A couple of days ago, thirty-six Soviet immigrants were arrested in New York for plotting to bilk health-insurance companies out of a quarter of a billion dollars. The plot, according to a story in the Times, involved ten doctors, nine clinics, and a hundred and five corporations: “The ring sought reimbursement for so many excessive and unnecessary medical treatments that it had to set up three separate billing processing companies just to handle the paperwork.” What’s remarkable here is just how unremarkable the story is, coming, as it does, out of Brighton Beach.
Brighton Beach is famous not only for its gauche cabarets and Russian delicacies and grumbling, highly-inflected Russian of the provinces, but for its improbable concentration of insurance fraud. As the Times puts it, “Brighton Beach has one of the highest rates of health care fraud in the nation, according to federal statistics. In fact, an analysis of data from the Centers for Medicare and Medicaid Services, the federal agency that regulates those two programs, shows that more health care providers in the Brighton Beach ZIP code are currently barred from the programs for malfeasance than in almost any other ZIP code in the United States.”
The article then goes into an intricate dance, dipping into a “Russian mind-set” that might draw Soviet immigrants to fraud—that’s from an unnamed law-enforcement official—and the to-be-sure-not-all-Soviet-immigrants-involved-in-health-care-are-criminals reminder:
Still, some experts in law enforcement and academia believe that the cumbersome Soviet system, with its thicket of strictures that governed almost every aspect of life, effectively helped to groom a generation of post-Soviet criminals in the United States.
“Obviously, particularly in Soviet times, but even nowadays, Russia still has a large amount of red tape and bureaucratic systems that are parasitic and hostile, almost designed to make you pay bribes,” said Prof. Mark Galeotti, an expert on Russian organized crime at New York University. “So from cradle to grave, they have been used to that.”
It’s not so much that “systems” in Russia are designed to make you pay bribes, it’s that they’re often designed on the back of an envelope—that is, not designed or thought-through at all. The effect—sometimes intended, usually not—is to make de facto criminals out of basically everybody. In contemporary Russia, you’ll meet many pristinely-educated, well-traveled, white-collar business people who will tell you, absolutely sincerely, that they’d prefer to have “white”—that is, clean—businesses, but that the laws are so contradictory that they would go bust abiding by them all. These people are not guys in tracksuits named Fat Misha. They wear nice suits and speak foreign languages and have great table manners. Their wives like diamond stud earrings and subtle lip gloss. They’re contractors and distributors and partners with big Western firms. And, for the most part, they’re not crooks by intent but because there are simply very few ways to make money legally.
Many, if not most, of the guys rounded up in this week’s operation, I assume, came to the U.S. before making money was even a legal option for them. They came from the Soviet Union, where commerce was illegal. Back there, back then, they could have been black marketeers and speculators. Or they could have been drones working boring Soviet jobs, making salaries that could buy them nothing because the economy was too inefficient—and state spending priorities were too rocket-oriented—to give them anything to buy. So everything, from clothes to canned goods to shampoo, had to be gotten by hook, crook, personal connection, or by buying them off a black marketeer. So it was not that “you’re looked upon as a patsy” if you were not “scamming the government,” as that unnamed officer told the Times, it’s that you’d die of hunger if you expected to get your food just by walking into a store with some money. (Plus, there was probably a line out the door and down the block.)
“These people deserve all the opprobrium in the world, but context is important. These are traumatized people, taking actions for which they remain fully responsible, but not because they’re evil—because you, too, might quite possibly act that way if you’d spent a lifetime living in the nightmare place where they lived,” Boris Fishman, a former fact-checker at The New Yorker who’s finishing a novel about a failed journalist who starts forging Holocaust-restitution claims, told me. (Boris is also a fellow Soviet immigrant.) “Even in these cynical souls it goes back to their inability to imagine a system where you get enough by acting fairly.”
The other thing about the “Russian mind-set” is that it goes back to pre-Soviet times, too. There’s a Russian saying, born of a history full of hard rulers and stupid laws spinning in distant corners of a very big and hard-to-regulate space: “The severity of the law is mitigated by its lack of enforcement.” So whereas someone of the “American mind-set” expects to be caught for breaking the law, someone of the “Russian mind-set” doesn’t. That’s a gross oversimplification, but it gets you close to the cultural context.
I was seven when my family came over from the Soviet Union. My parents largely avoided—and sneered at—the immigrant milieus like those of Brighton Beach. They were educated Muscovites; they did not party at Russian restaurants. They took us, their children, to the opera and the ballet. But being poor immigrants, and ballet tickets being ballet tickets, we often found ourselves sitting in the nosebleed sections only to scamper down to the parterre when the lights went out. (These shows were full of other Soviet immigrants, and so you’d find yourself clawing for velvet seats in the dark with someone just like you.) If you can do it and no one will catch you—hey, it’s dark!—why not? Though I should say that the greatest obstacle to moving down to the more expensive seats was the vehement resistance of my annoyingly law-abiding little sister—also a Soviet immigrant.
A Fraud Ring and the “Russian Mindset” [TNY]