The rise and fall of a Soviet surgeon who came to America, made millions — and lost it all

Dr. Vasso Godiali came to America for a better life 30 years ago and got it — though it wasn't easy.

And it didn't end well.

His success story started in the now-fractured Soviet Union, where he was born, raised and educated before fleeing his war-torn country of Georgia to come to the United States to pursue his career as a vascular surgeon.

Along the way, he was suspected of being a spy.

And when he reached the United States, he couldn't use his doctor skills. Rather, he worked in restaurants and mowed lawns through the years it took to earn his U.S. medical credentials.

His first job was washing dishes at Denny's.

But eventually he made it. He became a millionaire surgeon.

And then lost it all.

'Godiali’s fraud schemes were massive'

In U.S. District Court this month, Godiali, 60, of Bay City, Michigan, was sentenced to 6½ years in prison for stealing millions from the government and a private insurer in a scheme that involved billing for procedures he never performed.

Prosecutors pushed for a nine-year prison sentence. Godiala, who last year pleaded guilty to one count of health care fraud and admitted he bilked the government out of millions, asked for probation.

U.S. District Judge Thomas Ludington gave him 80 months, and ordered him to pay $19.5 million in restitution — the combined amount he stole from Medicare, Medicaid and Blue Cross Blue Shield. Additionally, Godiali agreed to pay the U.S. up to $43 million to resolve related civil allegations.

"Godiali’s fraud schemes were massive," Assistant U.S. Attorney Craig Wininger argued in court documents. "He lied thousands of times to steal millions of dollars from a public health system that can’t afford it. By the time he was done, nearly every bill with Godiali’s name on it was filled with fraud."

And it wasn’t just the bills that were fraudulent, the federal prosecutor stressed. Godiali also included descriptions of procedures he did not perform in his operative reports to justify his bills, he added.

"Worse, he fabricated an entirely fictional procedure — the removal of a stent through a catheter — to justify payment for a new stent," the prosecutor wrote, calling Godiali’s crimes "coldly calculated" to enrich himself and conceal his crimes.

Michigan a hot spot for crooked doctors

Godiali is among more than 100 doctors who have been charged with health care fraud and/or unlawful pill prescribing over the last decade in Michigan, where one physician goes to prison every month for fraud. According to the Department of Justice, more doctors and pharmacists have been sentenced in southeastern Michigan for fraud than in any state other than New York.

But what's missing from Godiali's story is the luxury lifestyle theme typically found in these crooked doctor cases, where private jet trips, mansions, luxury cars, designer clothes and watches are cited by prosecutors as the fruits of ill-gotten gains.

In the case of Godiali, who drove a used Honda, prosecutors cited only money, lots of money, enough to pay off his restitution tab and his wife's $7.5 million divorce settlement. According to court documents, his now-ex-wife, Anna, left him when she found out he was going to plead guilty, and moved to Wisconsin with their children.

His lawyer, Matthew Borgula, wrote in a sentencing memo that his wife "left as soon as she realized that he would plead guilty, and secretly took one of the few investments not seized by the government, without Dr. Godiali’s knowledge."

That investment was not disclosed.

Godiali also was charged with money laundering, with the government alleging he hid money in at least six shell companies and Swiss accounts, though those charges were ultimately dismissed.

Godiali argued that no money was laundered, that all his accounts were in his name, that he reported the money to the IRS and paid taxes on it.

'I was cornered'

Despite his guilty plea, Godiali maintains he is innocent and said the only reason he cut a deal with the government is because he felt he had no choice after his assets were seized.

"There was no intention to commit any fraud," Godiali told the Paste BN Network in a Wednesday phone interview. "My practice was destroyed right on the spot. In 2017, they seized all my assets. I had $40 in my wallet. I couldn’t even buy groceries."

With the weight of the government against him, he said, entering into a plea deal seemed the only option.

"I had no other choice at that point. I thought it would be the best way to resolve this," Godiali said. "I was cornered. I had no money to live on."

Godiali is living in Bay City and said he plans to report to prison sometime this summer, as allowed by the judge.

He described the last eight years as an "absolute nightmare." Not only did he lose his medical practice, but he also lost his family.

