Man at center of Fla. medical scam arrested

A fugitive at the center of a billion-dollar health care scandal was arrested in Spain on Wednesday, six years after fleeing the United States.

Miguel Recarey Jr., who ran International Medical Centers, fled while under indictment on fraud and wiretapping charges.

IMC, Florida's largest health maintenance organization, collected nearly $1-billion from taxpayers before collapsing in 1987. Regulators said $200-million to $300-million was never accounted for.

When the federal government ended its contract with IMC, in 1987, the plan had 136,000 members in Florida, including about 60,000 in the Tampa Bay area.

Recarey, who had links to Republican presidents and Democratic politicians, was arrested in Madrid, the FBI said. The Justice Department will work for his extradition to Miami, said Andrew J. Duffin, head of the FBI office here.

At one point in 1988, Recarey was living near Caracas, Venezuela, and FBI agents complained publicly that the U.S. government was dragging its feet on extradition.

Starting in 1981, Recarey relied heavily on well-connected lobbyists and friends to build a small Miami clinic into the nation's largest Medicare-certified HMO. He paid millions for lobbying, consulting and legal help.

All the recipients have denied wrongdoing, saying the payments and their activities were perfectly legal.

Among those receiving payments were President Reagan's former aides Lyn Nofziger and John Sears, the lobbying firm of President Bush's campaign chairman, the late Lee Atwater, and Bush's son Jeb.

Democrats also received money from Recarey, including the campaign of the late Rep. Claude Pepper, who even appeared in ads for IMC.

Receiving millions in legal fees were the law firms of former Gov. Reubin Askew, former state Attorney General Robert Shevin and a former aide to Sen. Bob Graham, all Democrats.

Jeb Bush, who this week announced his candidacy for governor of Florida, received $75,000 for an IMC real estate deal that never materialized. Jeb Bush has acknowledged making phone calls on behalf of IMC to Medicare officials but denied any impropriety.

"I asked that they be given a fair hearing _ that's not lobbying," he said at the time.

The explosive growth _ and later collapse _ of IMC was largely due to Medicare waivers granted by the federal Health Care Finance Administration after the lobbying blitz.

To ensure quality care, the agency had a rule that no more than 50 percent of any HMO's clients could be Medicare patients. But after heavy lobbying, HCFA chief C.

M. Haddow agreed to waive the rule for IMC, overruling his staff's recommendation. Haddow then left the agency and became a consultant, taking on IMC as a client.

IMC wound up with almost 80 percent Medicare clients.

Last year, Rep. Pete Stark, D-Calif., the chairman of a subcommittee that investigates Medicare fraud, demanded an investigation into why Recarey remained free.

"I look forward to the trial," Stark said. "Perhaps we will finally get the truth about what the political contributions bought (and) why and how wounded Contras were treated at his hospital and subsidized with Medicare money."

One federal whistleblower, Leon Weinstein, said the Reagan administration was using IMC to illegally funnel millions of dollars to the Contras rebels in Nicaragua. But the FBI said that, aside from treating wounded Contras in Miami, there was no evidence to support the allegation.

In April 1987, when IMC was receiving $360-million a year from Medicare, regulators stepped in and found the company was insolvent.

Recarey was indicted three times. One indictment said he paid off a union to get a health care contract. A second charged he wiretapped his own employees when the scandal broke. The third accused him of diverting Medicare funds to pay for his criminal defense.

Normally, criminal defendants in such cases are forced to surrender their passports and all their accounts and federal payments are frozen. Recarey, however, was allowed to keep his passport.

In August 1987, he received expedited federal tax refunds of $2.2-million, some of which he deposited in a Swiss bank in the Bahamas, according to his financial records.

He soon vanished.