Three members of an Eastern European organized crime group have been sentenced to federal prison for operating a $20 million Medicare fraud operation that exploited elderly immigrants in San Jose and Southern California. 
Ringleader Konstantin Grigoryan, a Ukrainian immigrant who was once a Soviet army colonel, was sentenced to four years and eight months in prison after pleading guilty to conspiracy and filing a false tax return. 

Grigoryan operated a string of health clinics and medical testing services in Southern California, which recruited elderly patients with the promise of free check-ups. The group then used the unknowing patients' Medicare accounts to submit bills for a variety of medical procedures that were unnecessary or never performed. 

The fraudulent activities were first reported in 2003 by the Mercury News and its affiliate, Viet Mercury, after the newspapers learned that hundreds of elderly Vietnamese immigrants had been lured with promises of free bus rides to clinics here and in Southern California. 

Law enforcement officials say that such frauds are a growing problem in the state, with several different groups competing to exploit unwitting senior citizens. Another group of clinic operators is awaiting sentence after pleading guilty on similar charges in a separate case in San Jose federal court. 
In the Southern California case, Grigoryan's wife and son-in-law were also convicted of participating in the fraud. 

U.S. District Judge Stephen Wilson of Los Angeles sentenced Mayya Grigoryan, 54, to three years in prison and Eduard Gershelis, 34, to four years and three months. Gershelis was sentenced Monday and the Grigoryans were sentenced earlier this month; two more defendants will be sentenced later this summer. 

The defendants will forfeit more than $5.5 million in assets as partial restitution for the fraud, said Assistant U.S. Attorney Bruce Searby, who said Grigoryan used a Panamanian corporation and several Swiss bank accounts to hide profits from the scheme. 

The size and scope of the fraud was noted in a 2005 report by state law enforcement officials. They described the Grigoryan group as an example of "Eurasian Organized Crime" because it was carried out by immigrants from the former Soviet Union, who used sophisticated methods and a network of fellow immigrants as co-conspirators.