Fraudbuster!

If you drive from Miami up to Surfside and park in the shade of a certain palm tree near the fashionable Bal Harbour Shops, you can watch Leon Weinstein coming home to his bungalow at midday. He appears in a heat shimmer at one end of Carlyle Street with Peppi, a little dog of indeterminate breed with bulging, solicitous eyes. Man, slightly bowlegged, is careful not to overtake beast, who pants and waddles faster and faster as the pair nears home. Peppi wears rolls of fat under his fur coat; Weinstein, fresh from his morning tennis game, wears a Polo shirt, white shorts, and sneakers. It's a vision of happy retirement years in a quiet corner of Florida's Gold Coast: The 59-year-old Weinstein, strolling home with his companion, looks vaguely foolish and utterly relaxed, two states of being he hasn't often known. Here is a man getting used to a $2000-per-month pension, not yet comfortable with Polo shirts and tennis and sunny subtropical indolence.

Inside Weinstein's modest one-story house, you see bookshelves lined with pet-care manuals. A mother cat convalesces with her kitten in one bedroom, recovering from an operation. Peppi disappears from view, and another dog starts barking from behind an unseen door. Is Weinstein the cat lover in the family? "If it was up to me, they'd all be out of here tomorrow," he says, pouring himself a soda. Is he, then, the dog lover? "I love my wife," he says matter-of-factly. "And she's crazy about dogs. I can take 'em or leave 'em." Up close, Weinstein is a gnome with a good tan and a jack-o'-lantern face - rosy cheeks, big jaw, pointy ears, gaps between his top front teeth, flickering, blue-gray eyes. A big stainless steel diver's watch encircles one wrist, the phosphorescent hands glowing dimly in the shadows of the living room. When you first sit down with him, you're likely to be distracted from examining his physical appearance; the great Bronx music of his voice grabs your attention, churns the air around him, rising to surprising heights, then plunging to near-whispers. He's so animated, choosing his words well and gesticulating often with his arms, that it's some time before you notice the broad delta of worry lines spreading out from his eyes.

The worry lines grew slowly out of a career of scrutiny and suspicion. For 34 years Weinstein labored in the lower echelons of that biggest of all federal bureaucracies, the Department of Health and Human Services. In 1955 he began evaluating Social Security applications from an office on 125th Street in New York City, back when Harlem was still a place where you could take a bag lunch to the park. In 1989 he retired in Miami as a senior special agent in the department's Office of the Inspector General, having spent more than a decade here chasing unscrupulous South Florida doctors through a maze of computer files and audits and paper trails to develop Medicare fraud cases against them. His efforts in sending corrupt physicians to prison won him a commendation from Assistant Attorney General Benjamin Civiletti in 1977 and another from FBI Director William Sessions in 1988. "We've never encountered anything like Leon," says a Miami lawyer who uses Weinstein's consulting services. "His area of law enforcement is extremely complex and specialized, and he's simply the best there is at it." Says a former colleague, who still works for the Department of Health and Human Services: "Leon thought he was God's gift to the criminal investigative field. He was a goddamn prima donna. But I won't say he didn't know what he was doing. The truth is, he was good."

These days Weinstein isn't just playing tennis, and his memories of an honorable civil service career are more rancorous than they might have been had he left government work a few years earlier. Since leaving the Department of Health and Human Services (HHS), Weinstein has persisted in claiming that his old bosses in the inspector general's office concealed evidence and obstructed justice in cases involving millions of dollars of Medicare fraud. Without solid proof, but with an alarmingly plausible set of speculations, Weinstein contends that Inspector General Richard P. Kusserow and then-Regional Inspector General Robert A. Simon blocked his efforts to pursue major medical fraud in South Florida. Weinstein's theory of motive: White House officials persuaded Kusserow to conceal an elaborate scheme involving a Miami hospital that treated wounded Nicaraguan contra soldiers.

Under the provisions of an obscure Civil War-era law, Weinstein as a private citizen has filed lawsuits against more than 50 South Florida health care providers, seeking to recover for the U.S. government an estimated $118 million he says doctors and clinic workers stole from taxpayers through false billing and other illegal practices. So far three of Weinstein's lawsuits have been settled, and at least $540,000 has been returned to federal coffers. Weinstein's lawyers expect two more settlements in the next month to raise that figure to at least one million dollars.

