U.S. Attorney Preet Bharara announces charges against more than a dozen Russian diplomats and their spouses living in New York during a news conference Thursday, Dec. 5, 2013 in New York. The charges stem from the defendants' alleged involvement in a $1.5 million fraud of a U.S. government health program for the poor. (AP Photo/Jason DeCrow)
Thursday, December 05, 2013 7:36 pm
US: Russian diplomats charged; Russia objects
By LARRY NEUMEISTER and VLADIMIR ISACHENKOVAssociated Press
Deputy Foreign Minister Sergei Ryabkov made the remarks carried by Russia's state news agency, ITAR-Tass, after charges were announced in New York City against 49 current and former Russian diplomats and their wives.
He called the charges "no more than a cheap spin effort, no more than a desire to fulfill the order of Russophobic forces in the United States."
Ryabkov added: "We regret that attempt to stir up another conflict or dispute, particularly in view of the fact that Moscow and Washington recently have developed a good format of ties regarding big international issues. We wouldn't like to make such links, but in view of reaching some results in the sphere of settling major conflicts, some people in Washington needed to spoil the atmosphere. We can only assess it this way."
Ryabkov's comments came as a State Department spokeswoman in Washington seemed to downplay the announcement by U.S. Attorney Preet Bharara in Manhattan, saying the department was reviewing the just-unsealed charges and didn't believe charges against a "handful" of people would damage U.S.-Russia relations.
Bharara said 25 current and former diplomats and 24 spouses were criminally charged in federal court in Manhattan after they underreported incomes to qualify for Medicaid funds even as they spent tens of thousands of dollars on luxury vacations, concert tickets, fine clothing and helicopter rides.
"Diplomacy should be about extending hands, not picking pockets in the host country," Bharara told a news conference.
He called it "shameful and systemic corruption." No arrests were made and only 11 of the diplomats and their spouses remained in the United States. The complaint said Medicaid, a health care program for the poor, lost about $1.5 million in the scheme since 2004.
The case is unlikely to go to trial because the defendants have immunity, Bharara acknowledged.
Ryabkov said Russia rejects the accusations and believes the surveillance of diplomats that led to them contradicts international law and is illegal.
He said in remarks carried by Russia's state RIA Novosti news agency that the United States should have pursued its complaints through diplomatic channels.
"We have many complaints about U.S. diplomats in Moscow, but we aren't taking them into the public domain," Ryabkov said.
The complaint alleges that the defendants - current and former diplomats and their spouses at the Russian Mission to the United Nations, the Russian consulate and Russian trade offices - submitted fraudulent applications for medical benefits for pregnancies, births and care for young children.
"Being a diplomat does not give you the right to commit health care fraud," said George Venizelos, head of the FBI's New York office.
Marie Harf, deputy spokeswoman for the U.S. State Department, said at a daily Washington briefing that the charges should not affect relations with Russia.
"Quite frankly, there are too many important issues we have to work on together. The justice system will proceed in the way that it does here in the states, and we don't think it should impact our relationship," she said.
She also said: "I don't think I would probably draw a broad generalization about our relationship with Russia based on a handful of some current Russian officials and some former who are charged with an alleged crime. I think the relationship is much bigger and deeper and broader and more complicated than that."
Bharara said it was a case "we would be prosecuting and making arrests in, but for immunity." Still, he added, participation in crimes by diplomats generally leads to expulsion from a country.
In court papers, FBI agent Jeremy Robertson described an 18-month investigation, saying investigators had discovered a pattern of falsified applications.
He said 58 of the 63 births attributed to Russian diplomats and their spouses in New York City between 2004 and 2013 were funded through Medicaid, which is largely federally funded but includes money from state and local governments.
Pregnant women, no matter their immigration status, can get coverage under Medicaid, provided they meet other eligibility requirements, according to the New York Department of Health. Robertson wrote that the diplomats and their spouses generally underreported household income to an amount below the applicable Medicaid eligibility level, and some of them lied about the citizenship status of their children to obtain continuing health coverage for them.
Meanwhile, the diplomats and their spouses spent tens of thousands of dollars on vacations, fancy watches, expensive jewelry and designer clothing at luxury retail stores including Bloomingdale's, Tiffany & Co., Jimmy Choo, Swarovski and others, the court papers said.
The complaint said they also spent tens of thousands of dollars on electronic merchandise at Apple Inc. stores and elsewhere. Authorities said they also bought concert tickets, robotic cleaning devices and chartered helicopters.
Charges in the criminal complaint included conspiracy to commit health care fraud, conspiracy to steal government funds and make false statements relating to health care matters.
Associated Press writers Tom Hays and Edith Lederer in New York and Deb Riechmann in Washington contributed to this report. Isachenkov reported from Moscow.