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Justice Department charges 94 people with health-care fraud

By Jerry Markon
Washington Post Staff Writer
Friday, July 16, 2010; 9:14 PM

The Justice Department stepped up its crackdown on Medicare and Medicaid cheats Friday, announcing charges against 94 people in what authorities called the largest health-care fraud sting in U.S. history.

Federal agents fanned out across five states to arrest defendants accused of bilking the Medicare system out of more than $251 million through false claims for services that were medically unnecessary or never provided. Among those charged, officials said, are doctors and health-care company owners and executives. Thirty-six of the defendants had been arrested as of Friday afternoon.

In one alleged $70 million scheme operated out of a New York clinic, more than 1,000 cash kickbacks were paid to Medicare beneficiaries out of a designated "kickback room," Lanny A. Breuer, assistant attorney general for Justice's criminal division, said at a news conference. An undercover investigation showed that beneficiaries lined up to receive illegal payments near a sign showing a woman with her finger to her lips warning in Russian, "Don't Gossip," Breuer said.

The arrests came as Attorney General Eric H. Holder Jr. and Health and Human Services Secretary Kathleen Sebelius held the first in a series of regional "summits" on health-care fraud prevention in Miami. The high-level attention marked the latest step in crackdown on fraud that the Obama administration has said is a key part of its agenda on health-care reform.

"Countless Americans rely on Medicare for their well-being," said FBI Director Robert S. Mueller III, who added that the FBI and other federal agencies are determined "to stop those who would illegally manipulate the system."

The cost of Medicare, which covers the elderly and disabled, and Medicaid, its sister program for the poor, are growing as the American population ages, giving new urgency to initiatives to detect and prevent phony claims. Health-care fraud is believed to rob the nation's coffers of billions of dollars each year.

In May 2009, the administration launched a high-level task force, the Health Care Fraud Prevention and Enforcement Action Team, which uses electronic claims data -- and the threat of federal prosecution -- to seek out illicit billing. That team's Medicare Fraud Strike Force carried out Friday's raids in Brooklyn, Miami, Baton Rouge, Detroit and Houston.

The defendants face charges that include conspiracy to defraud the Medicare program, criminal false claims, violations of anti-kickback statutes and money laundering. The charges are based on fraud schemes that allegedly involved submitting phony claims to Medicare for physical and occupational therapy, home health care and other treatments.

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