Taxpayers Funding the 'Good Life' for Criminals

May 6, 2009— -- "It's faster and easier than selling drugs."

Those are the words of a convict, once a Miami drug dealer, who left the street life to participate in a scheme to make even bigger money: Medicare fraud.

And it worked. In seven years, he estimates he made about $8 million.

"Ferrari, Porsche, Lamborghini, exotic cars -- had a nice, I lived a good life," said the man, who is now serving time in a federal prison for his crimes. The FBI requested that ABC News not use his name or share the details of his case because he is a cooperating witness for the government.

But that good life, paid for with money stolen from Medicare, came at a cost to taxpayers.

"We would make anywhere between a million to $2 million in a short time frame, maybe two, three months," he said.

The scam was simple. He set up phony businesses and billed Medicare for millions of dollars in medical equipment he never sold. His scam was just one example of the many fraudulent schemes criminals have used to bilk Medicare of taxpayer money.

The National Health Care Anti-Fraud Association, a public-private partnership dedicated to fighting such crimes, says that fraudsters are able to take down an estimated $68 billion a year, and the group says that estimate is a conservative one.

ABC News traveled to south Florida, where bogus companies in three counties in that part of the state have taken in more than $1.5 billion in the last three years -- and that figure includes only those operations caught by law enforcement.

Federal agents recently carried out Operation "Wack-A-Mole," in which they made unannounced visits to the 1,581 durable medical equipment businesses in the area. They found that a third of them -- 491 -- were phony, even though they were billing the government.

"My friends were doing it," the informant said. "And I was growing pot at the time and they said, 'stop what you are doing and this is faster money and easier money.'"