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Veteran prosecutor describes SoCal as 'epicenter' of Medicare fraud

Medicare "fraudsters" often don't even bother setting up a fake clinic — they simply use a post office box.
Mae Ryan/KPCC

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Last week, a federal judge in Los Angeles sentenced the the ringleader of a $9 million Medicare fraud scheme to 18 months in prison, and ordered him to reimburse the federal government. Estill Mitts, 68, was a Vietnam War veteran and recipient of the Purple Heart who apologized for his actions — even as he sought to minimize his role in the operation that including recruiting bogus patients from Skid Row.

“We’ve encountered numerous defendants who would never think to steal from any other commercial business, but literally don’t see that much wrong from stealing from the Medicare or Medical program," said Assistant U.S. Attorney Consuelo Woodhead.

The veteran prosecutor specializes in healthcare fraud, and says there are reasons Southern California is a hotbed of such activity.

“There are many, many elderly people here," she said.  "And there are many people on Medi-Cal, which is California’s Medicaid program. Both of them are very vulnerable to fraud."

Private insurers are regular targets too. But it's the Medicare schemes that are becoming more sophisticated.

 “They will recruit students from foreign countries to be the ostensible owners or managers of the medical clinics," Woodhead said. "Then they will steal a doctor’s identity from the Internet, and will not start billing Medicare or billing Medi-Cal until the student has left the country.” 

The federal government’s Office of Management and Budget estimates Medicare fraud runs into the tens of billions of dollars annually. Total Medicare spending tops $500 billion.

Asked about the potential growth of fraud under the Affordable Care Act, Woodhead is blunt.

“Fraudsters follow the money," she said. "So whenever or wherever more money is being spent, fraudsters will go there.”