About 400 arrests have been made in the last two years and hundreds more are expected in a crackdown on health care fraud in California by the state's four major FBI offices, officials said Thursday.
The investigation, coordinated with other federal and state law enforcement agencies, included a large-scale sting operation in Los Angeles. Targeting illegal kickbacks and false billing schemes, FBI agents set up their own "wellness clinic" in an office building in Encino and called it Western Comprehensive Care.
The Los Angeles effort, in which state and federal agents posed as doctors and former FBI agents posed as patients, was known as Durascam and began in 1998. Arrests were delayed until two years of undercover dealings with owners of medical supply companies and clinical laboratories were completed.
"Agents actually received about $180,000 in kickbacks," said FBI Agent Daniel M. Martino, who headed the Los Angeles operation. "To date we have made 23 arrests [in Durascam], and we have another 116 suspects under active investigation."
The suspects in the investigation offered kickbacks for the clinic to exaggerate or falsify documents justifying the need for such durable medical equipment as wheelchairs, oxygen concentrators and body braces, Martino said.
"Jesse James said he robbed banks because that's where the money was," Martino said. "Today the money is in health care, and these people want it. It's that simple."
Martino said the Durascam investigation turned into the largest undercover medical fraud inquiry in U.S. history because of its scope and the number of investigators involved. About 500 law enforcement agents and former agents took part, he said.
"It just keeps snowballing," he said. "It's still a very valuable operation, even though we shut down our clinic."
In the overall state investigation, there have been 396 arrests so far, in San Francisco, Sacramento and San Diego in addition to Los Angeles, officials said at a news conference.
"Nationwide we have an estimated $270 billion in fraudulent medical claims, and $7.5 billion in California alone," said FBI Assistant Director Ronald Iden, head of the bureau's Los Angeles division. "We are announcing this to shed light on the problem and to show the unprecedented cooperation."
Iden said FBI offices throughout the state are working with state agencies as part of the California Health Care Fraud Task Force on cases that include auto insurance fraud, false pharmacy billings, and Medicare and Medi-Cal fraud.