The False Claims Act, created in 1863 to discourage fraud by suppliers of war goods, was amended by Congress in 1986 to allow virtually anyone who discovers or suspects government fraud to sue - and to share in up to 25 percent of the monetary recovery from any successful outcome. Often the lawsuits emanate from workers in the defense industry who catch their bosses or fellow employees cheating on government contracts. Assistant Attorney General Stuart Gerson, who last year called the revised False Claims Act "the government's primary weapon in fighting fraud," notes that since 1986 more than ten percent of the fraud recoveries by the government have been due to private citizens who filed lawsuits. Of $70 million recovered, about $9 million has gone to the citizens who initiated the actions. In an order entitling Leon Weinstein to five percent of the proceeds in one settlement, Chief U.S. District Judge Lawrence King wrote in August 1990: "Ultimately, what appears to have happened in this case is, after seeing no effective action taken by the government, [Weinstein] filed the suit. This appears to be exactly what Congress intended [by its 1986 amendment of the False Claims Act].... The $160,000 settlement may never have been reached but for [Weinstein] filing the...action."

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.

"Once they got the chest X-rays, they might say, `Hey, this guy's got a spot on his lung - we better lose his application,'" Weinstein explains. "They never bothered to tell them they might be dying. These people were walking time bombs." Not only did the clinics save money by secretly using the exam to target sick patients for rejection, but they also made money by billing the exams and tests to Medicare. Both practices are blatantly illegal.

Miguel Recarey, Jr., was eventually indicted by a Miami federal grand jury, which found sufficient evidence that he had bribed union officials to sign up IMC patients from the ranks of organized labor, and had run an illegal wiretapping operation against his own employees. Shortly before he was to go to trial in Miami in 1987, Recarey fled to South America with his family. Today he is said to travel widely in Europe and Latin America, returning to a home base in a posh suburb of Caracas, Venezuela. But while the chief of IMC was on his way to becoming a high-profile target for a host of federal investigative agencies, Leon Weinstein was immersed in the separate and far less glamorous matter of decoding the shadowy finances of the individual IMC clinics.

Though anonymous tips from patients and clinic workers had been filtering into Weinstein's office for years, he had been unable to prove any wrongdoing. But in February 1986, the manager of an IMC clinic came to Weinstein in tears. "She said, `I can't take it. I have to tell you what's really going on,'" Weinstein recalls. "And she did, for about three hours. I got a search warrant. We went out, we grabbed the records. And we saw that they had torn up all the applications of people they had determined were sick. But they did something stupid. They photocopied each application and left a copy of it in their files."

Weinstein says the owner and operator of the clinic, Dr. Cristino Enriquez, had kept the photocopies to safeguard against possible complaints. If a rejected patient ever complained to federal authorities, Enriquez could simply say the application had been misplaced. But the plan backfired. "That was the break," Weinstein recalls. "That was how we opened the whole can of worms. We went out and we started hitting other clinics. I developed a computer audit that showed exactly what Enriquez was up to. It showed that immediately before a particular patient joined the IMC program, he had a series of tests by a doctor he had never seen before. Then there were others who never went on IMC, but who did have the tests. Those are the ones who we contacted, and those are the ones who were sick.

"And that's when they started wanting to take me off the case."
By late spring of 1986, slow afternoons in the tiny South Florida satellite office of the HHS inspector general were a thing of the past. Weinstein and his four colleagues opened several new investigations of IMC doctors. Weinstein also believed doctors at a Miami-based IMC competitor, Comprehensive American Care Inc., were engaging in a similar pattern of Medicare fraud. He urged his superiors to establish a task force to deal with the burgeoning IMC investigation.

The task force, dubbed Project Minicare by Weinstein, was born in late summer. Several out-of-town HHS investigators were brought in, along with two special agents from the FBI. Extra office space was leased. But Weinstein quickly noticed that his reinforcements were oddly lacking in Medicare expertise. Several of the HHS agents were Social Security experts. Others were recent transfers from the Navy and the Secret Service. Jack Petersen, the FBI man put in charge of the operation, was known as an intelligent, hard-charging agent, but had little interest in or knowledge of Medicare fraud, according to Weinstein. Petersen would not comment about the composition of the task force or his recollection of Project Minicare.

"When the agents went out to conduct interviews, a lot of times they didn't know which questions to ask," Weinstein says of the Enriquez investigation. "In the end, the reports were so bad we almost botched the case." When Weinstein suggested that certain task force members receive special training, Regional Inspector General Robert A. Simon vetoed the idea from his office in Atlanta. Weinstein says Simon also ordered Project Minicare members to conduct operations on a need-to-know basis, meaning agents assigned to a particular investigation were prohibited from discussing details of their sleuthing even with other agents working along similar lines. A certain amount of secrecy was always observed in federal fraud cases, but the new tinge of espionage struck Weinstein as bizarre and counterproductive.

