September 24, 2002

PRESS RELEASE

EIGHT OPERATORS OF MEDICAL MANAGEMENT COMPANIES CHARGED WITH CONSPIRING TO HIDE $24.5 MILLION

ROSLYNN R. MAUSKOPF, United States Attorney for the Eastern District of New York, and PAUL L. MACHALEK, Special Agent-in-Charge, Internal Revenue Service - Criminal Investigation, New York, announced today the arrests of eight defendants involved in the operation of medical management companies in Brooklyn and the Bronx on charges of conspiring to hide approximately $24.5 million in company income by using a series of shell companies, Long Island bank accounts, and structured cash transactions to convert corporate receipts into virtually untraceable cash.

The eight arrested today were identified in the complaint unsealed this morning at the United States Courthouse in Central Islip, New York, as YURI BOBRITSKY, MIKHAIL DEKHTYAR, also known as "Michael," RAFAIL SVECHARNAYA, also known as "Rafail Svecharny" and "Ralph," ALEXANDER PROSKUROVSKY, GALA KAPROV, also known as "Galina," ILLONA BOBRITSKY, DMITRY BEDNY, also known as "David," and RITA BEDNY. Since 1993, the defendants owned or operated a series of medical management companies, including Royal Imaging Services, Inc. ("Royal"), located at 61 Avenue U, Brooklyn and 432 Avenue U, Brooklyn, New York; Tremont Management, Inc. ("Tremont"), located at 1111 East Tremont Avenue, Bronx, New York; S.O.I. Management ("SOI"), located at 1080 East Gunhill Road, Bronx, New York; and IDS Medical Management ("IDS"), located at 2034 Rockaway Parkway, Brooklyn, New York, and later on Gerritsen Avenue, Brooklyn, New York.

According to the complaint, the eight defendants carried out their scheme by transferring since 1993 approximately $24.5 million in purported management fees received by Royal, Tremont, SOI, and IDS to a series of shell company bank accounts set up solely to convert traceable funds to cash. The shell companies were established by associates of the eight defendants arrested today. The associates deposited the checks received from the defendants into Long Island bank accounts, and then either structured cash withdrawals from those accounts in a manner designed to evade the filing of currency transaction reports ("CTRs"), (1) or falsified such CTRs to disguise the true ownership and source of the funds. The complaint charges that after converting the deposited funds to cash, the associates returned the cash to the defendants at various offices and public locations in Brooklyn and the Bronx. In exchange, the defendants paid these associates so-called "transaction fees" ranging between 8 and 12 percent of the total amount of the converted funds.

The system of related bank accounts and money transfers used by the defendants is commonly referred to as a "daisy chain" and involves a series of transfers of funds to shell, or "burn," companies which typically have no assets and conduct no legitimate business. These transfers are often disguised as payments of expenses and are accompanied by fictitious invoices. The burn companies then return the deposited funds to the sources of those funds, in the form of cash.

According to the complaint, the defendants' associates often structured the cash withdrawals from their burn company accounts in multiple amounts under $10,000 in order to evade the filing of CTRs. In some instances, the defendants and their associates withdrew sums of cash over $10,000, falsely claiming that the withdrawals were necessary to fund the payroll of identified employees of the burn companies, when in fact, the burn companies had no employees or payroll expenses. These fraudulent representations caused the banks to file false CTRs with respect to the cash withdrawals.

The defendants were charged with conspiracy to structure financial transactions and to cause the filing of false CTRs. If convicted, each defendant faces a maximum sentence of five years in prison, up to $49 million in fines, and possible restitution. (2)

In announcing the today's arrests, United States Attorney ROSLYNN R. MAUSKOPF stated, "The well-worn adage 'follow the money' lies at the heart of the laws requiring the truthful reporting of currency transactions involving large sums of cash. The proper accounting of such transactions is vital to the government's ability to expose potentially fraudulent schemes, disrupt money launderers and collect taxes on income. This case demonstrates the government's commitment to exposing and prosecuting fraudulent schemes, no matter how elaborately constructed, and to ensure that all are held responsible for obeying the laws governing the proper disclosure of financial transactions."

Special Agent-in-Charge PAUL L. MACHALEK stated: "Internal Revenue Service-Criminal Investigation is always eager to lend its financial expertise to investigations of complex schemes like the one uncovered today. Such schemes undermine the United States tax system by allowing individuals and organizations to conceal income that is subject to income tax. Today's legal actions should serve notice to unscrupulous operators in the lucrative medical management industry that such schemes will be investigated and prosecuted."

The defendants' preliminary appearances are scheduled to take place this afternoon before United States Magistrate Judge William D. Wall at the U. S. Courthouse in Central Islip, New York.

The government's case is being prosecuted by Assistant United States Attorneys James Miskiewicz and Suzanne Jaffe Bloom, and was investigated by Special Agents of the Internal Revenue Service Criminal Investigation and Randy Cox, Criminal Investigator with the United States Attorney's Office for the Eastern District of New York

The Defendants
Yuri Bobritsky
Brooklyn, New York
DOB 9/9/54

Mikhail Dekhtyar
East Northport, New York
DOB 7/24/46

Rita Bedny
Brooklyn, New York
DOB 08/25/54

Illona Bobritsky
Brooklyn, New York
DOB 3/19/77

Dmitry Bedny
Brooklyn, New York
DOB 12/6/73

Rafail Svecharnaya
North Brunswick, New Jersey
DOB 5/5/51

Alexander Proskurovsky
Brooklyn, New York
DOB 9/9/54

Gala Kaprov
Brooklyn, New York
DOB 9/18/60

1. Federal law requires the filing of CTRs for any cash transaction over $10,000 carried out at a financial institution. CTRs are filed by banks with the Internal Revenue Service ("IRS") on forms that require, among other things, identification of the individual or organization for whom the transaction was completed. CTRs assist the United States in determining the disposition of large currency transactions for purposes of criminal, tax and regulatory investigations. The knowing and intentional structuring of transactions into amounts under $10,000 to avoid the filing of a CTR, and the filing of false information on a CTR are federal crimes.

2. The charges contained in the complaint are merely allegations and the defendants are presumed innocent unless and until proven guilty.