Chicago-Area Family Sentenced in Benefit Scheme; Union Plans among Those Fleeced

To find the most flagrant cases of fraud against unions, health plans are among the first places to look. A trio of family members in north suburban Chicago has joined the parade of guilty third-party administrators. On Monday, April 24, a chiropractor, his brother and their father were sentenced in U.S. District Court for the Northern District of Illinois for their roles in a six-year scam that generated nearly $29 million in phony billings costing insurance carriers over $10.8 million. Union plans were among the victims. The main defendants, Dr. Vladimir Gordin Jr., Alexsander Gordin and Vladimir Gordin Sr., operators of a clinic in Wheeling, Ill., received prison sentences, respectively, of seven years, two years and two-and-a half years. They and two other persons had pleaded guilty following a multi-agency probe.

The Gordin Medical Center was a chiropractic clinic in Wheeling, a fast-growing community located along the northern edge of Cook County, Ill. As manual workers are especially susceptible to back problems, many of their clients are insurance companies who provide coverage for union-sponsored health and welfare plans in the Chicago area. The Gordin family saw an opportunity to get rich – the wrong way. According to federal prosecutors, the Gordins used their business to falsely bill insurers for nonexistent or unnecessary medical services and then create fake medical records to cover their tracks. Not every patient was an innocent victim. In a number of cases, patients were aware of, and took part in, the overbilling scheme. The Justice Department explained: “In some cases, patients knew of the overbilling and were incentivized to participate by having their deductibles met at no cost to them, or by sharing in a portion of the overbilling proceeds via checks provided to them by Gordin Jr. and Gordin Sr.”

At the heart of the scam was a Vernon Hills, Ill.-based contractor, Ultrasound Mobil Service Ltd. From sometime in 2006 until November 2012, the Gordins submitted fraudulent bills totaling $28,775,000, triggering a loss of $10,847,000 among five Chicago-area insurance carriers. The operator of the ultrasound service, Michelle Kobran, falsely billed insurance companies for procedures based on referrals from Vladimir Gordin Jr. and then paid kickbacks to the Gordins from the proceeds. A fifth participant in the scam was the Gordins’ office manager, Alina Levit. Her role was to create sign-in sheets claiming certain services had been provided when in fact they had not been. Kobran pleaded guilty last year to health care fraud and was sentenced late this April to nine months in prison; Levit pleaded guilty last year to misdemeanor embezzlement and was sentenced late this April to 18 months of probation, including 90 days of intermittent incarceration on weekends.

The convictions and sentences were the result of a lengthy investigation by the FBI, the U.S. Postal Inspection Service, and the U.S. Labor Department’s Office of Inspector General. Prosecutors are satisfied that justice has been done. Assistant U.S. Attorneys Heather McShain and Sarah Streiker had argued in the government’s sentencing memorandum: “As a result of the scheme, the Gordins created a medical center whose focus, for both the chiropractors and the employees, was not patient care. Rather, GMC [Gordin Medical Center] was a front for false billing; patient care was an afterthought.” As for affected union members, their health plan contributions have been higher than anticipated.