Two months after the project commenced, Weinstein's immediate supervisor, Assistant Regional Inspector General Harry Kinsella, handed him a transfer notice signed by Simon. More than a year earlier, records show, Weinstein had refused to attend a three-month training session in Georgia on the grounds that he could not leave his sick mother. Simon had at first threatened to fire him, then said he would demote Weinstein from investigator to analyst. But the demotion never took place, and the issue seemed to have been dropped - or so Weinstein thought. Now, as he prepared the Enriquez case for trial by the Miami U.S. Attorney's Office, Simon threatened to strip him of his "special agent" title, a designation that carried cachet within the department and held the promise of postretirement consulting work. Weinstein was shocked and outraged.

"I said, `Hell no. You ain't gonna do this now,'" Weinstein recalls. "`I'm going to finish this case, and if you try to stop me I'm going to blow the whistle so loud your ears will ring. I'll go to the civil service board, I'll go to the press. You're not transfering me.' Simon said, `Don't do anything, Leon! What can we do to work this out? Look, I've already put the paperwork in to transfer you. But why don't you continue working the case. Just don't make any waves.'"

Weinstein was reassigned in September 1986, but Simon allowed him to complete the Enriquez case, did not cut his salary or move him to another office, and finally reinstated him before his retirement in 1989. The strangeness of Simon's backpedaling was noted three months ago in a pension hearing before the Merit Systems Protection Board, which ruled in February that the 1986 transfer was invalid, an opinion now being contested by the HHS Office of Personnel Management. Simon did not respond to queries about Weinstein's transfer. Nor did he respond to several requests for an interview or to written questions about Weinstein's allegations of improprieties.

By autumn of 1989, the task force was disbanded and a score of IMC cases were reassigned to Weinstein's colleague, Tom Aurelio. Weinstein claims Aurelio later confided to him that he was told by Simon to abandon all the IMC cases. Aurelio, who still works in the North Dade HHS office, would not discuss the matter. "I have to go by department policy and refuse to respond to inquiries by the press," he says. "Call me up in nine months after I retire." Regardless, all remaining IMC investigations were in fact dropped.

The undercurrent of resistance Weinstein felt he was encountering echoed an earlier experience he'd had in March 1986, one month into the Enriquez case. Weinstein was talking on the telephone to Assistant U.S. Attorney Laura Bonn, he says, when he happened to mention a U.S. General Accounting Office report detailing complaints about IMC made to Congress by disgruntled patients and clinic owners. According to Weinstein, Bonn had not seen the report, and asked him to supply her with a copy. Weinstein claims that Harry Kinsella, his supervisor, flew into a rage and commanded that he not turn over the report. Weinstein also says Bonn told him that Kinsella later met in Miami with U.S. Attorney Leon Kellner to request that Kellner drop all IMC cases. Laura Bonn declined to comment about Weinstein's recollections, saying through a spokesman that "it is the policy of the United States Department of Justice to not comment on or relate conversations involving defendants, defense counsel, or agents."

Kellner, now in private practice in Washington, D.C., says he has no memory of a meeting with Kinsella, but may have forgotten the event. "He could have easily sold me on the idea that this was a low priority," Kellner says, referring to the IMC fraud cases. "Medicare wasn't the type of case I was interested in. It was resources-intensive - very, very hard to do."

Harry Kinsella - who himself was suddenly transferred to Washington, D.C., during the Enriquez investigation, and later demoted from supervisor to special agent - today says he has no memory of the General Accounting Office report. Nor would Kinsella discuss another Weinstein contention - that he withheld evidence from the Justice Department during that agency's labor- racketeering investigation of Recarey. In the summer of 1986, Kinsella was the liaison between Project Minicare at HHS and a Justice Department racketeering strike force in South Florida. Justice Department officials were busy proving Recarey had bribed union representatives to sign up groups of workers as IMC medical plan recipients.

Part 3

One afternoon in the Fort Lauderdale HHS office, another investigator came upon a piece of evidence that should have made unnecessary the government's efforts to prove Recarey committed bribery. The investigator, Joe Birdsong, suddenly realized that checks written by Recarey to the union were drawn on a hospital expense account and then showed up on a Medicare cost report, a transfer that amounted to theft of government funds. Birdsong's discovery engendered considerable excitement among the HHS investigators in the office, Weinstein says. All except Kinsella. "Harry says, `Oh, no,' like that's the last thing he wanted to hear," Weinstein recalls. "Kinsella was the very one who was supposed to be working with the Justice Department prosecutor to help him get Recarey. I went to the prosecutor after I retired and I said, `Did Harry ever tell you that money was Medicare money?' He said no. I asked him what would have happened if he had? He said: `We would have charged him with Medicare fraud!'"

