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From Citigroup to jail cell: Financeer pleads guilty for siphoning $22 million

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A former Citigroup vice president is facing 30 years in jail, now that he’s pled guilty to embezzling more than $22 million from his company.

Defendant Gary Foster, 35, entered his guilty plea during an appearance in Brooklyn Federal Court on Sept. 6, throwing himself on the mercy of the court.

Prosecutors contend that Foster played a shell game with the international financial conglomerate’s money between 2003 and 2011. He was charged with transferring money from several Citigroup accounts to a cash account, then wiring that money to his personal bank account with another bank.

He then made false accounting entries to make it appear that the money he was siphoning off was for company-approved expenditures.

Investigators later learned that Foster used $16 million of the money he took to buy real estate in Brooklyn, Manhattan and New Jersey. He also bought an assortment of luxury cars, the indictment noted. Because the father of two was legally blind, he actually hired chauffeurs to drive him around in the luxury cars, sources told the New York Post.

As part of the plea deal, Foster will forfeit all of the cars and the land he purchased with his ill-gotten gains, explained United States Attorney Loretta Lynch.

“The defendant violated his employer’s trust and stole a stunning amount of money over an extended period of time to finance his personal lifestyle,” Lynch said in a statement.

FBI Assistant Director-in-charge Janice Fedarcyk said that Foster “exploited his position as a trusted insider.”

“He embezzled millions of dollars and tried to conceal the theft for as long as possible,” Fedarcyk noted.

Medicare scam probe widens

Add three more names to the growing list of suspects in last year’s widespread Medicare scam, in which elderly Russian and Eastern European residents were given kickbacks to allow doctors to bill Medicare in their name — then told them to keep silent with Cold War-era posters that said, in no uncertain terms: “Snitches get stitches.”

According to a new indictment unsealed in Brooklyn Federal Court on Sept. 8, Dr. Jesse A. Stoff, 55, the former medical director of the Solstice Wellness Center in the Rockaways, and Dr. Billy N. Geris, 53, a former physician at Solstice, were each charged with conspiracy to commit health care fraud. In addition, Maria Nakhbo, 72, a Medicare beneficiary who visited the Solstice Wellness Center, was indicted on one count of conspiracy to pay and receive health care kickbacks and one count of making false statements.

The three suspects will join the 94 people taken into custody on July 16, 2010, when federal investigators broke apart a widespread Medicare fraud ring that stretched from Bay Medical at the corner of Bay Parkway and Bath Avenue to as far as Detroit, Baton Rouge and Miami.

The suspects, which included doctors, office administrators and willing patients, managed to siphon more than $200 million from taxpayer coffers with their fraudulent Medicare bills, explained Brooklyn U.S. District Attorney Loretta Lynch.

Very few knew about the probe until federal investigators raided Bay Medical, armed with cardboard boxes they used to carry out reams of files and other incriminating evidence. Several computers were also seized.

Federal prosecutors said that, much like Dr. Stoff, Bay Medical’s Dr. Gustave Drivas and Dr. Jonathan Wahl allegedly recruited several patients to go along with their scam. Once a senior agreed, he or she was taken into a back room marked “private.”

Once they stepped inside, patients were greeted with the poster of the harried peasant woman with a finger to her lips.

The poster, which is in Cyrillic, read, “Don’t Gossip. Be on the lookout. In these days the walls talk. It’s not far between gossiping and betrayal.”

Prosecutors said patients were paid anything from $50 to $100 for allowing doctors to bill Medicare in their name — a mere pittance when considering the thousands of dollars they raked in for billing Medicare for services never rendered.

Investigators charge that Drivas and Wahl allegedly gave out approximately $500,000 to patients in the private room, which was given the nickname “the kickback room,” within a six-week period between April and June, 2010 — but were personally responsible for siphoning $72 million of the $251 million bilked from Medicare for “physical therapy and other medical services that were medically unnecessary or were not provided to beneficiaries at all,” according to federal prosecutors.

After being tipped to the scam, investigators managed to get a surveillance camera in the kickback room, catching some of the transactions on video.

That’s how they learned some patients were more willing than others to participate.

One woman, identified as 82-year-old Valentina Mushinskaya, reportedly allowed Drivas and Wahl to make 3,744 Medicare claims for her since 2004. When the ring was finally broken, federal investigators took Mushinskaya into custody, along with the two doctors and three center employees and 18 other “professional patients,” charging them all with multiple counts of grand larceny.

A lawyer for Wahl and Drivas denied the charges.

Prosecutors said that Best Equipment Medical Supplies on W. First Street between Kings Highway and Quentin Road also played a role in the scam.

Trials against the 94 suspects are expected to begin in October.

Updated 11:48 am, January 16, 2019
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