Tuesday, June 19, 2012

Feds in Miami: Millions stolen from Medicare wound up in Cuban banking system

Posted on Monday, 06.18.12

Medicare fraud

Feds in Miami: Millions stolen from Medicare wound up in Cuban banking

Miami federal prosecutors say they uncovered an international
money-laundering operation that moved millions in stolen Medicare
dollars to Havana's banks.
By Michael Sallah

In an unprecedented case, federal prosecutors have charged a Miami man
with engaging in a massive money-laundering operation that moved
millions stolen from the federal Medicare program into Cuban banks.

Prosecutors say Oscar Sanchez, 46, was a key leader in a group that
funneled $31 million in Medicare dollars into banks in Havana — the
first such case that directly traces money fleeced from the beleaguered
program into the Cuban banking system.

Most of the money moved through an intricate web of foreign shell
companies before ending up in Cuba, to avoid being detected in the
United States, said investigators.

"We're obviously dealing with a very sophisticated network," said Ron
Davidson, an assistant U.S. attorney, during a court hearing on Monday.

The federal investigation marks the first time prosecutors have brought
a cash-for-Cuba case in the ongoing battle against Medicare fraud in
South Florida, which leads the nation in dollars fleeced from taxpayers.

Despite arguments from Sanchez's lawyer on Monday that his client was
not a flight risk and has family ties to Miami, U.S. Magistrate Jonathan
Goodman ordered the defendant be held without bail.

"The fact that [he] has made more than 78 trips out of the country over
the years" was a major reason, the judge said.

For years, Sanchez was a player in a global money-laundering
organization that spanned from Montreal to Havana, prosecutors said.

Though no one else has been charged so far, prosecutors say Sanchez, who
owned a check-cashing business, was in a position to launder millions in
government checks and wire payments doled out to crooked providers
between 2005 and 2009.

He was charged last week with one count of conspiracy to commit money

"Oscar Sanchez was a financier for fraudsters and a capitalist for the
Cuban banks," prosecutors said in a court motion.

While Sanchez was a target of the ongoing investigation, prosecutors say
dozens of crooked Medicare providers — who offered HIV and medical
equipment services — all took part in the laundering scheme set up for
one reason: To hide the money.

15 accounts

With millions pouring in from Medicare, suspects opened 15 bank accounts
in Canada and Trinidad to move the money from the United States, court
records state.

In one major tactic, the ringleaders plunked down millions to buy reams
of money orders — 20 boxes in all — and then put the money into an
account in the Royal Bank of Canada in Montreal. To make the purchases,
they used a host of names, including a famous alias: Bill Clinton.

Then, after the money was concealed in the bank accounts, it was
immediately wired to several accounts at Republic Bank in Trinidad.

Investigators later found out that the accounts were not actually opened
in Trinidad, but at the branch of Republic bank in Havana, records state.

In addition, the bank had firm instructions on two of those accounts to
wire all the money immediately into the Cuban banking system.

So far, prosecutors, who are gathering their information from financial
records and unnamed witnesses, said they have traced $63 million into
Cuban banks — nearly half tied to Sanchez's case.

"This is not a traditional money-laundering case," prosecutors said.

One reason that the rogue healthcare providers turned to Sanchez was
because he acted like a money machine: providing much-needed cash to
them while they were waiting for their money to be laundered,
prosecutors charged.

Fast, efficient

"The defendants' money laundering operation was faster, more efficient,
and financially benefitted everyone involved, including [Oscar Sanchez],
who charged a fee for his services," prosecutors wrote.

In all, 70 medical company owners in South Florida submitted more than
$374 million in claims to Medicare, and were reimbursed about $70 million.

Many of those providers wanted to withdraw their proceeds in cash to
"purchase luxury items or to pay illegal kickbacks," Davidson wrote.

Though prosecutors charged that Sanchez would be a flight risk if
released on bail — saying he traveled from the country 78 times since
2002 — defense lawyer Peter Raben said most of the trips were to Mexico
where his client owned a condo.

He said charging Sanchez in the international money-laundering ring was
"a big red herring" to taint his client, who has no prior convictions.

Prosecutors say Sanchez was part of a much larger scheme to get money
into Cuba, a Communist country that does not extradite fugitives from
the United States.

As part of the Sanchez case, prosecutors are asking the court to seize
seven homes he owns in Miami-Dade, Lee and Collier counties as well as
two vehicles to recover the millions in laundered money.

Experts who have watched Miami-Dade emerge as the nation's Medicare
fraud capital say the Cuban government's involvement would not be too
far-fetched — though they have no proof to back it up.

Andy Gomez, a senior fellow of Cuban studies at the University of Miami,
said he has heard from sources in Miami and Cuba that the Castro
government extorts Medicare bounty from criminals who are allowed to
travel freely between here and the island nation.

More than two dozen people charged with Medicare fraud have fled back to
Cuba over the last five years, and many more are suspected of hiding there.

"The Cuban government knows what's going on,'' Gomez told The Miami
Herald last year.

"The government knows who the fugitives are, and the bigger they are,
the more the government expects to be paid by them … It's a way to
obtain hard currency and a way to discredit the Cuban-American exile

Yearslong probe

Kirk Ogrosky, a former lead prosecutor of Medicare fraud, said the
latest case comes after years of investigation into the Cuban connections.

"U.S. taxpayer money intended for Medicare has been flowing out of South
Florida for decades,'' Ogrosky said. "If the Department of Justice
really wanted to stop this mess in Miami, they would explain to the
elderly how their participation in these schemes help support the Cuban
government and Castro's people.

"Some portion of whatever is left over gets funneled out of the U.S. to
places like Cuba, where American taxpayers have no chance of getting it


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