Delay Lets Military Health Fraud Suspects Off Hook

By: By RYAN J. FOLEY
By: By RYAN J. FOLEY

MADISON, Wis. (AP) - A dozen defendants who allegedly swindled the military's health care program out of hundreds of thousands of dollars in the Philippines won't face justice or pay any restitution after authorities failed to arrest them.

The U.S. Attorney's Office in Madison, Wis., has dismissed
indictments against the suspects - Philippine doctors, spouses of
military retirees and one Navy veteran - because of lengthy
pretrial delays.

Several of them had confessed to their roles in schemes in the
1990s and early 2000s in which they filed fraudulent claims to the
military's Tricare program, which paid out money to cover health
services never provided, court records show. They were indicted
between 1999 and 2003 as part of an investigation into widespread
Tricare fraud.

But U.S. authorities failed to bring them to justice. They
decided to wait for the suspects to step foot on U.S. soil so they
could be arrested but they either never did or weren't caught. In
2006, prosecutors finally asked the Philippines government to
arrest and extradite five of the suspects but those attempts
failed.

The 12 cases were dismissed last month after U.S. District Judge
Barbara Crabb in November threw out an indictment against a
Filipino doctor accused of submitting $2 million in fraudulent
claims. Crabb said his right to a speedy trial was violated because
investigators waited until 2008 to arrest him when he set foot in
Guam, four years after he was indicted.

Crabb said the delay made it difficult for the doctor to prepare
a defense because the passage of time meant the memories of
witnesses had faded. She said prosecutors' "decision to do nothing
for more than four years" wasn't justified.

Based on that ruling, Assistant U.S. Attorney Peter Jarosz said
it was clear he had to dismiss cases against the others. He said it
is difficult to quantify the exact amount they were accused of
obtaining fraudulently. Court documents suggest it was at least
$400,000 but likely more since prosecutors did not file charges for
every suspect claim.

Among those getting off the hook is a doctor who told
investigators how she would make false claims on behalf of military
retirees and their dependents and then give them a portion of the
money.

She gave investigators two log books filled with the names of
patients her clinic had falsely claimed to treat. "I know it was
fraudulent but I just took the risk," she told investigators.

Also getting off:
- A U.S. Navy retiree, who was accused of working with a doctor
to submit 21 false claims for him and his dependents totaling
$133,000.
- The wife of a retired Marine who submitted false claims
totaling $49,000 for her and her child.
- The wife of a retired U.S. Air Force serviceman who said she
used her windfall to pay for her children's education. "I know
what I am doing is wrong," the woman told investigators.

The defendants never appeared in U.S. court or even had defense
attorneys since the cases never got off the ground.

Prosecutors have defended their decision not to seek extradition
in some cases, arguing the Philippines government would likely fail
to execute the request or botch it. They cited one example in which
a suspect learned of his warrant through a newspaper and went
underground.

In November's ruling, Crabb wrote the decision to wait for
suspects to step on U.S. soil might have been reasonable initially
"but as time wore on, it became all the more pressing for the
government to do something."

The ruling and dismissals were a setback for an investigation
that has otherwise won praise. More than a dozen people have been
convicted of Tricare fraud in recent years, including U.S. military
retirees. The probe is handled by Wisconsin-based federal
prosecutors because WPS Health Insurance in Madison holds the
contract to process many of the claims.

In the biggest case, Health Visions Corp. submitted fraudulent
and inflated claims to bilk the U.S. government of $100 million
between 1998 and 2004. The company and a former executive have been
ordered to pay back the full amount and the government is in the
process of trying to recoup some money from the sale of its assets.

A string of internal audits have faulted the Pentagon's
management of Tricare, warning that lax controls make the program
vulnerable to fraud overseas. Its managers say they are taking
steps to tighten them but note the complexity of a program that
provides benefits all over the globe.


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