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Feds: Cuban exiles made millions in false Medicare claims, then left

Eduardo Moreno, a Cuban immigrant, paid $445,000 for this southwest Miami-Dade home. He is accused of Medicare fraud.

Miami Herald

Eduardo Moreno, a Cuban immigrant, paid $445,000 for this southwest Miami-Dade home. He is accused of Medicare fraud.

MIAMI — Eduardo Moreno came to Miami from Cuba in 1997 with nothing.

A decade later the 40-year-old repairman owned a half-million-dollar home and bought his paramour a $106,000 second-hand Rolls-Royce Phantom.

Was he living the American Dream?


Instead, federal agents say Moreno's wealth was the product of a criminal phenomenon sweeping South Florida: multimillion-dollar Medicare fraud perpetrated by Cuban-American exiles.

Even more troubling, many jump bail and flee the country rather than face trial. Often they end up back in Cuba, out of reach of U.S. law enforcement.

Dozens of Cuban-Americans accused of bilking the government for as much as $1 billion were identified in court records by a Miami Herald investigation. One group used 85 phony medical equipment companies to file $420 million in fraudulent Medicare claims. Thirty-six accused scam artists fled to avoid prosecution, absconding with $142 million.

At least 18 — probably more — are believed to be in Cuba, with others in Canada, Mexico and elsewhere in Latin America.

"It's very frustrating for us. We'd pick them up and then we saw them bonding out and leaving the country," said Randall Culp, head of a health care fraud squad at the FBI's Miami office.

Most of the accused Cubans left the island in the 1990s as political refugees. "No one thought they were a flight risk," Culp said.

Medicare investigators began to notice a sharp increase in billing about five years ago, especially from "drug infusion" clinics providing intravenous medication for HIV patients.

"The numbers didn't jibe with our AIDS population," said Timothy Donovan, a senior Miami FBI agent in charge of white-collar crime. Agents calculate the infusion fraud alone accounted for about $1.5 billion.

An unusual number of Cuban-Americans showed up in their investigations. Among them was a former model, Leonardo Bolaños, 42, who allegedly operated two clinics on Miami Beach that racked up $5.2 million in claims in barely six months.

"It was a huge, huge scam," said Claudia Franco, director of the Miami office of the Center for Medicare and Medicaid Services, the federal agency that manages those health care programs. "They simply billed for services that were never rendered."

Before he could be arrested, Bolaños disappeared. FBI officials tracked him down in Canada and are seeking his extradition.

Soon after the crackdown began on drug infusions, investigators saw a spike in billing for medical equipment supplies, from wheelchairs to neck and knee braces. That's when they came across Moreno.

A Medicare inspector noticed he filed claims totaling $2.3 million in two months in late 2006 from one office he ran. In four cases the beneficiaries were dead. At the same time he filed $1.2 million in claims from another office, Faster Medical Equipment. The address turned out to be an unfurnished 6-by-6-foot "utility closet," containing buckets of sand, road tar and a wrench.

Moreno was arrested in April. Days later a judge ordered him to surrender his U.S. passport and set bail at $450,000. He posted bail and travel records indicate Moreno used his Cuban passport to return to Cuba, agents say.

The United States does not have an extradition agreement with Cuba, making the retrieval of wanted criminals hard.

Cuba does cooperate with the United States in some limited areas, such as fugitive sex offenders, drug smugglers and repatriation of Cuban boat people by the U.S. Coast Guard. The State Department confirmed it does "request assistance from the Cuban government from time to time with respect to U.S. fugitives." But it said it cannot discuss specific cases.

Community leaders are not entirely surprised that some immigrants have become so quickly entangled in elaborate crimes. While most Cubans are honest, hard-working people anxious to get a new start in life, the transition often isn't easy.

"People who leave Cuba are brought up on a culture of stealing from the state and generally getting away with it," said Uva de Aragón, a director at Florida International University's Cuban Research Institute. "They want to come here, but don't have much means when they get here, so when they see a chance to make some easy money they might grab it."

FBI agents say schemes usually involve a more experienced immigrant with at least 10 years in this country, who often recruits newly arrived Cubans to operate as front men, or as fraudulent beneficiaries.

Over the past year, judges have gotten tougher, ordering higher bail and sometimes pretrial detention. A judge recently sentenced one Cuban-American woman to 30 years for her role in a Medicare fraud scheme.

But fleeing doesn't always mean a clean getaway. FBI officials have gotten word that Moreno may not be so comfortable in Cuba.

In fact, he and three other fugitives may be in jail.

Times researcher Caryn Baird contributed to this report.

Feds: Cuban exiles made millions in false Medicare claims, then left 02/28/09 [Last modified: Monday, March 2, 2009 7:05am]
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