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Assistant Attorney General for the Criminal Division Lanny A. Breuer Speaks at the Los Angeles Health Care Fraud Prevention Summit
Los Angeles ~ Thursday, August 26, 2010

Thank you, Mr. Attorney General. It is a real pleasure to join you, Secretary Sebelius, and my friend and partner, U.S. Attorney Andre Birotte, Jr., for this, our second Regional Health Care Fraud Prevention Summit. The partnership between the Department of Justice and the Department of Health and Human Services has never been stronger. And that strength comes from a very tangible commitment from the highest levels of both Departments to the prosecutors and agents who work side-by-side, each and every day, to identify health care fraud as it is happening.

These Summits offer our agencies the opportunity to share our success stories, explain our innovative investigative approaches, and listen to and learn from your ideas and concerns. I see many of our Strike Force partners in the audience today – agents and investigators from the FBI; the Office of Inspector General for HHS; and the Bureau of Medi-Cal Fraud and Elder Abuse at the California Department of Justice – all whom work together to scour the available data and investigative files for fraud patterns, tracking down leads and bringing cases as quickly and responsibly as possible.

The results of these partnerships – across federal agencies and with state and local law enforcement – have been impressive. In the past three years, our team has filed criminal charges against more than 810 individuals around the country who have tried to bilk the Medicare program of approximately $1.9 billion in fraudulent claims. We have identified and prosecuted schemes involving promises of durable medical equipment (DME) supplies, like power wheelchairs, for those who never receive them; expensive HIV infusion treatments for individuals who do not need them; physical therapy and services that are never delivered; and home health agencies whose so-called "patients" are paid kickbacks in exchange for pretending that they need medical services. And, L.A. fraudsters account for nearly one hundred million dollars in these illegitimate claims to Medicare.

In 2007, the Criminal Division of the Justice Department refocused our approach to investigating and prosecuting health care fraud cases. Our investigative approach is now data driven: put simply, our analysts and agents review Medicare billing data from across the country; identify patterns of unusual billing conduct; and then deploy our "Strike Force" teams of investigators and prosecutors to those hotspots to investigate, make arrests, and prosecute. And a s criminals become more creative and sophisticated, we intend to use our most aggressive investigative techniques to be right at their heels. Whenever possible, we actively use undercover operations, court-authorized wiretaps and room bugs, and confidential informants to stop these schemes in their tracks.

The results have been unprecedented. Just last month, Attorney General Holder and Secretary Sebelius announced the largest federal health care fraud takedown since Medicare Fraud Strike Force operations began in 2007: 94 defendants in five cities were charged with fraud amounting to more than $251 million.

And we aren’t just arresting these fraudsters – we are sending them to jail and we are taking back the money they stole from their victims. Last week, a federal judge in Detroit sentenced Dr. Jose Castro-Ramirez to 14 years in jail for his involvement in a scheme to defraud Medicare for various physical and occupational therapy scams. Moreover, the judge ordered the defendant to pay $9.4 million dollars in restitution. These stiff sentences, and steep restitution orders, send a clear message to those who might use these schemes to steal taxpayer dollars: that the country simply will not tolerate the looting of our Medicare program.

Here in Los Angeles, our work together has yielded tremendous results. Let me give you some examples of the successes the LA Strike Force has achieved:

  • A 31-year-old Long Beach man was convicted in April for recruiting relatives and members of the Brook Street Gang, based in Santa Ana, to pose as owners of fake medical supply companies.  Those sham companies -- many of which were nominally owned and operated by gang members -- fraudulently billed Medicare for $11.2 million worth of unnecessary wheelchairs and equipment.
  • In another case, an owner of a medical equipment supply company billed Medicare for power wheelchairs costing up to $7,000 each, on behalf of more than 170 beneficiaries, none of whom actually needed the wheelchairs. In all, he submitted $1.1 million in phony claims to Medicare. And, his acts were surprisingly brazen. Indeed, elderly and disabled Medicare beneficiaries testified at his trial that individuals known as "marketers" approached them on the street, at home, or even in church and convinced them to hand over their Medicare numbers and other personal information to the marketers in exchange for these free power wheelchairs. One beneficiary testified that an individual pretending to be from Medicare, but who was actually an associate of the defendant, threatened to terminate her Medicare benefits unless she accepted a power wheelchair that she did not need. In March, that defendant was sentenced to 9 years in prison and ordered to pay back the $526,000 he had received from Medicare, plus a $25,000 fine.
  • Just this past May, Strike Force prosecutors here filed an indictment charging four defendants with a scheme involving numerous medical clinics in and around Los Angeles. These clinics allegedly billed Medicare for nearly $19 million in fraudulent claims by submitting claims for diagnostic and medical tests, power wheelchairs and accessories, orthopedic and diabetic shoes, and orthotics – all for beneficiaries who did not need them.

These cases make it abundantly clear why the Strike Force model is such a priority for the Criminal Division and for the Administration as a whole – both to protect Medicare funds for the people, some gravely ill, who desperately need medical services now, and to ensure that our children and their children do not find the coffers emptied by criminals. By aggressively targeting the fraud as it happens, we send an unmistakable message to would-be fraudsters that the federal government is paying attention. We are paying attention in New York, Miami, Detroit, Baton Rouge, Tampa and Houston. And we are paying attention here in Los Angeles; let me say that again – we are paying attention in Los Angeles.

Of course, we could not have achieved these tremendous results without the commitment and cooperation – not just in words, but in actions – of our law enforcement partners and the public. And although we certainly should celebrate our successes, we are here today because we know we cannot stop now and we must still do more. Indeed, we have just begun the real fight; and we are in this battle to win. By partnering together and by educating the public about the schemes used by fraudsters – here in L.A. and elsewhere in the country – we can ensure that the monies in our public fisc that are dedicated to providing health care for all Americans, go to the people who need them most, and not to line the pockets of criminals.

* * * * *

Today’s law enforcement panel includes some of the people who are working on the front lines of this problem. They are here to talk to you about how law enforcement – prosecutors and agents – are combating this issue each and every day. Greg Andres – one of my Deputy Assistant Attorneys General in the Criminal Division – is here to lead this discussion. Thank you for letting me join you here today. I’ll turn it over to Greg and this panel.

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