USA: Allegations of Russian Diplomats’ Health-Care Fraud Raises Political Questions

The US court in Manhattan has accused 49 Russian diplomats and their spouses of fraudulently receiving a total of US$1.5 million in health care benefits designated for the poor and disabled, reports the Wall Street Journal.

US prosecutors claim that the diplomats vastly underreported their incomes to receive health insurance benefits from the state- and federal-funded Medicaid program. The diplomats are accused of submitting falsified applications to cover the medical costs of pregnancy, birth, and childcare.

The Wall Street Journal reports that the complaint came after an investigation of the 2004 to 2013 insurance benefits received by the Russian diplomats, whose spending habits were, according to prosecutors, “inconsistent with the grossly underreported incomes." The diplomats and their spouses allegedly enjoyed luxurious vacations, chartered a helicopter, and shopped at expensive stores such as Tiffany & Co., Boomingdale’s, and Jimmy Choo. 

George Venizelos, the assistant director in charge of the New York FBI office, said "Being a diplomat does not give you the right to commit health care fraud” reports CNN. He added, “The scam exploited the weakness in the Medicaid system and the charges exposed shameful and systemic corruption among the Russian diplomats in New York."

Of the 49 charged diplomats, 11 remain in the United States. Their diplomatic immunity prevents them from being prosecuted in the United States, where they currently or formerly worked for the Russian Mission to the United Nations, the Russian Federation Consulate, or the New York office of the Trade Representative of the Russian Federation, reports the Wall Street Journal.

According to the Moscow Times, some Russian diplomats say the charges are a political provocation. One unidentified diplomat said foreign diplomats were told by the US that they could claim Medicaid benefits. Another Russian diplomat said that the US did not contact the Russian diplomatic mission first, as is customary, and instead went directly to court.

Yury Rogulyov, director of the Franklin D. Roosevelt Foundation for United States Studies at Moscow State University, noted that the charges came from a U.S. prosecutor who is on a Russian blacklist due to his previous involvement in the extradition of two convicted Russian arms and drug dealers.  According to the Moscow Times, the Russian blacklist is, in turn, seen as a political response to the US Magnitsky Act, which bars individuals believed to be responsible for the death of  lawyer Sergei Magnitsky from entering the United States. 

A US State Department spokeswoman said, "We don't think this should affect our bilateral relationship with Russia" reports the Wall Street Journal.

She did not comment on whether or not the United States would ask Russia to waive diplomatic immunity for the accused diplomats. She did say, however, that US officials did contact their diplomatic counterparts regarding the allegations.