Uncle Strikes Back
The bust took 18 months of sleuthing. Starting with a tip in late 1974, federal investigators painstakingly pieced together the facts of an intricate $20 mil lion Medicaid scheme and indicted 16 people in Chicago two weeks ago. By last week six of them had pleaded guilty, and one indicted doctor had committed suicide. The case is the latest example of the fastest-growing form of white-collar crime: ripping off Uncle Sam's multibillion-dollar social-welfare programs. But with the Chicago indictments, Uncle also served notice that he is finding new ways to strike back.
After an Illinois public aid worker first reported his suspicions, U.S. Attorney Sam ("the Hammer") Skinner, 38, put two lawyers and three FBI agents on the case virtually full time. They found a tangle of doctors, clinics, medical labs and pharmacies that hauled in fat Government payments and fed kick backs to one another for unnecessary or fictional patient examinations, clinic visits, tests and prescriptions. The investigation was maddeningly difficult because both patients and personnel at the ghetto health centers tended to be transient, and the fraudulent paper work involved was hard to track in the disarray of federal and state bureaucracies. But Skinner quickly became convinced that he had "just scratched the surface." So 15 months ago, he created the Governmental Frauds Unit--first federal effort of its kind in the nation.
Thus far it has secured some 100 criminal charges and 50 convictions, with many of the cases still in the works. Skinner judges the unit so successful, he recently expanded the original staff of four lawyers to nine. The young attorneys (average age: 30) are able to do much of their own investigating, which lets "us go looking for trouble," says Skinner. They use such standard devices as offers of immunity or plea bargaining to get their information, and they have found a new tool: the 1970 Racketeer Influenced and Corrupt Organizations statutes (RICO). Originally aimed at the Mafia, the laws provide for the seizure of certain of a convicted offender's assets in addition to fines and prison terms. The aim: to put the defrauders out of business as well as punish them.
No Questions. Skinner is currently trying to RICO not only the accused Medicaid-fraud conspirators but a group of five nursing homes and two pharmacies also charged with Medicaid fraud, and Chicago's Tyler Barber College. The barber school scam particularly rouses Skinner. It, involves allegedly false Veterans Administration claims from dozens of otherwise "good citizens": fire men, policemen, Chicago transit workers and Federal Government employees who shared their V A monthly education benefits ($216 to $398) with the school but never went to class or snipped a hair. Worries Skinner: "With the potential for fraud so easy, the 'get mine' attitude can spread. It can destroy the moral fiber of a community."
Despite the enormous number of forms required in such programs, complains Unit Chief Bill Elsbury, 31, "Government has made little effort to check the validity of the payout. If a bill is submitted, questions are rarely asked." Skinner agrees. Says he: "As long as Congress continues to mandate new programs without adequate controls, the problem will be with us. It is a gold mine for rip-off." But he cites one cause for hope. Deputy Attorney General Harold Tyler, who heads a Justice Department committee on white-collar crime, met recently with top officials of federal departments to plan a nationwide attack on the problem. The lessons and tactics learned by the Skinner squad should make the assault easier.
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