A spokesman for the FBI’s Miami office declined to comment.
The U.S. Attorney’s Office in Miami said Thursday it could not confirm or deny the existence of an ongoing investigation.
The inquiry, which is still in its early stages, began with two disparate issues, according to people familiar with the matter. First, auditors had, for some time, been reviewing allegations that Melgen was fraudulently overbilling Medicare for treating his patients. Melgen’s attorney has said that the doctor’s billing was completely appropriate.
Then, in the fall, the FBI began looking into an anonymous tipster’s allegations that Melgen had arranged prostitutes for Menendez in the Dominican Republic. Such an arrangement could constitute providing a favor or gift under the bribery statute that investigators have been reviewing.
Lawyers for Menendez and Melgen have repeatedly said the allegations involving prostitutes, which were also made by the conservative Web site the Daily Caller, are false and absurd. Menendez has said that the allegations, which first surfaced during his reelection campaign last year, are part of a Republican smear campaign. So far, FBI agents investigating leads in the Dominican Republic have found no evidence that Menendez patronized prostitutes there, according to two people familiar with the probe. Last week, a Dominican escort said in sworn court statements that she was paid to fabricate claims that she had sex with Menendez for money.
Cases of political bribery are extremely hard to build and prove, according to ethics experts and public-corruption defense lawyers, and many such investigations fizzle with prosecutors never bringing charges.
Stan Brand, a veteran defense lawyer on numerous public-corruption cases, said establishing evidence of a crime in a scenario like that being examined by the Miami grand jury would be a “real tough row to hoe” for investigators and prosecutors. Federal bribery laws require proof that a politician received something of value with the express purpose and understanding that it was to influence his or her official action.
“You must show an absolutely direct nexus between the thing of value and the intent and the official act,” Brand said. “Unless you have a wiretap or direct evidence of an official saying, ‘I’ll do this for that,’ it’s too hard to show that.”
Prosecutors often chase down witnesses and records in a possible bribery case even when they have doubts about seeking an indictment because “they can’t be in the position of saying they didn’t vigorously investigate all the leads in a case like this,” Brand said.
Such cases are even more challenging when the politician and the gift-giver have a long-standing friendship, as is the case with the senator and Melgen. If investigators find lavish gifts or favors, juries often find reasonable doubt that they were given with criminal intent, because they could have been given in friendship.
Melgen has hosted Menendez at his Dominican estate numerous times, with the senator visiting the doctor more than two dozen times over the years, said a person familiar with their relationship. The two men talk on the phone weekly, and Melgen rushed to New Jersey to visit with his friend when his mother died and attended her funeral.
Mike Sallah, Luz Lazo, Julie Tate and Alice Crites contributed to this report.
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