Feds: Miami-based Medicare fraud ring busted

In the latest Medicare fraud indictment, federal agents say bogus claims were filed for obsolete HIV therapy at a chain of clinics stretching from South Florida to four other states.

Federal agents have dismantled a Miami-based ring they said schemed to defraud Medicare of $100 million by filing false claims for obsolete HIV therapy across five states -- although two of the suspects who posed as clinic owners have fled to Cuba.

The eight-person organization, which was paid $30 million by the federal health insurance program, exported a fraudulent local business enterprise to Georgia, Louisiana, North Carolina and South Carolina by using empty storefronts and post office boxes, agents said.

The alleged conspiracy, outlined in a 20-count indictment unsealed Tuesday, exploited not only Medicare but also private insurers that administered the government entitlement program under the Medicare Advantage plan.

''These defendants have taken healthcare fraud to a new level,'' said Acting U.S. Attorney Jeffrey Sloman. ``The breadth and scope of the scheme is different than what we've ever seen before.''

Since 2005, the U.S. attorney's office in Miami has charged about 800 suspects for filing a total of $2 billion in phony claims -- accounting for one-third of all Medicare fraud cases brought nationwide.

Of those defendants, about 60 are fugitives who have fled to Cuba, Latin America and Europe.

The latest indictment comes as the Obama administration pushes to fight billions of dollars in Medicare fraud as part of healthcare reform that aims to include coverage for more than 40 million uninsured Americans.

The initiative established a joint task force between the Department of Justice and Department of Health and Human Services, and expanded federal strike forces in Miami, Los Angeles, Houston and Detroit.

Detroit is the latest city afflicted by Miami-style Medicare fraud, including HIV, medical equipment and home healthcare scams.

CHARGED

In the Miami-Dade indictment, Michel De Jesus Huarte, 38, is charged with operating six Miami-Dade clinics that submitted $50.2 million in bogus claims for infusion therapy to treat patients with cancer, HIV, AIDS, chronic pain and varicose veins.

But the infusion treatments, administered intravenously, were neither prescribed by doctors nor provided to patients, according to the indictment. And the infusion therapy for HIV/AIDS patients was obsolete, replaced by more effective antiretroviral drugs more than a decade ago.

Medicare paid Huarte's six companies $19.2 million, according to the indictment.

Huarte recruited Cuban immigrants to pose as the owners of his businesses, 'with the understanding that the `straw' owners would flee to Cuba to avoid law enforcement detection or capture,'' according to the indictment filed by prosecutor Ryan Stumphauzer.

Huarte is accused of recruiting Orlin Tamayo Quinonez, 35, and Juan Carralero, 56, as straw owners of a few of his clinics. They are suspected of having fled to Cuba.

Also among those said to pose as a straw owner: Madelin Barbara Machado, 35, who ran Zigma Medical in Miami-Dade.

In a separate indictment last year, she was charged with fraudulently billing Medicare $9.3 million for unnecessary HIV therapy and collecting $4.5 million. But Machado fled and is also believed to be in Cuba, according to the FBI.

BILLING BLOCKED

As Medicare cracked down on Huarte's Miami-Dade network by blocking billing codes for false claims, the indictment said, he teamed up with co-defendant Ramon Fonseca in another alleged conspiracy to expand the infusion scam in South Florida and four other states. Together, the pair owned about 30 additional clinics, but this time they submitted $46.3 million in bogus claims to private insurers that operated under the Medicare Advantage plan, according to the indictment.

The private insurers were especially vulnerable because they were not accustomed to detecting phony Medicare claims. Medicare paid out $9.3 million to the clinics controlled by Huarte and Fonseca, according to the indictment.

Other members of the pair's crew named in the indictment are Vicente Gonzalez, 38; Alyd Dazza, 45; Monika Blacio, 41, and Ricco Dazza, 41.

They are in custody along with Huarte and Fonseca.

According to the indictment, two of the organization's clinics in New Orleans were empty storefronts with handwritten business signs.

The FBI investigation further showed that two other companies, Ziallet Services and Magestic Services, were post office boxes in North Carolina and South Carolina, respectively.

Huarte and Fonseca deposited millions of dollars in Medicare payments at two Miami-Dade check-cashing stores, Universal Money Fast and Rapid Trans Solution owned respectively by Dazza and Blacio, according to the indictment.

The owners would wait for the checks to clear, then deliver the proceeds to clinic owners, authorities said, with typical cash deliveries ranging between $30,000 and $80,000 multiple times a week.