Two U.S. senators and a representative worry that billions of tax dollars could be going to Cuba and other foreign countries via criminal schemes designed to defraud Medicare and Medicaid.
The schemes often involve the use of “nominees,” individuals who are paid to be fronts for the actual owners of corporate entities being used in the fraudulent operation. By concealing the identities of true owners, the approach invites its use to funnel tax dollars out of the country.
In a letter made public yesterday to Marilyn Tavenner, acting administrator of the Center for Medicare and Medicaid, senators Orrin Hatch, R-UT, and Tom Coburn, R-OK, were joined by Rep. Peter Roskam, R-IL, said they fear billions of tax dollars are being lost annually as a result.
“Clearly, the program vulnerabilities that facilitate billions of dollars to be stolen from the Medicare program each year also allow for some of that money to be funneled to foreign countries,” the three congressmen said.
“While the fraud itself is unacceptable, the loss of American dollars to foreign countries because of flaws in our system is totally unacceptable. The American people deserve the peace of mind to know that federal officials are doing everything they can to safeguard taxpayers’ dollars and the Medicare program.”
“Thus far, it does not appear that CMS has addressed the concept of nominee owners, false storefronts, and shell companies in any of its enrollment regulations or its Provider Screening statement of work,” they said.
Earlier this week, federal officials in Miami charged Oscar Sanchez in connection with a criminal operation that resulted in an estimated $31 million going to 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,” the Miami Herald reported Monday.
“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,” the Herald said.
Also earlier this week, federal officials announced the capture of two other individuals who had been involved in multi-million dollar frauds with overseas connections. In one, Irina Shelikhova was arrested Monday at JFK Airport in New York when shetried to re-enter the country from the Ukraine.
“From approximately March 2005 until July 2010, Shelikhova and her co-conspirators allegedly paid cash kickbacks to Medicare beneficiaries to induce them to receive unnecessary physicians’ services, physical therapy, and diagnostic tests at the medical clinics,” according to the Inspector-General of the Department of Health and Human Services.