Healthcare Fraud Scheme Resulting in Prison Sentence for New York Resident
A New York resident, Elnar Zarbailov, has been sentenced to 37 months in prison for laundering approximately $1.5 million tied to an expansive healthcare fraud scheme. Zarbailov, a dual citizen of the U.S. and Azerbaijan, was part of a transnational operation that targeted Medicare and private insurance companies. This case represents one of the largest healthcare frauds identified through the Department of Justice's Operation Gold Rush.
Documents reveal that the organized group, with ties to Russia, exploited the U.S. financial system to deposit illicit insurance reimbursement checks. These fraudulent transactions involved healthcare funds obtained under false pretenses, initially appearing legitimate. The organization bypassed regulatory compliance requirements at multiple financial institutions, occasionally working with insiders to facilitate these illicit activities.
The operation involved creating fake documentation for individuals not legally present in the U.S. This false documentation was used to open financial accounts under the guise of owning sham durable medical equipment companies. This allowed the group to conceal ownership and launder Medicare reimbursements, subsequently transferring these funds to offshore accounts and shell companies.
Zarbailov played a critical role by depositing fraudulent proceeds from several implicated DME companies into various accounts, including international ones. He was apprehended at John F. Kennedy International Airport while attempting to leave for Azerbaijan. After pleading guilty to conspiracy to commit money laundering, Zarbailov was ordered to forfeit $1,457,898 in addition to serving his prison sentence.
The case was announced by Assistant Attorney General Colin M. McDonald of the DOJ’s Fraud Division, with support from officials including the Department of Health and Human Services Office of the Inspector General (HHS-OIG) and the FBI. Homeland Security Investigations and the El Dorado Task Force also assisted during the arrest phase, underscoring the multi-agency effort involved.
The DOJ continues its commitment to combating fraud through the Health Care Fraud Strike Force Program. This initiative has charged over 6,200 individuals with defrauding federal health care programs and insurers of more than $45 billion since 2007. The Centers for Medicare & Medicaid Services, along with the HHS-OIG, are actively working to ensure providers engaged in fraudulent activities are held accountable. More information on these efforts can be accessed via the DOJ's healthcare fraud unit website.