Joe DeMaria, the U.S. Justice Department prosecutor assigned to the Recarey racketeering investigation, confirms Weinstein's account of their conversation. "If Harry Kinsella could have come in and said he could show Medicare fraud, I would have put it on the indictment, we would have considered it," says DeMaria, now in private practice in Miami. "It never happened. I have no idea why. Maybe Miguel Recarey should have been prosecuted for Medicare fraud; that wasn't my bailiwick."

It was a full two years from the time Weinstein began the investigation of Cristino Enriquez until the time the IMC doctor was given eighteen months in prison for mail fraud and conspiracy. In June 1988, as the sentencing date approached, Assistant U.S. Attorney Laura Bonn and Weinstein suggested to Robert Simon, Weinstein's boss in Atlanta, that he invite HHS Inspector General Kusserow down from Washington to attend the hearing. By this time the IMC debacle was being hashed over in the press and in Congress, and it seemed to Weinstein that the Enriquez conviction would be a feather in Kusserow's cap. But the invitation was met with chilly silence. The sentencing hearing came and went quietly. "Looking back on it," Weinstein says today, "it only made sense in the context of a cover-up."

Weinstein says he urged HHS officials to reopen the IMC clinic cases, right up until his last day of work for the department. And to his surprise, he discovered that while the inspector general's office continued to ignore the fraud cases, accountants in the HHS audit division had conducted a review of dozens of IMC clinics, using a research scheme Weinstein developed during his work on the Enriquez investigation. The audits - one of IMC clinics, another of Comprehensive American Care Inc. - showed five million dollars in fraud, Weinstein concluded. Yet the auditors had made scant attempt to recover the money. Rather than alerting the inspector general's office or the U.S. Attorney, HHS accountants sent the audits to Blue Cross/Blue Shield, the Florida Medicare carrier. Blue Cross/Blue Shield sent out letters requesting the return of some funds, but very few were ever recovered.

"I said, `This is fraud! Why didn't you refer this to us?'" Weinstein says, recalling a discussion with Mary Ann Moreno, one of the government auditors who helped conduct the review of IMC clinics. "She said, `I saw that it was fraud. I could recognize it. But my boss told me to send it to Blue Shield. I did what I was told.'" Moreno, who now works in the Atlanta HHS office, would not discuss her conversation with Weinstein, citing departmental prohibitions against employees talking to the press.

Having seen the IMC clinic investigations come to a dead end after the Enriquez trial, the recently retired Weinstein decided to file suit himself. "I said to myself, `If they're not going to do anything, then I will.' I saw so many old people injured and killed through Recarey's schemes. I think it stinks, and I couldn't live with myself if I didn't try to do something about it. I was fortunate in the timing of all this. I can't tell you with a straight face that I would have done what I'm doing if I was 40 years old and faced losing my job. I'm not that stupid and brave."

What at first sounds like paranoia on the part of Leon Weinstein seems less and less implausible the more one considers the close ties between Miguel Recarey, Jr., and the Republican administration during the Eighties, links that help explain how the IMC chief was able to stay afloat so long in a rising sea of charges and complaints.

In the mid-Eighties, Recarey and other IMC associates gave at least $25,000 to George Bush's political action committees, and Recarey was invited to the White House on at least three occasions. In 1984 IMC was desperate for an exemption from a regulatory requirement mandating a 50-50 ratio of Medicare patients to non-Medicare patients. That year Recarey made a $2000 donation to the Dade County Republican Party, chaired by Bush's son, Jeb. Two months later, according to an HHS official who testified before Congress, the younger Bush called HHS Secretary Margaret Heckler to describe Recarey as "a good community citizen and a good supporter of the Republican Party." Shortly thereafter IMC received its exemption. Jeb Bush's Miami real estate firm was later paid $75,000 to find a new corporate headquarters for IMC, and the medical-insurance group also employed former White House aide Lyn Nofziger and one-time Reagan campaign manager John Sears.

As impressive as Recarey's political contributions is the extent to which he established a revolving door between IMC and the government agency that was supposed to oversee it. Juan del Real, HHS's general counsel, received $325,000 when he left the federal agency to go to work for IMC. His wife, Claire del Real, continued at HHS as deputy assistant secretary for public affairs after her husband went to work for Recarey's firm, but eventually joined him, at $130,000 per year. Wayne Fowler, the director of group health plan operations for HHS's Health Care Financing Administration, got $165,000 his first year at IMC. Fowler's former office at HHS directly regulated IMC. William Landress, supervisory operations specialist at the Health Care Financing Administration, received $80,000 per year after joining IMC. Frances Paris, HHS deputy assistant press secretary, got $85,000. Denise Rodriguez, an HHS attorney, got $75,000. Richard Lucibella, an HHS program analyst, only merited $40,000. C. McClain Haddow, chief of staff to HHS Secretary Heckler, won a $38,000 consulting fee from IMC shortly after leaving government work.

