White
Collar Crime Investigations
Asset
forfeiture often comes to mind in the context of
illegal narcotics investigations. These investigations
usually conjure mental images of major drug dealers
with connections to drug cartels who have amassed
incredible wealth from illegal drug trafficking.
Asset forfeiture continues to be used to seize
assets and proceeds derived from illegal narcotics
trafficking, but the FBI also uses asset forfeiture
in white-collar crime cases. These cases range
from fraudulent telemarketers who defraud elderly
victims out of their life savings, to doctors who
submit fraudulent claims for Medicare and Medicaid.
The individuals who match these descriptions may
be indistinguishable from your next-door neighbor,
they may be well educated, and they may already
be earning a six figure salary in a legitimate
business.
The FBI has responded to the alarming increase in white-collar crime by increasing
the number of Agents assigned to white-collar crime investigations, and by placing
increased emphasis on asset forfeiture in these investigations. White-collar
crimes include Health Care Fraud, Bank Fraud, Government Contract Fraud, and
Telemarketing Fraud. Asset forfeiture is incorporated into these investigations
to seize and forfeit assets acquired from the criminal activity, to act as a
deterrent to others contemplating similar activity, and to compensate victims
of the criminal activity. The FBI has been very successful in incorporating asset
forfeiture into white-collar crime investigations.
Health
Care Fraud
Health Care Fraud is an area of white-collar crime that has become a problem
of epidemic proportion. Losses attributable to fraud and abuse have been estimated,
by some, to be as much as ten percent of the nation's total annual health care
expenditure. These losses, particularly for Medicaid and Medicare, place a
tremendous financial burden on health care programs, affecting the lives of
millions of Americans who depend on these programs to pay for or supplement
their health care costs. The FBI is addressing health care fraud through investigation
of the most egregious offenders, enforcement of health care fraud violations,
and the use of asset forfeiture statutes in fraud investigations.
An asset forfeiture investigation is conducted in the early stages of fraud
cases to identify assets derived from fraud and, in some cases, the assets
laundered through financial institutions. Asset forfeiture statutes can be
included in indictments in order to proceed with criminal forfeiture. Civil
forfeiture statutes may also be used to seize property prior to conviction
to ensure that identified assets will not be disposed of or removed from the
jurisdiction of the court. Medicare, Medicaid and private insurance companies
who are victims of health care fraud can be compensated for their losses through
the petition process.
Case
Examples
The
FBI initiated a case against a company which defrauded
Medicaid out of more than $15 million dollars. The
company was billing Medicaid for services involving
the use of portable oxygen, when, in fact, limited
services if any were actually being provided to patients.
The owners of the company were reaping the benefits
of this fraud by purchasing luxury automobiles, home
furnishings, and real property. Much of the remaining
proceeds were laundered through bank accounts. Investigation
and financial analysis identified the proceeds of
the fraud. These proceeds were then traced through
various financial transactions to determine how the
proceeds were laundered. All identifiable assets
were included in the criminal indictment of
the defendants along with a money judgement equal
to the amount of the fraud. Subsequent to conviction
of the defendants, the judges ordered forfeiture
of all of the assets named in the indictment. These
assets were ultimately returned to the Medicaid
program pursuant to the petition process.
A
health care company that participated in the
Texas Medicare and Medicaid programs, and was
reimbursed for patient visits on a per-visit
basis, was investigated for fraudulent billing.
The investigation by law enforcement, including
the FBI, revealed that the company fraudulently
billed Medicaid and Medicare of more than $5,000,000
for purported in-patient hospital visits. The
doctors listed on the billing documents did
not work for, or provide medical services for,
the company and none of the patients purported
to have been treated was hospitalized during
the time period for which Medicare and Medicaid
were billed.
The investigation to identify assets in this case revealed the purchase of valuable
items including jewelry valued at almost $200,000, and expensive automobiles,
all purchased for personal benefit from the profits of the illegal activity.
These items were later seized and forfeited. Forfeiture proceedings were also
brought against seven parcels of real property valued at well over $500,000.
The forfeiture of these assets and conviction of a major participant in the scheme
served as a warning to those in the health care industry inclined to subvert
the system that, ultimately, crime does not pay.
An
owner of a clinic, and his office staff, were
treating patients from a large warehouse office.
He and his office staff were billing Medicare,
Medicaid and private insurance companies for
services that were most often not provided
to the patients. For example, a lawyer involved
in the scheme was filing for workman's compensation
insurance on behalf of some of the clinic's
patients for services that were not performed.
Also, the owner's accountant was in charge
of laundering the profits of these fraudulent
schemes. They are believed to have made a profit
of over $11 million dollars from the fraudulent
billing schemes.
An investigation of these fraudulent schemes resulted in the indictment and conviction
of the owner of the clinic, and the seizure of vehicles, jewelry, real property
and bank accounts, some of which were located in the Cayman Islands. A forfeiture
judgement for $11 million was included in the indictment, and investigative efforts
continue to trace additional assets to recover as much of the illegal assets
and proceeds as possible. The clinic is now closed and the owner is incarcerated.
This case is a prime example of using investigation, prosecution, and forfeiture
in a concerted effort to stop criminal organizations.
