California doctor convicted in $45M Medicare fraud that funded lavish trips, $12K antique crossbow

LOS ANGELES - A federal jury has convicted a Glendale doctor of orchestrating a $45 million Medicare fraud scheme involving fictitious Botox injections. 

Dr. Violetta Mailyan was found guilty of fabricating diagnoses, billing for treatments while on luxury vacations, and altering medical records to obstruct federal investigators, according to the U.S. Department of Justice's Office of Public Affairs. 

What we know:

Mailyan, 45, owned and operated Healthy Way Medical Center, a Glendale clinic purporting to offer beauty and cosmetic services. 

While Medicare reimburses providers for Botox injections to treat documented chronic migraines, evidence presented at trial showed Mailyan billed for thousands of injections that were either purely cosmetic or never provided at all.

Data analytics revealed Mailyan received more than $24 million over a four-year period for Botox treatments—six times the amount paid to the next highest group of providers, who were all neurologists. 

Trial evidence showed she billed Medicare for injections while she was vacationing in Cabo, Maui, Las Vegas, Pennsylvania, and New York. 

In one instance, she billed for a beneficiary who was incarcerated in federal prison. 

She also billed for over $19 million in treatments supposedly administered on days her clinic was closed, and backdated claims to dates before patients had even contacted her clinic, according to court documents.

To fund a lavish lifestyle, Mailyan used the proceeds to purchase luxury collectible goods, including a $12,000 17th-century crossbow and a $3,000 painting. 

Following her conviction, the jury determined that several assets were proceeds of fraud and subject to forfeiture, including a Tesla Model X, a Tesla Cybertruck, $251,124 across multiple bank accounts, brokerage accounts valued at $7,312,037, and four properties in Surfside and Glendale with a combined estimated equity of $7,343,636.

Tesla Cybertruck seized from Mailyan. / DOJ

Mailyan was convicted of nine counts of wire fraud and three counts of obstruction of a criminal investigation of a health care offense.

What we don't know:

It's unclear how many individual patients were falsely diagnosed or had their medical records manipulated during the multi-year operation, or how long it will take federal authorities to fully liquidate the seized real estate and luxury assets.

What they're saying:

"Violetta Mailyan falsely diagnosed patients, fraudulently billed for Botox injections while she was actually on lavish vacations, and tried to trick federal agents with fake records," said Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division. "The Fraud Division’s data-driven approach will shine a light on fraud schemes across the country, ensuring that no doctor can engage in these types of brazen schemes to rob Medicare."

"Let this conviction serve as a warning: anyone who leverages their medical authority to defraud Medicare will be caught and held accountable," said Acting Deputy Inspector General for Investigations Scott J. Lampert of the Health and Human Services Office of Inspector General (HHS‑OIG). "This defendant’s actions were a blatant betrayal of patients and the public trust. HHS‑OIG will stay relentless in protecting federal health care programs from those who seek to exploit them."

"Physicians who defraud and manipulate federally funded health care programs to line their own pockets do so at the expense of American taxpayers and those who are in legitimate need of medical procedures," said Assistant Director in Charge Patrick Grandy of the FBI’s Los Angeles Field Office. "The FBI is gratified that the jury convicted Dr. Mailyan based on the evidence, which uncovered the largest Botox fraud scheme in the United States, to include brazenly billing for someone who was incarcerated. Furthermore, the FBI is committed to pursuing physicians and others in the healthcare system who fleece Medicare and, in doing so, drive up premiums and co-payments for law-abiding citizens."

What's next:

Mailyan remains in federal custody awaiting her sentencing hearing on September 10.

She faces a maximum statutory penalty of 20 years in prison for each count of wire fraud and up to 5 years in prison for each count of obstruction.