The United States has charged 49 current and former Russian diplomats and their wives over a "shameful" USD 1.5 million fraud, accusing them of stealing medical benefits in New York.
The alleged scam took place between 2004 and August 2013 when the suspects were based at the Russian mission to the United Nations, the Russian consulate and the Russian trade mission.
They are accused of lying about their true income to claim the benefits while splashing out tens of thousands of dollars in designer shops such as Tiffany & Co, Jimmy Choo and Prada.
The defendants are accused of scheming to obtain almost USD 500,000 in benefits from a program earmarked for low-income American families, when their children were born in the United States.
Approximately USD 1.5 million in benefits was illegally obtained by the Russians and dozens of other co-conspirators not named in the complaint.
Manhattan US attorney Preet Bharara denounced the "shameful and systemic corruption" among Russian diplomats in New York who had scammed a health care system designed to help Americans in need.
"Diplomacy should be about extending hands, not picking pockets in the host country," he said.
The federally funded Medicaid program grants prenatal care to low-income families, regardless of the nationality of the parents on the grounds that the child will be born a US citizen.
The newborn child is entitled to benefits until its first birthday. Diplomats and their families are not ordinarily entitled to benefits under the program unless in an emergency.
The defendants' true income was often hundreds, if not thousands of dollars a month more what was falsely reported to Medicaid, prosecutors said.
Russian diplomats do not pay US tax. They live mostly in homes paid for by the Russian government and the Russian government has historically paid the medical expenses of its staff.
Of the 49 defendants, 11 are still in the United States.
Five work at the Russian mission to the United Nations, five are their spouses and one is employed at the Russian embassy in Washington DC after serving at the consulate in New York.
The luxury items the diplomats are accused of spending vast sums of money on include luxury cruises, watches, shoes, and jewelry.
