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FBI: Scam Cost Taxpayers $50M

FBI Makes Arrests In Michigan, Florida, Colorado

POSTED: Wednesday, June 24, 2009
UPDATED: 10:34 am EDT August 27, 2009

The FBI released 53 indictments Wednesday morning in a Medicare fraud investigation that’s been going on for at least seven years.

Rescue 4 Investigators first exposed the nationwide investigation in November 2008.

At that time, Rescue 4 sources estimated a gang of criminals in Michigan defrauded taxpayers out of $12 million dollars. Wednesday, the FBI revealed the figure is over $50 million.

Suspects were arrested in Detroit, Miami, and Denver as part of a wide-ranging effort by the government to crack down on those allegedly defrauding the government-funded health care program for the elderly and disabled.

Attorney General Eric Holder, Health and Human Services Secretary Kathleen Sebelius, and FBI Director Robert Mueller announced the charges at a news conference in Washington.

Sebelius said the Obama administration is determined to crack down on Medicare fraud through new teams of investigators detecting patterns of false billing. Forty of the suspects have already been arrested and the rest are being sought, authorities said.

"The Obama administration is committed to turning up the heat on Medicare fraud," said Sebelius.

Local 4 sources claim dozens of people would target the homeless and approach them under overpasses, in soup kitchens and on the streets, searching for those with Medicare cards.

Each Medicare card number is unique to a specific person and helps the government track treatments it’s funding with taxpayer dollars.

The FBI said the people involved in the alleged scam would pay the homeless up to $500 or even offer them drugs in exchange for their Medicare and Social Security numbers, then take that information to offices registered as medical centers.

Federal authorities said that people at the various medical centers across metro Detroit then bill the government for medical treatments the homeless never received.

Before facing the US District Court Wednesday morning, a woman named Bernice Brown, who is just one of the many accused, shouted her innocence.

“I am totally innocent,” said Brown. “And I have been begging and begging for someone to help me and no one will help me,” she said emotionally.

“I am an innocent woman,” Brown reiterated.

Brown said she ran Wayne County Therapeutics in Livonia for 20 years as a legitimate business.

She blamed a former associate for entangling her in the alleged scheme; however, federal investigators charged Brown for billing the government for patients they said she never treated.

Another person listed in the indictments is Wayne Smith. He’s the man Rescue 4 Investigators confronted last November.

Smith is accused of rounding up Medicare numbers from the homeless and turning the information over to so-called medical clinics.
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