Ohio man pleads guilty to laundering $3.4 million in massive health care fraud scheme
A Northeast Ohio man pleaded guilty to laundering approximately $3.4 million in health care fraud proceeds for a transnational criminal organization behind what federal prosecutors have described as the largest health care fraud case ever prosecuted by the Justice Department.
Eldar Zarbavel, 45, of Pepper Pike, pleaded guilty to one count of money laundering for his role in the multibillion-dollar scheme uncovered through Operation Gold Rush, according to the Justice Department.
Federal prosecutors said the organization, which operated from Russia and elsewhere, targeted Medicare and private health insurers and used the U.S. banking system to move proceeds from fraudulent claims overseas.
Zarbavel’s role included opening bank accounts in Northeast Ohio for Royce Medical Supply LLC, a Florida-based durable medical equipment company used in the scheme.
Between July 2022 and July 2024, the organization submitted approximately $1.42 billion in false and fraudulent claims to Medicare and other health insurers through Royce Medical Supply, according to court documents. The Centers for Medicare & Medicaid Services suspended reimbursement for nearly all claims, though some were still paid.
Prosecutors said that between June and July 2024, Zarbavel acted at the direction of members of the organization to facilitate the deposit, transfer and withdrawal of approximately $3.4 million in fraud proceeds.
The organization allegedly used nominee owners and false corporate and sale documents to conceal who actually controlled fraudulent medical equipment companies and their bank accounts.
Prosecutors said the payments initially appeared legitimate because they came from Medicare and established private insurers. The organization then allegedly moved the money through shell companies and banks overseas.
Zarbavel is the 16th person convicted in connection with Operation Gold Rush. Federal authorities have charged 35 people in the investigation to date.
The federal prosecution comes amid increased scrutiny of health care fraud in Ohio. Republican Gov. Mike DeWine recently signed Senate Bill 315, which expands fraud prevention and detection requirements within the state’s Medicaid program and gives the Ohio Attorney General’s Office additional investigatory authority in Medicaid-related cases.
Zarbavel’s case involves alleged fraud targeting Medicare and private insurers rather than Ohio’s Medicaid program.
Zarbavel is scheduled to be sentenced Dec. 16 and faces up to 20 years in federal prison. A federal judge will determine his sentence after considering federal sentencing guidelines and other statutory factors.
The FBI and the U.S. Department of Health and Human Services Office of Inspector General are investigating the case.