'Dr. Godiali has lived a remarkable life'

In seeking mercy from the judge, Godiali’s lawyer explained his client’s complicated and often-tumultuous life story, maintaining "Dr. Godiali has lived a remarkable life."

According to multiple court filings, here is a detailed account of that "remarkable" life:

Godiali was born Vasso Zaurovich Godziachvili in 1963 in the ancient city of Rustavi, Georgia, which was then a part of the Union of Soviet Socialist Republics. His mother was a chemical engineer, his father a plant technologist.

At the age of 17, Godiali left home to begin medical school in Tbilisi, Georgia. Within three years, he transferred to the First Pavlov State Medical University in St. Petersburg, Russia, where he was met with discrimination and insults over his Georgian heritage, and less-than-perfect Russian.

Still, he graduated at the top of his class despite being its youngest member. At 23, he was fully licensed to practice medicine in Russia. He would stay at the institute and work directly for the head of surgery, researching and developing a new technique for pancreas transplants — which was nonexistent in the Soviet Union at the time — and then pursuing his Ph.D. in this field.

Godiali flees amid political violence

At 27, Godiali was placed in charge of a new transplant clinic in Russia that rolled out the new techniques he had developed during his post-doctorate research. He wanted to one day open his own transplant clinic in Georgia, though that plan was scuttled when a revolutionary movement broke out.

Georgia was trying to break free from the Soviet Union. There was bloodshed, most notably a 1989 massacre in Tbilisi, when the Soviet Army killed 21 Georgians and injured hundreds during a peaceful protest.

One year later, Georgia would finally hold its first democratic elections. But by then, Godiali was planning his exit.

In 1990, he traveled to the U.S. Consulate in St. Petersburg to apply for a tourist visa to the United States. The consulate noted it was no secret the U.S. suspected every Soviet applying for a visa to be a “Russian spy” as it conducted an interview and background investigation of him, his family and colleagues.

Within a year, Godiali was granted a tourist visa to the United States.

Coming to America

On July 13, 1991, Godiali arrived in New York with $200, the maximum amount he was permitted to take out of Georgia.

His plan was to return to Georgia in September — though that would never happen. Political unrest and a bloody coup had killed many of his friends. His family discouraged him from returning.

So he applied for political asylum in the U.S., where he would build his new life.

“Dr. Godiali describes his early years in the United States in dream-like terms. He recalls going into the library at Syracuse University and feeling like a thirsty horse who was finally able to drink as much as he wanted,” attorney Borgula wrote in a sentencing memo.

Godiali couldn’t practice medicine until he earned his American credentials, which relied on his asylum status. So as he waited for an asylum decision, he worked manual labor. He took temporary jobs washing dishes at a Chinese restaurant, mowing lawns and painting, among other things. He made about $3 an hour, his employers having no idea he was a skilled surgeon.

A year after applying for political asylum, he was granted the right to work in the U.S.

“He was elated. His first full-time job in the United States was as a dishwasher at Denny’s. He felt like the luckiest man on earth,” his lawyer wrote.

Landing a phlebotomist job

While working in restaurants, Godiali saved enough money to buy a 10-year-old car. He eventually got a job interview at St. Joseph’s Hospital in Syracuse, New York.

It was for a phlebotomist.

He had seen an ad for the job and would get it with the help of a man for whom he once mowed lawns. The man was an Iranian immigrant who also was a radiologist at St. Joseph’s hospital. Godiali got the phlebotomist job, and word quickly spread at the hospital that he was a vascular surgeon.

Soon, doctors started reaching out to him for advice and expertise.

By 1993, two years after arriving in the U.S., he would receive certification and permission to apply to surgical residencies. He applied to 220 hospitals.

Godiali moves to Michigan

Godiali was offered 17 interviews at residency programs. His used car was unreliable, so he rented a car and drove to interviews in North Dakota, Pennsylvania, Texas and Michigan, where a doctor would take notice of his research and experience with transplants, and offer him a research job in his lab.

Godiali moved to Michigan, and a year later was matched for a surgery residency at Wayne State University’s Oakland Medical Center. It was a five-year program, during which he also won the prestigious Alexander Walt Award from the American College Surgeons for his published research, and a Michigan award for his work on transplant surgery techniques.

“Dr. Godiali once again felt like the luckiest man in the world,” his lawyer wrote.

