Monday, January 9, 2012

Shell Companies Milk Medicare out of Millions

Medicare defrauders have now come up with a new and efficient way of eluding capture by the feds. Create a shell company. That is what happened when federal authorities finally got to the center of one of the largest and most complicated Medicare fraud cases in recent history.

Michel De Jesus Huarte was busted for running a fake AIDS clinic out of Miami, but, when the clinic was raided and the authorities shut it down, police had no idea who was the mastermind behind the scheme that had taken Medicare for more than $4.5 million. Huarte was extremely resourceful because he funneled the stolen Medicare funds into several shell companies, corporations that only exist on paper but do not have a physical structure and do not carry on any real operations. Huarte was never listed on any of the incorporation materials for any of these companies. He, along with several hundred others, was able to hide from authorities by using this technique.

Although Huarte has now been caught, convicted, and sentenced, a Reuters investigation has found that several others are using shell companies to hide fraudulent Medicare transactions. These “fraud rings” have become extremely popular. The perpetrators steal doctor information and patient information and then bill Medicare as soon as they are able to make the paperwork look legitimate. The goal is for each of the shell companies to put in as many Medicare reimbursement claims as they can before federal and state officials realize that they have been duped.

The scam is so easy that people are starting to get into the Medicare fraud act that one would think would be far removed from that kind of crime. said this: “In one of the largest cases of Medicare fraud ever charged, the operation was enabled by shell companies. In October 2010, federal prosecutors indicted 44 members of an Armenian organized crime ring. Their network, which stretched from Los Angeles to Savannah, Ga., used 118 shell companies in 25 states to pose as Medicare providers, billing more than $100 million, according to federal indictments in three states.”

Criminal gangs whose crimes of choice used to be drug dealing, stealing, and murdering are now finding that it is much more lucrative to be on the white collar side of the crime table.

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