Fraudbuster!

Yet Weinstein says officials from the inspector general's office at HHS have repeatedly tried to scare him away from the lawsuits by accusing him of stealing government documents. A criminal investigation of Weinstein by HHS, begun in 1989, is still under way. Weinstein calls it a bumbling attempt at intimidation.

U.S. Justice Department lawyers today call Weinstein a money-hungry "parasite," and have argued that he should not be allowed to share in the money recovered by his court actions. The issue of whether the former fraud investigator can be rewarded in his free-lance litigation may be destined for the Supreme Court. If Weinstein wins, he will be the first government employee in the nation to do so, and likely will create a slew of new litigation by other so-called whistle blowers within federal, state, and local bureaucracies. For the moment, Weinstein says, his unique retirement hobby has put him $20,000 in debt.

South Florida is filled to capacity with elderly people in various stages of failing health. Many of them depend on the 27-year-old federal Medicare program to pay for everything from wart removals to brain surgery. To ensure that this vast assistance program functions properly, that older Americans receive the safe, high-quality health care they have come to count on, and that the constant flow of federal funds is not diverted by white-collar thieves, a special Medicare police force was set up in 1977.

In South Florida the HHS Office of the Inspector General consists of four thick-necked men who spend most of their days in a cramped North Dade office. The men do not wear uniforms or guns, and they have no arrest powers. The office where they work contains no fax machine, and there is no secretary to answer the telephones or assist with the reams of paperwork that pour in. The nearest supervisor is in Orlando. None of the four government agents who work in this office speaks a word of Spanish.

In the Seventies, when Leon Weinstein began working here, the office was pretty much the same, except that it was located in Fort Lauderdale, there was a secretary, and fax machines hadn't yet been invented. Soon after he arrived in South Florida, Weinstein's career began to intersect with that of another newcomer, a Cuban immigrant named Miguel Recarey, Jr. Now recognized as one of the most audacious and crafty con men of our time, Recarey was running a small group of clinics named International Medical Centers (IMC). In August 1982, when Recarey won a new government contract to supply Medicare services to elderly patients, his company began to expand feverishly, fueled by high-pressure salesmen and glitzy billboard ads featuring nationally known entertainers such as George Burns and Barbara Mandrell. At its height in the mid-Eighties, Recarey's health maintenance organization was the nation's largest. With approximately 200,000 patients across five South Florida counties, the firm by then was receiving a $30 million check from the U.S. government each month.

Federal investigators now know that Recarey pocketed millions of taxpayer dollars that were supposed to go to doctors working in IMC franchise clinics. They estimate that in six years Recarey increased his personal fortune from $1.5 million to $100 million. Financially squeezed by Recarey's thieving, doctors at many of IMC's 179 affiliated medical centers began cutting costs any way they could. Arthur W. Goulet, one of a score of high-ranking U.S. government health officials who jumped ship and went to work for Recarey in the early Eighties, described one IMC clinic to a House subcommittee in December 1987:

"IMC had opened a new medical center in the Edison-Little River area to serve the Haitian population. This building was a forbidding-looking converted warehouse entered by an iron-barred door. For months this center functioned without essential medications or supplies such as medical record forms or even sheets to drape [gynecological] patients. Other IMC medical centers were cheap storefront conversions, such as the center in Hollywood, or the one at Westchester which had been a fast-food restaurant."

Besides running clinics out of defunct fried-chicken joints, IMC franchise owners were doing something to cut costs that was more malevolent, and more subtle - so subtle that it wasn't until the spring of 1986 that Leon Weinstein was able to catch them at it.

Part 2

The terms of the contract between Recarey and the U.S. government gave IMC a flat rate of about $300 per month for each Medicare patient the firm signed up. Recarey was phenomenally successful in recruiting elderly South Florida residents because he promised to cover all their medical needs, including things that aren't commonly reimbursable under Medicare, such as eye exams and prescription drugs. Ironically, both the government contract and the design of IMC's own marketing campaign made it financially advantageous for clinics to provide as little medical treatment as possible. After all, IMC would receive the same $300 per month per patient regardless of whether the person underwent an expensive kidney transplant or never set foot inside the clinic.

With Recarey pocketing as much as half of the Medicare reimbursements - and attributing to "administrative expenses" what often amounted to embezzlement - IMC clinic doctors who should have received the funds became desperate to find ways to avoid performing operations or other expensive medical procedures. Federal law required the doctors to accept any patient who wanted to join the health maintenance plan, but the temptation became enormous to somehow weed out the already infirm recruits from the generally healthy ones. Clinics began urging new patients to undergo a "routine" physical exam and a battery of diagnostic tests after they had signed up for the IMC program, but before the effective starting date for services.

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