Federal prosecutors in Brooklyn have now charged 11 people in one of the largest Medicare fraud busts in history, including the owner of a local business.
CBS News New York first reported on the man and a slew of connected Medicare fraud complaints last year.
Brooklyn business collects taxpayer dollars through alleged Medicare fraud
In February 2024, CBS News New York investigative reporter Tim McNicholas went looking for the owner of G&I Ortho Supply in Gravesend. Dozens of Better Business Bureau complaints revealed G&I was collecting taxpayer dollars for catheters under the names of Medicare members who never requested them.
The search led McNicholas to Staten Island, where one man said he’d recently sold the company to another man who was allegedly using a fake Texas ID. However, prosecutors said the name the buyer used was real: Kevin Valdhans.
A second man — Jonathan Vaz, of Fort Lauderdale — said Valdhans also bought his company, but didn’t remove him from their billing system after the sale. Vaz said at the time, he saw that Valdhans had billed about $7 million worth of catheters in just one week.
Suspects received $41 million from Medicare, investigators say
A federal indictment unsealed Thursday says Valdhans was part of a criminal organization based in Eastern Europe that bought more than 30 legitimate companies, then used them for Medicare fraud.
Prosecutors say the group’s leader was based in “Russia and elsewhere.” Eight of the people charged are Estonian citizens, one is a United States citizen, and Valdhans is from the Czech Republic.
The indictment accuses the group of “stealing the identities and personal identifying information of more than 1 million Americans.”
Investigators say the group submitted $10 billion worth of bogus Medicare claims and actually received $41 million from Medicare, plus $900 million from Medicare Supplemental Insurers.
Prosecutors say the operation lasted until September.
Similar fraud complaints at Queens-based business
A Queens business has also been connected to Medicare fraud complaints, but that medical supply shop is not mentioned in the indictment.
Some of the claims connected to that business were submitted as recently as this month.
As far as we know, there is no direct connection between that business and the Russia-based organization, but it is a similar pattern in the sense that a man said he recently sold the Queens business and then started learning of fraud complaints.
