November 5, 2012

Operation Universal Money Fast

Putting the Brakes on Health Care Fraud

Ramon Fonseca, Orlin M. Tamayo Quinonez, and Juan Carralero were previously wanted for allegedly conspiring in a scheme to defraud the Medicare program out of tens of millions of dollars. See for more information.

Ramon Fonseca, Orlin M. Tamayo Quinonez, and Juan Carralero are wanted for allegedly conspiring in a scheme to defraud the Medicare program out of tens of millions of dollars.

With its aging, affluent population, South Florida is ground zero for the multi-billion-dollar criminal industry of health care fraud. Few cases illustrate the depth of the problem—and our efforts to fight it—more than Operation Universal Money Fast.

The case involved a massive, sophisticated fraud against Medicare and private insurance companies by scammers who set up more than a dozen fake clinics across five states and submitted tens of millions of dollars in bogus claims related primarily to HIV infusion therapy.

Using stolen identities and bribing physicians to lend an air of legitimacy to the fraud, the thieves bilked the system for an estimated $70 million before we dismantled the enterprise.

Despite the many safeguards built into the Medicare reimbursement process—such as audits and onsite visits to clinics and providers—the system is largely based on trust. If a business believed to be legitimate submits claims using proper paperwork and billing codes, those claims are paid quickly.

The crooks were counting on that. They knew the fraud would eventually be discovered, but they stayed one step ahead of authorities by opening shell companies and phantom clinics across Florida, Georgia, Louisiana, North Carolina, and South Carolina. In reality, the clinics were empty storefronts—some were nothing more than a post-office box. No patients were ever seen or treated, and no doctors worked there.

“All they needed was a laptop, stolen identities, and billing codes,” said Special Agent Randy Culp, who works health care fraud investigations out of our Miami office. “By the time the insurance companies suspected fraud, the fraudsters had already moved on to some new fictitious clinic.”

To conceal their true identities, the subjects registered the bogus businesses in the names of nominal owners and opened a check-cashing store—called Universal Money Fast—to launder more than $50 million in benefits paid by Medicare and private insurers.

“Insurance companies were alerted by their customers to the fraud,” Culp said. “People were getting statements and seeing benefits for infusion therapy, and they were calling and saying, ‘Hey, I’m not HIV-positive. What’s going on?’ ”

During the height of the scam, said Special Agent Liz Santamaria, who worked on the case, “the subjects were submitting Medicare bills at the rate of $100,000 per week. They were making easy money and spending it as soon as they made it,” she added, explaining that the scammers thought nothing of dropping $10,000 in one evening for a lavish dinner.

Our Medicare Fraud Strike Force (see sidebar) opened an investigation in 2009 and used investigative tools such as informants and search warrants to stop the fraud and arrest the perpetrators. In 2010, ringleader Michel De Jesus Huarte received a record sentence for health care fraud of 22 years in prison. Nine other defendants received significant sentences as well. Three remaining subjects in the case remain at large and are believed to be out of the country (see posters).

“Large-scale fraud like this undermines the financial integrity of the Medicare program,” Culp said. “The FBI and our partners are committed to fighting these white-collar criminal enterprises, and we are gratified that those who commit these frauds are getting significant prison terms for their actions.”

- Universal Money Fast press release

Medicare Fraud Strike Force

The Medicare Fraud Strike Force, established in 2007 in Miami to put a full-court press on health care fraud in South Florida, is a joint effort of the Departments of Justice and Health and Human Services. A multi-agency team of federal, state, and local investigators and prosecutors fights these frauds through the use of Medicare data analysis and other investigative techniques. Since its creation, strike force operations have charged more than 1,250 defendants who have collectively billed the Medicare program for more than $3 billion.

The Florida model has been so successful that similar strike force teams have been established in Los Angeles, New York, and six other U.S. cities. This past May, a nationwide takedownby the task force in seven cities resulted in charges against 107 individuals—including doctors, nurses, and other licensed medical professionals—for their participation in Medicare fraud schemes involving approximately $452 million in false billing.