Back in the days when we were at the U.S. Attorney’s Office, we used to occasionally hear jokes about the fact that “we don’t catch the smart ones.” This kind of comment would usually come after we might have come back from court in a case where the accused did something so colossally stupid to almost guarantee his or her getting caught — like writing a bank robbery demand note on the back of his pay stub. (Yes, that really happened in one of my cases.)
The joke was a kind of tacit acknowledgment among us that with all the crimes out there to investigate, and all the many different priorities of law enforcement, smart criminals know how to cover their tracks a little more intelligently, or at least to avoid steps that will put them on the immediate radar screens of investigators and prosecutors.
Fortunately for prosecutors everywhere, stupid criminals abound. And by stupid, we don’t mean poorly educated. We mean, in many instances, so blinded by their own greed and self-delusion that they can’t understand how their behavior will look to the rest of the world.
Last week, a 63 year old physician in sunny Florida was sentenced to 17 years of non-parolable time in prison (the judge seems to like round numbers, like 80), for having bilked Medicare of at least $73 million in a five-year period between 2008 and 2013. That’s roughly $14 million per year, or more than $1 million per month of fraud.
Dr. Salomon Melgen had been considered a prominent eye doctor. But something went terribly wrong along the way for the Harvard-trained physician. In a two month trial last November, the government proved a vast pattern of bilking the taxpayers, primarily Medicare, for unnecessary treatments and tests, for “upcoded” bills and the like, totaling 67 criminal counts of conviction in all. His pretrial release was revoked upon conviction and he’s been in custody since November. A week and half ago, in late February, the sentencing judge held a hearing to determine, among other things, the extent of the loss to taxpayers. The government argued for $136 million; the judge found that $73 million had been proven. See http://wapo.st/2GXMCXd. It was that same day that the 17-year sentence was handed down.
While every case is different from every other, there are some familiar patterns here.
First, our trillion-dollar-per-year health care economy is run, at least with respect to government insurance programs, on an honor system. For the most part, claims that are submitted get paid, and problems that are identified get chased later. (This is the so-called “pay and chase” system.) What that means, as Dr. Melgen proved, is that defrauding Medicare and Medicaid is pretty darned easy. An up-coded bill here, an unnecessary test there, pretty soon it’s real money.
Second, as most prosecutors will tell you, greedy people don’t suddenly stop being greedy after they’ve had a taste of their ill-gotten gains. They usually acquire a taste for more. Sometimes they just can’t hold back, which seems to have been the case with Dr. Melgen. Now it’s not just the occasional upcoded bill, but masses of them. And not the occasional unnecessary test, but a raft of them. Fancy houses, fancy cars, fancy connections to politicians… a taste of life in the fast lane.
Next thing you know, however, you’re on some law enforcement agent’s radar screen. Some patient might have complained. Some whistleblower might have noticed your up-coding.
And now that Florida retirement is looking so, so different.