowed them to qualify for Medicaid.” In Moscow, the Foreign Ministry declined a request for comment, but the deputy foreign minister, Sergei Ryabkov, told news organizations that he was surprised by the charges. He did not address their substance, but complained that the criminal complaint had been made public without private notifications through diplomatic channels.
For example, they frequently underreported their household income at an amount below the applicable Medicaid eligibility level in order to receive the benefits, the complaint charges. “We have many claims against American diplomats in Moscow,” Mr. Ryabkov said in remarks reported by the official RIA Novosti news agency, “but we don’t air them out in public. There are dozens of situations where we can make a complaint against them.”
At the same time, they were spending tens of thousands of dollars on luxury goods and vacations, including the purchase of jewelry, watches, clothes and shoes at Jimmy Choo, Tiffany & Company and Bloomingdale’s, according to the complaint. In Washington, a State Department spokeswoman, Marie Harf, said at a briefing that American officials were reviewing the charges but were not yet in a position to speak about what might happen.
The diplomats and spouses charged in the case currently or formerly worked at such offices as the Russian Mission to the United Nations and the Russian Consulate. As for the case itself, she added: “We don’t think this should affect our bilateral relationship with Russia. Quite frankly, there are too many important issues we have to work on together.”
For years, insurance fraud schemes in New York and elsewhere have often been dominated by immigrants from the former Soviet Union. Brighton Beach, Brooklyn, the center of New York City’s Russian-speaking immigrant population, has one of the highest rates of health care fraud in the nation, according to federal statistics. Of the 63 babies born to Russian diplomats and their spouses in New York City between 2004 and 2013, 58 births — 92 percent — were in families that received Medicaid benefits, the complaint says.
An analysis of data from the Centers for Medicare and Medicaid Services, the federal agency that regulates those two programs, shows that more health care providers in the Brighton Beach ZIP code are currently barred from the programs for malfeasance than in almost any other ZIP code in the United States. The complaint says an 18-month investigation of the 49 defendants’ applications revealed “general patterns of misrepresentations, which allowed them to qualify for Medicaid.”
For example, the defendants frequently underreported their household income at an amount below the applicable Medicaid eligibility level, the complaint charges. Each diplomat listed in the complaint, said George Venizelos, head of the New York office of the Federal Bureau of Investigation, had “submitted an employer verification form from the Russian government misstating their income in an effort to qualify for benefits.”
The complaint cites one couple, Mikhail Kuleshov, a second secretary at the United Nations mission, and his wife, Anna Kuleshova, who had a baby in the United States. They falsely reported in their Medicaid application that no one in the household had any income, yet Mr. Kuleshov last year received about $60,000 from the Russian government, the complaint says.
The couple, who live in the Bronx in housing paid for by the Russian government, received almost $21,000 in Medicaid benefits that they were not entitled to, according to the complaint.
While many of the diplomats and spouses were cheating the Medicaid program, the complaint says, they also were spending tens of thousands of dollars on luxury goods and vacations, including jewelry, watches, clothes and shoes, at Jimmy Choo, Tiffany & Company and Bloomingdale’s.
The defendants currently work or formerly worked in New York at places like the Russian Mission to the United Nations and the Russian Consulate. Some had diplomatic titles like first secretary, second secretary, attaché and counselor.
A spokesman for the mission, on East 67th Street, said the case was “under examination” and declined further comment.
For years, insurance fraud schemes in New York and elsewhere have often been dominated by immigrants from the former Soviet Union. Brighton Beach, Brooklyn, the center of New York City’s Russian-speaking immigrant population, has one of the highest rates of health care fraud in the nation, according to recent federal statistics.
Mr. Bharara said that the investigation was continuing, and that any other country with diplomats engaging in such fraud should be on notice that “it will be exposed and the conduct will be charged criminally.”

Steven Lee Myers contributed reporting from Moscow, and Alex Vadukul from New York.