June 23, 2009 / 10:29 PM / 10 years ago

Miami group charged in $100 million Medicare fraud

MIAMI (Reuters) - A band of conspirators in Miami defrauded the U.S. healthcare system by creating phony clinics that churned out $100 million of medical bills in five states, federal prosecutors said on Tuesday.

Some of the purported clinics were empty storefronts with handwritten signs while others existed only as post office boxes, but none provided any actual medical services, prosecutors said.

Eight defendants were indicted on charges ranging from conspiracy to commit Medicare fraud and money laundering to aggravated identity theft.

Medicare is a federal health insurance plan for the elderly and is one of many programs under scrutiny as part of an effort to overhaul the U.S. healthcare system.

Medicare fraud indictments are common in Florida, which has the nation’s largest percentage of elderly residents, but prosecutors said this case was notable for its scale.

“This case is remarkable, not only in terms of the amounts stolen from Medicare, but also in terms of its sophistication and geographic breadth,” said Jeffrey Sloman, acting U.S. attorney for the Southern District of Florida.

“These defendants attempted to steal approximately $100 million from the elderly, blind and disabled by using multiple store-front clinics in five different states and then laundered their profits through local check cashing stores,” he added.

Six defendants were arrested and two are fugitives.

While the allegedly fraudulent bills totaled nearly $100 million, it was unclear how much of that was actually collected.

The 20-count indictment alleges that defendant Michel De Jesus Huarte set up six purported clinics in the Miami area, recruiting straw owners whose names would appear on the paperwork. They were paid large sums of cash with the understanding they would flee to Cuba if necessary to avoid capture, the indictment said.

The clinics submitted false claims to Medicare seeking reimbursement for purportedly providing intravenous treatment for cancer, AIDS, varicose veins and other illnesses, the charges said.

The defendants also set up eight other clinics in Florida, Georgia, Louisiana, North Carolina, and South Carolina and used them to submit fraudulent claims to private insurance companies that provided coverage to Medicare beneficiaries.

The indictment alleges the defendants bought lists of patient names and submitted fraudulent claims on their behalf, using doctors’ identifying numbers without the knowledge of either the patients or the doctors.

It says the defendants then laundered the payments through Miami check-cashing companies, collecting $30,000 to $80,000 several times a week.

If convicted, they would face up to 10 years in prison on each count of conspiracy, healthcare fraud and money laundering, and up to two years in prison for each count of aggravated identity theft. The government is also asking for forfeiture of the ill-gotten profits.

Editing by Pascal Fletcher and Vicki Allen

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