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Eight Miami Residents Arrested in $100 million Medicare Fraud Schemes

John Commins, for HealthLeaders Media, June 24, 2009

South Florida's well-earned reputation as the Medicare fraud capital of the nation was reaffirmed this week with news that federal prosecutors have arrested eight people and charged them with attempting to bilk Medicare and Medicare Advantage with more than $100 million in fraudulent charges.

Even seasoned prosecutors were impressed by the size, scope, and complexity of the five-state criminal operation. "With new Medicare fraud cases being indicted in the Southern District of Florida every week, it is easy to become numb to otherwise egregious fraudulent conduct and staggering loss amounts," says acting US Attorney Jeffrey H. Sloman.

"This case is remarkable, not only in terms of the amounts stolen from Medicare, but also in terms of its sophistication and geographic breadth. These defendants attempted to steal approximately $100 million from the elderly, blind, and disabled by using multiple store-front clinics in five different states and then laundered their profits through local check cashing stores."

The defendants were identified as: Michel De Jesus Huarte, 38, Ramon Fonseca, 45,Vicente Gonzalez, 38, Alyd Dazza, 45, Monika Blacio, 41, Ricco Dazza, 41, Orlin Tamayo Quinonez, 35, and Juan Carralero, 56, all residents of Miami. They were indicted on June 18 on Medicare and other fraud-related charges. Another person involved, Madelin Machado, was indicted in January 2008, and remains a fugitive, the U.S. Attorney?s office said.

A 20-count indictment charges two separate Medicare fraud conspiracies. The first conspiracy charges that De Jesus Huarte and unindicted conspirators controlled and operated six sham medical clinics in Miami-Dade County that submitted at least $50.2 million in false claims to Medicare for infusion therapy, injection therapy, and other expensive medical treatments. Medicare paid Huarte and his conspirators at least $19.2 million. To conceal his involvement, De Jesus Huarte and his conspirators recruited sham owners for the clinics and paid them large sums of cash to sign the corporate records, bank records, and other business documents.

De Jesus Huarte and six coconspirators also reportedly ran eight sham infusion clinics in Florida, North Carolina, South Carolina, Georgia, and New Orleans that submitted at least $19.8 million in false claims to several private insurance companies that offer coverage through Medicare Advantage, and collected $4.6 million.

The indictment alleges that Huarte and Fonseca deposited fraud proceeds from their clinics at two Miami check cashing stores owned by Dazza and Blacio. They would reportedly accept Medicare Advantage insurance company checks between $30,000 and $80,000 from Huarte and Fonseca as often as three to four times per week and deposit them, wait for the checks to clear, and then deliver the cash to Huarte and/or Fonseca.

Federal prosecutors have long acknowledged that Miami and South Florida are a Medicare fraud hotbed.

In March 2007, the Department of Justice established a Medicare fraud strike force in Southern Florida that has filed about 100 indictments charging more than 170 people with fraud. However, there is also concern that the fraudsters are migrating to other parts of Florida and the country as investigations intensify in South Florida.

Last May, US Attorney Eric Holder said that during the first year of strike force operations in Miami, the federal government estimated that billing for durable medical equipment fell by $1.75 billion in claims and $334 million in payments.


John Commins is a senior editor with HealthLeaders Media.

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