For a man trained as an accountant, Recarey moved in some strange circles. IMC employed at least a dozen people with backgrounds in foreign intelligence, according to a 1988 article in the Wall Street Journal. Recarey reportedly bragged of his long-standing business ties with South Florida mob boss Santo Trafficante, Jr., a man who once told Congress he was part of a botched CIA plot to assassinate Fidel Castro. IMC's now-defunct Miami International Hospital (now Golden Glades Regional Medical Center in North Dade) was used to treat wounded Nicaraguan contras during the Reagan administration's CIA-orchestrated war against communism in Central America, according to both medical records and the diaries of National Security Council staffer Lt. Col. Oliver North.

To Leon Weinstein, the tenuous links between Recarey and the CIA go a long way toward explaining the mysterious resistance he encountered in the final years of his HHS career. The fact that both Oliver North and HHS Inspector General Kusserow were contemporary Marine Corps officers only added to his suspicion. Weinstein rejects the notion that government health officials simply lacked resources to pursue the time-consuming IMC fraud cases and instead put a premium on prosecuting larger numbers of more manageable investigations. (In 1989 the American Medical Association called for Kusserow's resignation after a CBS 60 Minutes segment detailed the HHS inspector general's office's fevered persecution of hundreds of doctors for what appeared to be only minor infractions.)

"If you're a reporter, the best way to make a name for yourself is not to do 50 little stories, but to do one big story," Weinstein says by way of example. "The way for a lawyer to make a name for himself is not to do lots of little cases, it's to do one big case. Well, here's IMC, the biggest Medicare fraud in history. Wouldn't you think that Kusserow, as someone who definitely wanted to make a name for himself, would grab this?

"There's got to be a reason that didn't happen," Weinstein says. "Some might say Kusserow was paid off, but I can't conceive of it. He's not that kind of man. Maybe he was pressured by Jeb Bush or some of the others: `Hey, lay off this guy.' Maybe. Except that Kusserow is a tough guy. I can't conceive of him bowing down to political pressure.

"Again and again I said to myself, Why is this happening? The more I thought about it, the more I read, the more I found a connection between the CIA, North, Recarey, the contras. Is it so far-fetched to believe that Colonel North might pick up the phone and say, `Hey, Kusserow, why don't you lay off this guy Recarey? He's involved with the CIA, he's helping us with the contras. This goes right up to the top, right up to the president. The president wants the contras helped out. Would you lay off this guy?' That I see Kusserow doing. In my own mind, that's the reason."

Weinstein easily concedes that a fair dose of speculation lies at the heart of his cover-up theory. And he says he has despaired of trying to prove its veracity all by himself. Too many people, he claims, have nothing to gain by talking. "I think it's up to Congress to find out," he says. "I can't do it. Congress has got to put Harry Kinsella up on the stand and say, `Why did you go down to the U.S. Attorney's office and tell him to drop the IMC investigation?' Congress has to put Bob Simon on the stand and ask him, `Why was Leon Weinstein taken off this case? Why were all these other cases closed? Why did you bury those audit reports instead of going after these clinics?'"

One former federal agent who worked on the aborted IMC investigations says he thinks Weinstein's explanation is ridiculous. But he doesn't seem so sure. "As far as Leon's conspiracy theory, a cover-up theory, I don't know," says the agent, who spoke on the condition of anonymity. "He's speculating the hell out of things. But on the other hand, this is South Florida. You could ask a lot of questions. For instance, why didn't the U.S. magistrate take away Recarey's passport when they let him out on bail?

Part 3

One afternoon in the Fort Lauderdale HHS office, another investigator came upon a piece of evidence that should have made unnecessary the government's efforts to prove Recarey committed bribery. The investigator, Joe Birdsong, suddenly realized that checks written by Recarey to the union were drawn on a hospital expense account and then showed up on a Medicare cost report, a transfer that amounted to theft of government funds. Birdsong's discovery engendered considerable excitement among the HHS investigators in the office, Weinstein says. All except Kinsella. "Harry says, `Oh, no,' like that's the last thing he wanted to hear," Weinstein recalls. "Kinsella was the very one who was supposed to be working with the Justice Department prosecutor to help him get Recarey. I went to the prosecutor after I retired and I said, `Did Harry ever tell you that money was Medicare money?' He said no. I asked him what would have happened if he had? He said: `We would have charged him with Medicare fraud!'"

Joe DeMaria, the U.S. Justice Department prosecutor assigned to the Recarey racketeering investigation, confirms Weinstein's account of their conversation. "If Harry Kinsella could have come in and said he could show Medicare fraud, I would have put it on the indictment, we would have considered it," says DeMaria, now in private practice in Miami. "It never happened. I have no idea why. Maybe Miguel Recarey should have been prosecuted for Medicare fraud; that wasn't my bailiwick."

