18 arrested in alleged $33-million Medicare fraud schemes

For an ex-con fresh out of Chino State Prison, Donald Noyola seemed to be wildly exceeding expectations -- on paper, anyway.

Noyola was listed as president, secretary and chief financial officer of Sycamore Medical Supply Co. in Los Angeles, a small firm so busy that it billed Medicare for more than $1.3 million in reimbursements over nine months last year, court records show.

The trouble, prosecutors allege, was that Noyola's purported executive experience didn't represent a fresh start on a legitimate career path. Rather, it was merely another potential entry on his already established criminal resume, prosecutors say.

Noyola was a bit player in one of a series of alleged schemes intended to bilk Medicare of more than $33 million, according to federal prosecutors and indictments made public Thursday. Noyola, who will probably avoid prosecution in exchange for his cooperation in the case, helped provide a window into the shady world of Medicare fraud, which has been on the rise nationally but is particularly prevalent in Los Angeles and Miami.

Federal and state investigators fanned out across the Southland early Thursday, arresting 18 people allegedly engaged in various schemes involving the fraudulent ordering of power wheelchairs, hospital beds, feeding kits and specialized shoes for diabetics.

Clinic owners and medical professionals were among those arrested, authorities said. Still being sought is a Bank of America employee who allegedly helped hide the identity of one of the perpetrators of the fraud.

The arrests were made by the Medicare Fraud Strike Force, a team of federal and state investigators that began operating in the Los Angeles area earlier this year. Since its inception last year, the strike force has indicted 175 people alleged to have billed Medicare for more than half a billion dollars.

"We're talking about losing billions of dollars annually through fraud and abuse," said Kirk Ogrosky, the Justice Department prosecutor in charge of the strike force. "And all of us taxpayers are footing the bill for this."

Matthew Friedrich, acting assistant attorney general, said crackdowns like the raids Thursday would help protect the integrity of Medicare "for the more than 40 million Americans who rely on the Medicare program for health coverage."

Investigators used "real time" access to Medicare claims data to identify potentially fraudulent billing from among more than 10,000 medical equipment suppliers in the L.A. area.