BUSTED: Federal Agents Crack Medicare Fraud Operations in 5 Cities

July 16, 2010— -- Federal agents swept down on alleged Medicare fraud operations in five cities this morning, charging 94 people with submitting more than $251 million in false claims to the government. Agents executed search warrants and made arrests in Miami; Baton Rouge, La.; Brooklyn, N.Y.; Detroit and Houston.

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The defendants arrested today include doctors, nurses, health care company owners and a medical biller who alone was charged with submitting more than $49 million in fraudulent services.

The schemes worked this way: The government said doctors, nurses and health care professionals accepted cash kickbacks from medical service providers to approve services that were unnecessary or never delivered. Then the service provider would bill Medicare for the bogus services, including HIV infusions, home health care and physical and occupational therapy.

Medicare fraud results in an estimated $60 billion in annual losses for the government.

In an ABC News investigation last year, correspondent Pierre Thomas found some supposed Medicare medical providers had business locations that were in reality empty offices or warehouses, with no inventory and no services offered. Earlier this year, ABC uncovered a Medicare fraudster who was helping a drug cartel smuggle guns to Mexico, and an ethnic gang that was using violence and intimidation to get Medicare money.

Attorney General Eric Holder said today's arrests were the largest health care fraud takedown since a special Medicare fraud strike force unit was established in 2007. The task force pulls investigators from a number of law enforcement agencies, including the FBI.