It was a full two years from the time Weinstein began the investigation of Cristino Enriquez until the time the IMC doctor was given eighteen months in prison for mail fraud and conspiracy. In June 1988, as the sentencing date approached, Assistant U.S. Attorney Laura Bonn and Weinstein suggested to Robert Simon, Weinstein's boss in Atlanta, that he invite HHS Inspector General Kusserow down from Washington to attend the hearing. By this time the IMC debacle was being hashed over in the press and in Congress, and it seemed to Weinstein that the Enriquez conviction would be a feather in Kusserow's cap. But the invitation was met with chilly silence. The sentencing hearing came and went quietly. "Looking back on it," Weinstein says today, "it only made sense in the context of a cover-up."

Weinstein says he urged HHS officials to reopen the IMC clinic cases, right up until his last day of work for the department. And to his surprise, he discovered that while the inspector general's office continued to ignore the fraud cases, accountants in the HHS audit division had conducted a review of dozens of IMC clinics, using a research scheme Weinstein developed during his work on the Enriquez investigation. The audits - one of IMC clinics, another of Comprehensive American Care Inc. - showed five million dollars in fraud, Weinstein concluded. Yet the auditors had made scant attempt to recover the money. Rather than alerting the inspector general's office or the U.S. Attorney, HHS accountants sent the audits to Blue Cross/Blue Shield, the Florida Medicare carrier. Blue Cross/Blue Shield sent out letters requesting the return of some funds, but very few were ever recovered.

"I said, `This is fraud! Why didn't you refer this to us?'" Weinstein says, recalling a discussion with Mary Ann Moreno, one of the government auditors who helped conduct the review of IMC clinics. "She said, `I saw that it was fraud. I could recognize it. But my boss told me to send it to Blue Shield. I did what I was told.'" Moreno, who now works in the Atlanta HHS office, would not discuss her conversation with Weinstein, citing departmental prohibitions against employees talking to the press.

Having seen the IMC clinic investigations come to a dead end after the Enriquez trial, the recently retired Weinstein decided to file suit himself. "I said to myself, `If they're not going to do anything, then I will.' I saw so many old people injured and killed through Recarey's schemes. I think it stinks, and I couldn't live with myself if I didn't try to do something about it. I was fortunate in the timing of all this. I can't tell you with a straight face that I would have done what I'm doing if I was 40 years old and faced losing my job. I'm not that stupid and brave."

What at first sounds like paranoia on the part of Leon Weinstein seems less and less implausible the more one considers the close ties between Miguel Recarey, Jr., and the Republican administration during the Eighties, links that help explain how the IMC chief was able to stay afloat so long in a rising sea of charges and complaints.

In the mid-Eighties, Recarey and other IMC associates gave at least $25,000 to George Bush's political action committees, and Recarey was invited to the White House on at least three occasions. In 1984 IMC was desperate for an exemption from a regulatory requirement mandating a 50-50 ratio of Medicare patients to non-Medicare patients. That year Recarey made a $2000 donation to the Dade County Republican Party, chaired by Bush's son, Jeb. Two months later, according to an HHS official who testified before Congress, the younger Bush called HHS Secretary Margaret Heckler to describe Recarey as "a good community citizen and a good supporter of the Republican Party." Shortly thereafter IMC received its exemption. Jeb Bush's Miami real estate firm was later paid $75,000 to find a new corporate headquarters for IMC, and the medical-insurance group also employed former White House aide Lyn Nofziger and one-time Reagan campaign manager John Sears.

As impressive as Recarey's political contributions is the extent to which he established a revolving door between IMC and the government agency that was supposed to oversee it. Juan del Real, HHS's general counsel, received $325,000 when he left the federal agency to go to work for IMC. His wife, Claire del Real, continued at HHS as deputy assistant secretary for public affairs after her husband went to work for Recarey's firm, but eventually joined him, at $130,000 per year. Wayne Fowler, the director of group health plan operations for HHS's Health Care Financing Administration, got $165,000 his first year at IMC. Fowler's former office at HHS directly regulated IMC. William Landress, supervisory operations specialist at the Health Care Financing Administration, received $80,000 per year after joining IMC. Frances Paris, HHS deputy assistant press secretary, got $85,000. Denise Rodriguez, an HHS attorney, got $75,000. Richard Lucibella, an HHS program analyst, only merited $40,000. C. McClain Haddow, chief of staff to HHS Secretary Heckler, won a $38,000 consulting fee from IMC shortly after leaving government work.

