FOR IMMEDIATE RELEASE April 22, 2004
For more information contact: Jeff Dorschner 303-454-0243

THE FBI ARRESTS SAUDI ARABIA CULTURAL MISSION EMPLOYEE AND
TWO OTHERS FOR DEFRAUDING SAUDI ARABIAN NATIONAL
GOVERNMENT IN HEALTH CARE FRAUD SCAM

FRAUD ALSO ALLEGEDLY INVOLVES SOME SAUDI STUDENTS
WHO RECEIVED KICKBACKS

DENVER - John W. Suthers, United States Attorney for the District of Colorado, and Phillip B.J. Reid, Special Agent in Charge of the Federal Bureau of Investigation's Denver Office, announced today that three people have been arrested for executing a scheme to defraud the Saudi Arabian National Government. VALIOLLAH RAOUFI, age 37, of Los Angeles, California, SYED ROKNEDIAN DANESHFAR, age 26, of Laguna Niguel, California, and FEDAA ZAQZOUQ, age 30, of Great Falls, Virginia were arrested today without incident. ZAQZOUQ is a contract employee of the Saudi Arabian Cultural Mission in Washington, DC responsible for the processing of medical claims. Authorities are seeking a fourth person implicated in the scheme.

According to the affidavit in support of the Criminal Complaints, the defendants implemented a scheme to defraud the Saudi Arabian government by submitting fraudulent healthcare claims on behalf of Saudi national college students to the Saudi Cultural Mission for payment.

The Saudi Arabian government operates a publicly and privately funded healthcare insurance plan. Students from Saudi Arabia studying in the United States direct their doctors to submit medical claims for processing directly to the Saudi Arabian Cultural Mission, a division of the Saudi Arabian's Ministry of Higher Education. The Cultural Mission, in turn, processes the claim, negotiates the cost and then makes final payment for the medical services provided.

Defendants RAOUFI and DANESHFAR allegedly opened five different post office boxes in the Metro Denver area, utilizing bogus medical center names, to receive payments for fictitious surgical procedures allegedly performed on Saudi national college students. The defendants opened mailbox addresses for the following made up healthcare entities: "North Denver Medical" located at an ACE Pack and Ship in Lakewood, Colorado, "Southeast Health Clinic" located at a Mail Boxes Etc. in Denver, Colorado, "Colorado Health Care Center" located at a Pack and Ship in Denver, Colorado, "Advance Medical Center" located at a Pak Mail Facility in Lakewood, Colorado, and "Colorado Healthcare Center" located at a UPS Store in Lakewood, Colorado. The defendants requested that each facility forward all mail to addresses in California. They also allegedly contracted with several answering services, at times using the name "Dr. Rufi" to receive calls on behalf of the bogus medical facilities.

According to the Affidavit, starting in April 2003 and continuing through August 2003 the defendants allegedly submitted invoices, medical reports, and other documentation to the Cultural Mission on behalf of real Saudi Arabian students to create the appearance that surgeries and other medical procedures were performed on students who are eligible to receive healthcare benefits. No such procedures were actually performed.

In many cases the defendants utilized the identities of real doctors in Colorado, who investigators determined were in no way participants in the scheme. The Cultural Mission then negotiated payment with the defendants believing they were dealing with professional medical facilities. Some Saudi Arabian national college students later received financial kickbacks for allowing the defendants to use their identities.
FBI investigators also traced payments from the three California defendants to FEDAA ZAQZOUQ, a medical claims processor for the Saudi Arabian Cultural Mission in Washington, DC, implicating her in the fraud. Investigators and prosecutors have determined that ZAQZOUQ does not have diplomatic immunity. The case is being prosecuted in Colorado because the payments for the bogus medical claims were mailed to the state and because calls for the defendants executing the scheme were placed to the state.

Investigators determined that the Saudi Arabian Cultural Mission experienced a substantial loss nationwide, mailing payments totaling approximately $335,000 to the addresses in Colorado alone.

"The defendants in this scheme preyed upon the good will of a foreign government committed to ensuring the health of their citizens studying in this country," United States Attorney John Suthers said. "This case demonstrates that the United States government is not the only victim when it comes to healthcare fraud. These types of cases must be aggressively prosecuted, and we must attempt to recover the proceeds of the illegal scheme on behalf of the victim whenever possible."

"I applaud the efforts of the many agents across the country who worked so diligently to pull this intricate case together. And as always, I appreciate the support provided to the FBI by Mr. Suthers and his staff," Special Agent in Charge Phillip B.J. Reid said.
Each defendant was charged with executing a scheme to defraud a health care benefit program in violation of Title 18, United States Code, Section 1347. If convicted, the defendants face up to ten years in prison and fines of up to $250,000.

The case was investigated by the Federal Bureau of Investigation and Internal Revenue Service, Criminal Investigations.

The case is being prosecuted by Assistant United States Attorney Michael Theis.
A Criminal Complaint is a probable cause charging document. Defendants accused of committing a crime have a right to be indicted by a federal grand jury.

The charges are only allegations, and the defendants are presumed innocent unless or until proven guilty.
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