More Medicare fraud is now committed by organized crime, as gangsters find it, in Roy's words, "safer than, for instance, dealing drugs or engaging in racketeering activities."

"They find it easier as well," he added.


Over the past few years, Roy says they've seen stepped up activity by Eurasian gangs in Southern California, loose-knit groups in Miami, and Nigerian-connected outfits in Texas.

And with mafias come territorial feuds, and violence, Roy says. After investigators clamped down on Eurasian gang-run health care fraud in Los Angeles, Roy said members fled to Phoenix or Las Vegas, where they then wrestled for control of the lucrative Medicare scams in those cities.

Typical scam

Would-be Medicare scammers often target nursing home facilities or other areas they know there'll be a high density of beneficiaries, the OIG says.

Some crooks, known as "cappers," drive around in vans, taking elderly patients to clinics under the ruse of offering them a legitimate medical service. Sometimes, they'll even give free groceries to needy seniors as a way to trick them into providing their information. A small number of beneficiaries even take a cut of the scam.

"Overall, these individuals recognize that there are some vulnerabilities with our Medicare beneficiaries. They prey on those vulnerabilities -- cultural barriers, language barriers," Roy said.

But they also go after doctors, whose provider numbers are needed to file the dubious claims.

In Southern California, where Roy led investigations on organized crime and health care fraud until a few years ago, a typical trap for doctors would go like this: a crime faction would take out an ad in the local paper, saying it was looking for a doctor to oversee a new clinic. A physician would see the ad, and show up at the clinic for an interview.

At the interview, the crooks get the doctor's social security number, date of birth and Medicare provider number, all of which they use to set up a phony bank account under the doctor's name, and to submit fraudulent claims to the Centers for Medicare and Medicaid Services.

On some occasions, the doctor is complicit, netting a $5,000 monthly payout for "oversight," Roy says, but more often than not the doctor is an innocent gull in the crooks' plot.

The criminals then use this number to file claims for roughly 90 days, the time it takes for Medicare to catch on that something's fishy. By that point, the gang will often ditch the provider number and any associated cell phones, and walk away from the bank account, Roy says.

Fighting back

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