The New Face of Medicare
Drug dealers and organized-crime groups have invaded the Medicare system and are taking the government and citizens for a billion-dollar ride
New York's Empire Blue Cross/Blue Shield and C&S Administrative Services, which serviced the claims, paid out at least $2 million of the $10 million billed. Dozens of patients, however, complained that their Medicare statements showed services that they never received, including $2,400 MRIs, from clinics they never heard of. Empire and C&S notified authorities. Susan Frisco, an agent with the Department of Health and Human Services' Office of Inspector General, tracked down the phony companies and found that Bizaykl's banks had photocopies of his passports. She circulated his picture. He was picked up withdrawing $40,000 and pleaded guilty to fraud charges. Still, much of the stolen $2 million is missing.
The mambo king In Miami, Frank Morfa was known as the proprietor of Little Havana's Mambo Club. In Cuba, he was allegedly "the Accountant," who helped military officials launder cocaine profits.
But lucrative as his nightclub and drug smuggling were, nothing beat the profits provided by U.S. taxpayers, courtesy of the nation's Medicare system. Morfa, investigators say, got into the health care business in 1989 to launder drug money. He settled on a plan selling nutritional milk supplements to Medicare patients whose systems could no longer tolerate milk. Morfa sent recruiters to seek out retirees in homes, apartments, and senior centers, "offering them the opportunity to receive free milk [supplements] from the government," according to a Justice Department statement. Morfa paid his recruiters $50 to $70 for each retiree's Medicare number. The recruiters also took Medicare patients to cooperative doctors, who signed Medicare forms certifying the need for supplements. Morfa paid the recruiters $100 for each form.
Morfa's companies--Morfa Healthcare Inc., Courie Medical Center Corp., and six others--then proceeded to bill the government $400 a month for up to 19 cases of milk supplements per patient, mostly undelivered. Morfa used his many companies to avoid detection and bilked Medicare for $7.5 million. When federal auditors got wise, Morfa fled to Venezuela, but he was arrested and expelled. He pleaded guilty in 1994 and is serving 10 years for Medicare fraud.
Medicare laundry Jose Luis Zayas said he was a drug dealer with a lot of cash that needed to look legitimate. Zayas also was the owner of Perfect Nursing, a home health care agency. But he had a secret job as well: running an FBI sting. From March 1996 to June 1997, according to a federal affidavit, Zayas supplied other home health care agencies with $1.2 million in drug profits that he wanted to cleanse.
Caught in the FBI trap were Ramon Dominguez and Eusebio Huerta, operators of Amitan Health Services and X-Tended Care, a home health care agency. On a dozen occasions beginning in November 1996, Huerta met Zayas at Perfect Nursing's storefront office in Miami's Little Havana. Each time, Zayas handed over $100,000 in cash. Huerta put it in a brown bag or box, the affidavit says. Then, for each $100,000 payment, he would provide Zayas with "between 20 or 25 checks" from a corporate medical account. The checks were for small amounts, "consistent with the fees payable to a subcontractor for home health services." A note on the memo line of each check claimed that it was for "health care visits," the affidavit states.
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