After completing his residency in Detroit in 2000, he pursued a fellowship in vascular surgery, which involved two more years of training at Eastern Virginia Medical School. After finishing his fellowship in Virginia, and passing his vascular surgery boards on the first try, he set out to find a place to grow his practice. A place where his expertise and personal story would be needed and accepted.

He came back to Michigan.

Marriage, family and a thriving Bay City practice

It was love, in part, that brought Godiali back to Michigan, where he had met a woman named Anna Steppe while working at a hospital years earlier in Detroit. Anna had two children from her first marriage, and Godiali “found himself wanting to fulfill a fatherly role for the children, whose lives up to that point had seemed tumultuous.”

So Godiali married Steppe and moved to Bay City, where he would raise a family, become a naturalized U.S. citizen, build a successful practice in vascular surgery, and serve an aging population that struggled financially and battled chronic conditions like diabetes. He never harmed any patients, his lawyer stressed, but rather saved lives using a rare set of skills he developed over the years.

“With a lower-than average cost of living in Bay City, and a higher-than-average income, Dr. Godiali was able to amass the tens of millions of dollars in assets that ultimately were seized and forfeited by the government through his high-volume medical practice of actual patients,” his lawyer wrote in court documents.

His lawyer portrayed Godiali as a generous man, saying he was known to pay out of pocket for taxi rides for patients who couldn't get to their appointments but needed treatment. And when he lost his Medicare privileges, his lawyer said, he continued to see the elderly patients who needed his care.

Godiali's patients and their families also had words of praise for him, as evidenced in letters that were tucked away in his home and office, long before the feds arrived.

“Your kind words for a 17-year-old in kidney failure of ‘You’re okay buddy, I’ll take care of you’ brought and still brings (him) comfort,” one family wrote him.

The daughter of another patient wrote him: “I just wanted to thank-you for being so kind and sweet to my mother, she really like(d) you and said how wonderful you were to pick her up with her broken arm to put her on the table. I’ll never forget the sweetness that you had shown her in the short time she had been going to you.”

Godiali blames financial missteps on accountant

Perhaps Godiali's biggest mistake, his lawyer wrote, was trusting his wealth to others — primarily an accountant he paid $10,000 a month to oversee his financial affairs.

“Unfortunately, Dr. Godiali lacked the time or experience to manage his business and substantial income properly,” his lawyer wrote, adding that his client hired professionals to do this, “some of whom unfortunately gave him bad advice with negative financial consequences.”

For example, the lawyer argued, it was Godiali's accountant who suggested creating six entities in Godiali's name — what the government called shell companies — to avoid liability and/or to organize expenses and revenue, not conceal criminal proceeds.

“All of those accounts were in Dr. Godiali’s name or his wife’s name, and apparently were not concealed very well since the government seized them without much effort,” his lawyer writes.

Feds: Godiali was driven by greed

In seeking a stiff punishment for Godiali, the government argued he was driven by greed and took advantage of his patients to line his pockets. While he did not injure them, prosecutors conceded, "he took advantage of them and their conditions to commit his crimes."

"He often used what seemed like acts of charity — waiving copayments — to keep a high volume of patients coming through the door regularly," prosecutors argued.

"Godiali undoubtedly worked hard," prosecutors noted. "But at some point, his hard work and diligence began to be directed to less-than-noble ends."

Specifically, they alleged, he wanted more money.

"For more than a decade, he had a busy practice which consisted, in large part, of hemodialysis patients who needed frequent surgical interventions. ... And his practice was lucrative: in 2008, Medicare paid Godiali more than $3.5 million," prosecutors wrote. "But that wasn’t enough."

So he came up with a plan to steal money from health insurers, prosecutors allege, adding that Godiali started out slowly but became emboldened.

"By 2014, fraud touched almost every bill Godiali submitted to Medicare, Medicaid and Blue Cross," prosecutors wrote. "Godiali made a fortune."

In 2017, the federal government seized $40 million in assets from Godiali.

As Detroit's FBI chief James Tarasca said: “The scope of Godiali’s fraud is truly stunning.”

Tresa Baldas is an award-winning courts and legal issues reporter and was awarded the 2023 Wade H. McCree Award for the Advancement of Justice by the Michigan Press Association. Contact her at tbaldas@freepress.com