Armenian organized crime grows more complex

GLENDALE, Calif. (AP) - Endeavor Diagnostics billed itself as a thriving medical laboratory that performed more than $1 million of work for Medicare patients.

When two FBI agents went to inspect it, they found an empty San Fernando Valley office with only a desk and a fax machine. There were no workers, no patients and no biological samples.

Behind the door of the facade were signs tying the operation to a sprawling network of phantom enterprises allegedly set up by Armenian mobsters to try to defraud Medicare of $163 million for services never provided.

Dozens of arrests around the country Wednesday highlighted a criminal demographic rarely seen, but one that officials say is rooted in California and growing in reach and sophistication.

Few criminal groups can match the sophistication of Armenian scammers, who developed an uncanny savvy for probing weaknesses in government systems and were hailed as heroes when they exploited their Soviet republic homeland, authorities said. They have been known for devising complex white collar schemes such as credit card fraud, identity theft and mortgage fraud.

Indictments released Wednesday in Los Angeles, New York and elsewhere show how various cells, largely working on their own but often sharing techniques, set up fraudulent medical businesses using stolen physician identities.

After becoming licensed Medicare providers and submitting claims, the fake office billed the government, which would pay money to fraudulent bank accounts. Many claims were bogus but sometimes criminals would provide a small service then submit an inflated bill.