Miami Medicare Fraud Ring Linked to Check Cashing Stores

Jun 26, 2009   
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Casual news-watchers may have missed the significance of the seemingly unrelated stories, but the legal and regulatory compliance professionals at FHI clearly saw the connection.As we reported previously, federal law enforcement agencies have increased their enforcement focus on Medicare fraud in the Miami area in a significant way. Under this program, on June 23, 2009, Federal officials in Miami announced that eight defendants were charged in an elaborate Medicare fraud that spanned five states, used 29 fake storefronts, and attempted to steal $100 million from Medicare and Medicare Advantage.

The indictments allege that Michel De Jesus Huarte and the defendants fronted their scam through more than a dozen phony medical clinics throughout the Southeast United States. In many cases, the storefronts were simply post office boxes.

They would submit fraudulent invoices to the government, then use check cashing stores to launder the reimbursements; money is harder to track through these stores than through conventional banks. The fraud group owned two check cashing stores in the Miami area and netted between $30,000 and $80,000 in cash several times a week.

According to government court filings, Huarte paid the fake store owners in cash “with the understanding that (they) would flee to Cuba to avoid law enforcement detection or capture.” Two of the defendants and approximately $30 million are still missing.

This fraud ring is similar to a scheme run through the La Bamba Check Cashing store. In that case, the Benitez brothers were accused of laundering $24 million in Medicare fraud money by using shell companies to cash checks at a local chain of stores. As we reported in our blog, Juan Rene Caro, owner of La Bamba, was recently sentenced in Federal court for using the check cashing store to launder funds from a construction fraud ring involving violations of the Bank Secrecy Act. You can read about the harsh sentence handed down to Mr. Caro here.

Viewed through a single lens, these indictments and convictions mean that the Federal government is not only going after those who perpetrate Medicare fraud, but those who move and launder the funds from these schemes as well. The implications are clear: if you are involved in Medicare fraud activities in any way, the government will be coming for you.

Let Fuerst Ittleman assist your health care company with its regulatory compliance to help protect you against fraud and other illegal activities. Please contact us at 305-350-5690 or