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11 Convicted of $19-Million Medicaid Fraud

January 22, 1986|United Press International

CHICAGO — Eleven doctors and medical workers were found guilty today of cheating the state Medicaid system out of more than $19 million in the largest Medicaid fraud trial in the nation's history.

Skokie pharmacist Morton Goldsmith and 10 others were convicted of racketeering and fraud charges for bilking the state Medicaid program by running "syrup houses" that illegally dispensed narcotic substances to addicts in Chicago's poor neighborhoods.

Goldsmith faces a possible sentence of life imprisonment upon sentencing by U.S. District Judge John Grady. A sentencing date was not immediately set.

The jury of two men and 10 women deliberated for five days after hearing two months of testimony in the trial of five doctors, three pharmacists, two medical technicians and a secretary charged with defrauding the state public aid system of $19.2 million.

22 'Syrup Houses'

The defendants operated 22 clinic-pharmacies called "syrup houses," which dispensed codeine-based cough syrup and a sedative that produce a heroin-like high when taken together.

To get the narcotics, drug users submitted to tests and accepted other prescription drugs they did not need to cover the illegal activity, prosecutors charged.

"They carried out unnecessary tests--sold lots of other items to camouflage the sale of narcotics," said special federal prosecutor David J. Stelter. He said the defendants ran a "public aid fraud mill."

"At their clinics, they distributed powerful narcotics to patient after patient after patient and billed it all to public aid. You saw who picked up the tab--the taxpayers," Stelter said in closing arguments.

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