Doctors, Nurses, Therapists Arrested For Medicare Fraud Agents raided health care facilities in 9 states as one of largest busts ever

Feb. 17, 2011 -- Federal agents raided health care facilities in nine states this morning, arresting dozens of suspects believed to be defrauding Medicare of tens of millions of dollars.

Federal authorities say this is one of the largest -- if not the largest -- take-down of Medicare fraud suspects ever conducted.

The raids began this morning in the pre-dawn hours. The targets: more than 100 doctors, nurses, therapists and healthcare company executives who have allegedly been stealing tax dollars to the tune of $200 million in recent months. Much of the fraud involved healthcare professionals billing the government for medical services never performed and medicine not provided.

The raids were conducted in Miami, Brooklyn, Tampa, Chicago, Baton Rouge, Houston, Dallas, and Los Angeles.

"With this takedown, we have identified and shut down large-scale fraud schemes operating throughout the country. We have safeguarded precious taxpayer dollars. And we have helped to protect our nation's most essential health care programs, Medicare and Medicaid," said Attorney General Holder. "As today's arrests prove, we are waging an aggressive fight against health care fraud."

ABC News was on the scene when federal agents closed in on a string of physical therapy clinics in Brooklyn, N.Y., this morning. Sources say the three clinics are suspected of bilking Medicare and Medicaid for more than $50 million over the last two years.

Investigators say the Brooklyn scheme worked like this: Patients willing to go along with the scam were paid $40 per visit for three appointments per week, and were often diagnosed with vertigo or other ailments that would limit their mobility. Ambulettes provided by Medicare and Medicaid were transporting these patients back and forth for fraudulent appointments.

The clinic would then collect from Medicare or Medicaid for the ambulette rides, and the supposed services provided at the phony appointments. Taxpayers were billed millions for unnecessary treatment or treatment never provided.

Seven of the nine Brooklyn suspects are in custody. ABC producers on the scene saw the some of the suspects being read their Miranda rights in Russian.

This morning in Miami, federal agents arrested more than 30 Medicare fraud suspects. The indictment charges the defendants submitted tens of thousands of dollars in bogus claims for elderly and disabled patients.

In Miami, 32 defendants, including two doctors and eight nurses, were charged for their participation in various fraud schemes involving a total of $55 million in false billings for home health care, durable medical equipment and prescription drugs.

Twenty-one defendants, including three doctors, three physical therapists and one occupational therapist, were charged in Detroit for schemes to defraud Medicare of more than $23 million. The Detroit cases involve false claims for home health care, nerve conduction tests, psychotherapy, physical therapy and podiatry.

In Brooklyn, N.Y., 10 individuals, including three doctors and one physical therapist, were charged with fraud schemes involving $90 million in false billings for physical therapy, proctology services and nerve conduction tests.

Ten defendants were charged in Tampa for participating in schemes involving more than $5 million related to false claims for physical therapy, durable medical equipment and pharmaceuticals.

Nine individuals were charged in Houston for schemes involving $8 million in fraudulent Medicare claims for physical therapy, durable medical equipment, home health care and chiropractor services.

In Dallas, seven defendants were indicted for conspiring to submit $2.8 million in false billing to Medicare related to durable medical equipment and home health care.

Five defendants were charged in Los Angeles for their roles in schemes to defraud Medicare of more than $28 million. The cases in Los Angeles involve false claims for durable medical equipment and home health care.

In Baton Rouge, La., six individuals were charged for a durable medical equipment fraud scheme involving more than $9 million in false claims.

In Chicago, charges were filed against 11 individuals associated with businesses that have billed Medicare more than $6 million for home health, diagnostic testing and prescription drugs.

"Every American bears the burden of health care fraud, and the FBI, in conjunction with our inter-agency partners, will continue to dismantle criminal networks that bilk the system," said Shawn Henry, executive assistant director of the FBI's Criminal, Cyber, Response and Services Branch. "Our agents and analysts use task forces and undercover operations to identify individuals who treat the health care system as a vehicle to line their pockets."

The Department of Human Services estimates that Medicare fraud cost taxpayers more than $24 billion, just in 2009. HHS Inspector General Daniel Levinson told Congress recently that 1,300 investigations in the past year alone have resulted in 500 Medicare fraud convictions, and an estimated $3 billion in recovered funds. Because of the massive scale of the fraud, special Medicare strike forces were created beginning in 2007 to try to stem the flood of taxpayer dollars flowing to illegal operations.

Levinson told Congress, "Health care fraud schemes commonly include billing for services that were not provided or were not medically necessary, purposely billing for a higher level of service than what was provided, misreporting costs or other data to increase payments, paying kickbacks, and/or stealing providers' or beneficiaries' identities."

And, he says, the perpetrators of these schemes range from street criminals, who believe it is safer and more profitable to steal from Medicare than trafficking in illegal drugs, to Fortune 500 companies that pay kickbacks to physicians in return for referrals.