For a man trained as an accountant, Recarey moved in some strange circles. IMC employed at least a dozen people with backgrounds in foreign intelligence, according to a 1988 article in the Wall Street Journal. Recarey reportedly bragged of his long-standing business ties with South Florida mob boss Santo Trafficante, Jr., a man who once told Congress he was part of a botched CIA plot to assassinate Fidel Castro. IMC's now-defunct Miami International Hospital (now Golden Glades Regional Medical Center in North Dade) was used to treat wounded Nicaraguan contras during the Reagan administration's CIA-orchestrated war against communism in Central America, according to both medical records and the diaries of National Security Council staffer Lt. Col. Oliver North.

To Leon Weinstein, the tenuous links between Recarey and the CIA go a long way toward explaining the mysterious resistance he encountered in the final years of his HHS career. The fact that both Oliver North and HHS Inspector General Kusserow were contemporary Marine Corps officers only added to his suspicion. Weinstein rejects the notion that government health officials simply lacked resources to pursue the time-consuming IMC fraud cases and instead put a premium on prosecuting larger numbers of more manageable investigations. (In 1989 the American Medical Association called for Kusserow's resignation after a CBS 60 Minutes segment detailed the HHS inspector general's office's fevered persecution of hundreds of doctors for what appeared to be only minor infractions.)

"If you're a reporter, the best way to make a name for yourself is not to do 50 little stories, but to do one big story," Weinstein says by way of example. "The way for a lawyer to make a name for himself is not to do lots of little cases, it's to do one big case. Well, here's IMC, the biggest Medicare fraud in history. Wouldn't you think that Kusserow, as someone who definitely wanted to make a name for himself, would grab this?

"There's got to be a reason that didn't happen," Weinstein says. "Some might say Kusserow was paid off, but I can't conceive of it. He's not that kind of man. Maybe he was pressured by Jeb Bush or some of the others: `Hey, lay off this guy.' Maybe. Except that Kusserow is a tough guy. I can't conceive of him bowing down to political pressure.

"Again and again I said to myself, Why is this happening? The more I thought about it, the more I read, the more I found a connection between the CIA, North, Recarey, the contras. Is it so far-fetched to believe that Colonel North might pick up the phone and say, `Hey, Kusserow, why don't you lay off this guy Recarey? He's involved with the CIA, he's helping us with the contras. This goes right up to the top, right up to the president. The president wants the contras helped out. Would you lay off this guy?' That I see Kusserow doing. In my own mind, that's the reason."

Weinstein easily concedes that a fair dose of speculation lies at the heart of his cover-up theory. And he says he has despaired of trying to prove its veracity all by himself. Too many people, he claims, have nothing to gain by talking. "I think it's up to Congress to find out," he says. "I can't do it. Congress has got to put Harry Kinsella up on the stand and say, `Why did you go down to the U.S. Attorney's office and tell him to drop the IMC investigation?' Congress has to put Bob Simon on the stand and ask him, `Why was Leon Weinstein taken off this case? Why were all these other cases closed? Why did you bury those audit reports instead of going after these clinics?'"

One former federal agent who worked on the aborted IMC investigations says he thinks Weinstein's explanation is ridiculous. But he doesn't seem so sure. "As far as Leon's conspiracy theory, a cover-up theory, I don't know," says the agent, who spoke on the condition of anonymity. "He's speculating the hell out of things. But on the other hand, this is South Florida. You could ask a lot of questions. For instance, why didn't the U.S. magistrate take away Recarey's passport when they let him out on bail?

Part 4

"I don't think what Leon thinks is there is there," the agent adds. "Let's talk about ineptness, maybe, or failure to allocate resources, or stupidity and bureaucratic games. But a conspiracy from the White House? I don't know. But I'll tell you, sometimes I lie awake at night and wonder."

In March 1989, two months after retiring from HHS as a senior special agent, Weinstein filed the first of eight federal lawsuits. Shortly thereafter he and his Miami attorney, Robert Barnett, got a call from the Justice Department. Weinstein hoped that lawyers for the Justice Department's civil division would see fit to take over the lawsuit and save him the expense of prosecuting it alone, so he and Barnett agreed to fly to Washington, D.C., at their own expense, in order to discuss the suit.

When he walked into a Justice Department conference room in Washington, Weinstein says, he was surprised to see Lewis Morris, a special prosecutor he recognized from the department's criminal division. He says he was stunned when Morris and an HHS inspector named Linda Lloyd began firing hostile questions at him: Who had Weinstein interviewed in connection with the suit? How had he obtained the government audits? He had done little independent investigation, Weinstein protested, besides checking the corporate names of various IMC clinics through the Florida secretary of state. And he pointed out that as public records, the audits were available to anyone.

