Busted: 94 charged with $251 million in false Medicare claims

Federal officials charged 94 people with plotting to swindle Medicare out of more than $251 million in false claims, the Department of Justice and other federal agencies said in a joint statement released Friday. The indictments were part of a crackdown in five U.S. cities that coincided with the nation's first healthcare fraud summit in Miami.

"With today's arrests, we're putting would-be criminals on notice: Healthcare fraud is no longer a safe bet," Attorney General Eric Holder said. "The federal government is working aggressively-and collaboratively-to pursue healthcare criminals around the country and to bring these offenders to justice."

Department of Health and Human Services Secretary Kathleen Sebelius added that the arrests will "send a strong message that attempts to defraud Medicare will not be tolerated."

The operation, which involved 360 law enforcement agents from the FBI, HHS-Office of the Inspector General, multiple Medicaid Fraud Control units and state and local law enforcement, is the biggest federal healthcare fraud takedown since the Medicare Fraud Strike Force operations began in 2007. The strike force is a multi-agency team of federal, state, and local investigators who combat Medicare fraud through data analysis and community policing.

The charges included conspiracy to defraud the Medicare program, criminal false claims, violations of the anti-kickback statutes and money laundering. The alleged fraud schemes covered a wide range, including physical therapy and occupational therapy, home health, HIV infusion fraud and durable medical equipment. In many cases, indictments and complaints allege that beneficiaries accepted cash kickbacks in return for allowing providers to submit forms saying they had received the treatments that were actually not necessary or never provided.

Those charged with Medicare fraud in today's bust include doctors, healthcare company owners, executives, nurses, patient recruiters and even one medical biller who allegedly billed $49 million in false claims. The operation focused on Miami, New York City, Detroit, Houston and Baton Rouge.

Since its inception in March 2007, the Strike Force has obtained indictments for more than 810 people and organizations that collectively have billed Medicare for more than $1.85 billion.

Because Medicare is seen as more lucrative than dealing drugs, with less harsh criminal penalties, violent criminals and mobsters find such scams attractive, the Associated Press reported. In one Brooklyn case, more than 3,744 claims were submitted on behalf of one woman over six years.

In another Brooklyn case that was more elaborate than most, the Medicare fraud probe involved undercover agents and wiretaps to penetrate an alleged Russian mob operation that ran a $72 million scam that submitted bogus claims for physical therapy for elderly Russian immigrants. According to the AP, clinic owners paid patients, including undercover agents, for the use of their Medicare numbers and a bonus fee for recruiting new "patients."

The investigation involved recordings of a "kickback" room where the ringleader discussed bribes for patients and doctors. A man sat there and did nothing but pay patients all day, according to the AP. In the bugged kickback room, a Soviet-style poster hung on the wall, showing a woman with a finger to her lips. In Russian, the poster warned visitors not to gossip and to be on the lookout.

Apparently, the walls had ears.

To learn more:
- read the Department of Justice press release
- read the AP story
- read the CNN story
- see the Miami Herald's piece
- see the Wall Street Journal article

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