Because That's Where The Money Is

Organized crime, meet Medicare fraud. Medicare fraud, meet organized crime. We're sure you'll get along famously.

Experienced in running drug, prostitution and gambling rings, crime groups of various ethnicities and nationalities are learning it's safer and potentially more profitable to file fraudulent claims with the federal Medicare program and state-run Medicaid plans.

"They're hitting us and hitting us hard," said Timothy Menke, head of investigations for the Office of Inspector General at the Department of Health and Human Services. "Organized crime involvement in health care fraud is widespread."

Los Angeles is among the hot spots for health care fraud, where Russian, Armenian and Nigerian gangs have been caught by federal agents.

Crime boss Konstantin Grigoryan, a former Soviet army colonel, pleaded guilty to taking $20-million from Medicare; Karapet "Doc" Khacheryan, boss of a Eurasian crime gang, was recently convicted with five lieutenants of stealing doctor identities in a $2-million scam, and last Thursday two Nigerian members of an organized crime ring, Christopher Iruke and his wife, Connie Ikpoh, were charged with bilking Medicare of $6-million dollars by fraudulently billing the government for electric wheelchairs and other expensive medical equipment.

As in crime, like with finance, if you simply go where the money is you'll find the best, most organized people running the best, most profitable outfits at the expense of everyone else. Darwinian enterprise at its finest.

Defrauding government-run health care programs involves stealing two types of identities: those of doctors, who bill for services, and patients, whose beneficiary numbers entitle them to medical care and necessary equipment. Criminals are expert at collecting both.

"That information is very, very valuable to these crooks. And the doctor may work at one clinic but he won't know about the 2nd and 3rd clinic that they've already set up using his identification," said Glenn Ferry, special agent in charge of the Los Angeles Region for the Health and Human Services Office of Inspector General. "They are definitely well-organized, well-schooled on how to commit Medicare fraud."

And the key of course is both finance oversight and medical fraud law enforcement are horrendously underfunded, yet the easiest to steal money from under precisely because prevention of crimes in both fields are considered an unnecessary expense by conservatives and free-market glibertarians who dismantled the protections in the first place.

The only difference between organized crime and the financial meltdown of the past 18 months is a couple orders of magnitude.