South Florida bolstered its reputation as the Medicare fraud capital of the nation this week when two Miami-based operators of 19 sham medical clinics run out of empty store fronts and post office boxes in five states were arrested and charged with fraud, conspiracy, and money laundering.
The defendants, Michel De Jesus Huarte and Ramon Fonseca, each face up to 20 years in prison on the charges, after they allegedly filed $22.8 million in false claims under the Medicare Advantage program, the US Attorney’s office in Miami says.
A criminal affidavit says the two men controlled 19 medical clinics “purportedly operating” in Florida, Georgia, Louisiana, North Carolina, and South Carolina that collectively submitted $22.7 million in bogus claims for services they didn’t provide to several private insurance companies that cover Medicare Advantage beneficiaries.
Two New Orleans-area clinics–Best Cure Company LLC, and Fast Cure Company–were described by prosecutors as “empty store fronts with handwritten business signs.” Two other clinics–Ziallet Services Inc., and Magestic Group Service Inc.,–“were merely post office boxes in North Carolina and South Carolina, respectively, with no real business activity,” federal prosecutors say.
Most of the fraudulent billings were for pricey cancer and HIV medications administered through infusions. Several Medicare Advantage beneficiaries who the clinics reported were patients at Ziallet and Magestic told investigators they had never heard of the clinics and never received treatments.
When Huarte and Fonseca allegedly received their fraudulent payments, they would deposit the checks with two Miami-area check cashing stores, which would hold the checks until they cleared, and give the money to the two defendants. “The typical cash deliveries were between $30,000 and $80,000, and occurred multiple times per week,” federal prosecutors say.
South Florida has long been considered by federal investigators to be a hotbed for Medicare fraud. In 2007, the federal government established a Medicare Fraud Strike Force for the area to identify, and prosecute durable medical equipment suppliers and infusion clinics suspected of Medicare fraud. As of April, the strike force has convicted 146 people and secured $186 million in criminal fines and recoveries.
Last month, the HHS Office of the Inspector General issued an audit for 2007 entitled Aberrant claim patterns for inhalation drugs in South Florida, which found that: