(CNN) -- This is a Russian spy ring that would embarrass Anna Chapman.
Justice Department prosecutors last week filed charges against what they say is a group of current and former Russian diplomats who allegedly ran a nine-year scheme that bilked $1.5 million from Medicaid, the U.S. health benefits program for the poor.
But CNN has learned that there's a spy angle to this case. Federal counterintelligence investigators say they believe some of the alleged participants in the fraud scheme were also engaged in espionage, sources tell CNN. Federal Bureau of Investigation agents were on the trail of the alleged spies for some time, sources say. But in the end, the Justice Department decided to bring only the fraud charges.
There are 49 people charged in the case -- 25 current and former Russian diplomats and 24 of their spouses. But only 11 of them remain in the U.S. and all have diplomatic immunity. So unless the Russian government waives their immunity -- which is unlikely -- they can't be arrested. Instead, the State Department is expected to seek to have them sent home.
The case comes amid some tensions in U.S.-Russian relations over a variety of issues, from Syria and Iran to the Russian asylum granted to former National Security Agency leaker Edward Snowden. Counterintelligence officials say Russian spying activity in the U.S. is back to near Cold War levels.
In 2010, the FBI rounded up a group of Russian sleeper agents who were part of what the U.S. called the Illegals Program. Ten people who posed as academics and business people were arrested, including Anna Chapman, now 31 years old. She posed as an entrepreneur and socialite, and garnered the most attention for her glamorous looks. Vice President Joe Biden joked on a talk show that he wouldn't have sent her back to Russia.
The U.S. and Russia conducted a spy swap to resolve the issue, after the 10 spies pleaded guilty. Another alleged Russian spy in the group fled after being arrested in Cyprus. And a 12th was deported.
While the Illegals used sophisticated communications methods to avoid detection, the latest group charged is portrayed in court documents more as common fraudsters.
It couldn't be learned how many of the 49 charged last week are suspected of spying and what type of activity the FBI investigators in New York and Washington believe they were involved in. But Manhattan federal prosecutors believed they didn't have enough evidence to bring espionage charges, one source said. In any case, U.S. officials view the fraud charges as more embarrassing to the Russian government.
Manhattan U.S. Attorney Preet Bharara accused the 49 charged in the fraud case of \"picking pockets\" in the U.S. \"Here, as alleged, a multitude of Russian diplomats and their spouses ran a scam on a health care system designed to help Americans in need,\" Bharara said.
The accused work as mission, consulate and trade representatives in New York, although one also once worked at the embassy in Washington. The Russian government normally pays for medical costs of their employees, and those employees' children aren't generally eligible for U.S. citizenship at birth.
According to prosecutors, the diplomats falsified Medicaid benefits applications, under-reporting incomes or reporting no income to qualify. While they got benefits, they had a taste for high-end shopping, spending thousands at stores such as Tiffany and Bloomingdale's.
One former Russian diplomat charged is named Timur Salomatin, who with his wife, Nailya Babaeva, applied for Medicaid pregnancy benefits in November 2010 and represented Salomatin's salary to be $3,000 a month, and later $4,400 a month. The family got almost $31,000 in fraudulent Medicaid benefits, prosecutors say. While getting Medicaid benefits last year, the couple spent $50,000 on purchases from retailers such as Apple, Prada and Bloomingdale's, prosecutors allege.