According to Weinstein, others at the conference - Ronald Clark, a senior trial counsel for the Justice Department's civil division, and Robert Salcido, an assistant U.S. attorney from Miami - were equally taken aback by Morris's and Lloyd's line of questioning. The meeting broke up quickly, with Weinstein and Barnett returning home that evening. Aside from Weinstein's attorney, none of the participants in the meeting will discuss it today.

Two weeks after the first encounter, HHS inspector Lloyd called again from Washington to propose a second meeting. At first she insisted on meeting at Weinstein's Surfside bungalow, but a suspicious Weinstein talked her into a conference at Barnett's law office. Lloyd arrived the next day with Raisa Otero-Cesario, another Medicare inspector from the Washington headquarters of Weinstein's old investigative agency. Barnett began the meeting by saying he was dismayed at the treatment he and Weinstein had received in Washington. The two women then announced the purpose of their trip to Miami: Weinstein, they said, was now the subject of a criminal investigation to determine whether he had stolen government audits and whether he was guilty of conflict of interest in filing his free-lance lawsuits. Weinstein's attorney told him not to answer any of the questions, and then ordered the inspectors out of his office. They left.

In August 1989, Weinstein met with a panel of two FBI agents and two lawyers for the U.S. Attorney's office in Miami, and presented them with the story of his investigation of IMC fraud. He also complained to them about HHS's ongoing scrutiny of him, describing it as a scare tactic. No investigation materialized.

Last year, in an interview with the nationally syndicated TV news magazine Inside Edition, the chairman of the House Medicare subcommittee called Weinstein "a good public servant who is a whistle blower, who did his patriotic duty, whose reputation is being impugned. We owe him - Mr. Weinstein - the courtesy, the decency, of clearing his name." Rep. Fortney Stark (D-Calif.) also promised to launch a congressional investigation into Weinstein's claims that his bosses at HHS covered up evidence of fraud at Recarey's IMC and obstructed justice at the behest of White House officials. So far no such investigation has been initiated.

A recent request filed by Weinstein under the Freedom of Information Act confirms he is still officially under investigation by the federal agency he used to work for. "If the FBI, if Congress, isn't interested, well it just dies, I guess," Weinstein says. "Recarey sits down there in South America, people died, millions were stolen, Medicare lost a fortune possibly because of the contras, and that's the end of it. But I've been an investigator for 35 years, and in my opinion there's too much smoke here for there not to be fire."

Justice Department lawyers have taken over Weinstein's eight lawsuits, and in all cases the government is contesting Weinstein's right to participate and profit in the suits, arguing that, at least for ex-government employees, virtue should be its own reward. Justice Department officials also have spurned Weinstein's offers of assistance in the complicated cases. "The government does not want its employees blowing the whistle on cases where they may have dropped the ball," says Weinstein, for a moment sounding uncharacteristically lonely and bitter. "I'm offering my help. But they don't want it. It's like I'm a pariah."

International Medical Centers is gone, but many of the clinics and doctors in the lawsuits Weinstein initiated still do business in South Florida. "We don't have a Recarey, we don't have an IMC, but we have the same basic system that was in operation then," Weinstein says, expressing a wariness of health maintenance organizations. "People think they're getting a good deal by belonging to these little clinics, and sometimes they are. But I wouldn't want my own mother to belong to one. You have to realize that there's a tremendous temptation for the doctor who owns that clinic to say, `Everything's fine, you're okay, there's nothing wrong.' If he puts you into the hospital, that money for hospitalization comes out of his pocket. I think it's scary that some of the people who operated these clinics under IMC are still out there.

"No government worker has ever been awarded in any of these cases," Weinstein says, turning to the subject of his False Claims suits. "If I can do that, hopefully I would establish a precedent that other people, other government workers, could follow. I think I'd be doing more than I've ever done as a government worker. I'd be doing something for the good of the country. Of course, they say I'm doing this only for the money. So far I'm out 20,000 bucks. Maybe you'd consider me a fool. Maybe I am. Maybe I am a fool."

But there's a chance Weinstein may someday get rich from his retirement hobby. In anticipation of that eventuality, he has even formed a couple of corporations, in part to cushion the tax consequences of coming into a fortune. Three weeks ago a federal judge in the ninth circuit ruled that government employees can avail themselves of the False Claims Act, a ruling that gives new hope to Weinstein and his lawyers. Even a small piece of a multimillion-dollar settlement is a lot of money to a man living on a $2000-per-month pension. While he waits to see what happens, the wily ex-agent with the Bronx baritone continues to stroll home at noon from his tennis game, walking through the heat shimmer down Carlyle Street with his pudgy little dog. If you drive to Surfside and park in the shadow of a certain palm tree, you can see him coming, and in the distance, with the brilliant sun beating down, you will see a man who's not nearly finished fighting.

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