New Charges in Insurance Fraud Scheme : Health: The ring operated a sophisticated operation comparable to drug cartels, prosecutors say.

Defendants in a billion-dollar health insurance fraud scheme not only defrauded taxpayers and insurance companies but ran a sophisticated money-laundering and racketeering operation comparable to a major drug cartel, authorities charged Monday.

Federal prosecutors in Los Angeles unsealed an indictment charging seven new defendants in the fraud case, bringing the total number to 12 and expanding charges to include 175 counts of mail fraud, money laundering, racketeering and other offenses.

Federal authorities last month had initially filed indictments against five defendants, including alleged ring leader Michael Smushkevich, 44, a Soviet citizen who used to live in Los Angeles. An attorney for Smushkevich, who is in federal custody without bail, declined to comment.

Operating in Southern California, the suspects allegedly laundered money obtained through fraudulent insurance claims in overseas bank accounts, set up multiple dummy companies and used mail drops much as organized drug syndicates do, according to Bill Landreth, an investigator for the Department of Defense, which received millions in fraudulent claims from the ring.

The fraud ring ran mobile diagnostic centers, solicited patients through phone canvassing promising free checkups and carried out unnecessary tests, officials charged. They allegedly billed their insurance companies an average of $8,000 a patient.

Blue Cross paid $14 million in claims and refused to pay $86 million more to operations allegedly run by Smushkevich and his brother, David. CHAMPUS, the Civilian Health and Medical Program of the Uniformed Services, paid $1 million of $29 million billed.

The indictment unsealed Monday wraps up more than five years of investigation by hundreds of agents from the U.S. Attorney’s Office, the U.S. Postal Service, the Department of Defense, the State Department and the Internal Revenue Service.

Charged in the indictment were Smushkevich, his brother and their wives, Alla Smushkevich and Tamara Smushkevich.

Also charged were: Adriana Tobena, a 42-year-old citizen of Argentina; Boris Ivaskov, a 41-year-old Soviet citizen; Arthur Lucero , 58, of Los Angeles; Michael Faiman, a 39-year-old Israeli citizen; Randolph P. Shipley, an attorney who lives in Palos Verdes Estates; Carolyn Vasquez, 26, of Upland; William O. Kupferschmidt, 48, a Rancho Palos Verdes doctor, and Ameer M. Dikshit, 55, (also known as Ameer M. Dixit) a physician from Laguna Niguel.

Bogich Jovovich, 43, a Yugoslavian national resident in Los Angeles, was not charged in this indictment after pleading guilty earlier this month to four counts of mail fraud and one count of conspiring to defraud insurers of $1 billion.

Michael Smushkevich, Dikshit, Ivaskov, Jovovich, Kupferschmidt and Vasquez were originally indicted last month.

If convicted on all counts, Michael Smushkevich faces up to 1,980 years in prison and more than $156 million in fines.