The Cuban Government and Multi-Million Dollar Medicare Fraud in South Florida

by Vanessa Lopez

The dilapidated state of the Cuban economy has left the Cuban government scrambling for ways to obtain hard currency. Cuba has contrived ways to benefit from leasing doctors, nurses, teachers, and security agents abroad; more recently, Cuba has also found ways to capitalize on large-scale Medicare fraud, possibly committing economic warfare on the United States.

Medicare fraud is one of the highest dollar volume crimes in the United States. In October of 2009, it was estimated that such fraud has reached $60 billion a year. (1) And South Florida has become the epicenter of this federal crime.

Federal authorities, in July of 2010 in conjunction with the first Healthcare Fraud Summit (taking place, rather symbolically, in Miami), led a crackdown in the 5 major U.S. cities that have the dubious recognition of being the largest Medicare fraud perpetrators: Miami, Brooklyn, Baton Rouge, Detroit, and Houston. Of the 94 people charged by authorities for fraud, 25 are from Miami-Dade. (2) Florida’s mental health claims are 4 times higher than Texas, where healthcare fraud is also substantial (Florida’s population is ¾ that of Texas’). Florida’s physical and speech therapy claims are 140 times higher than New York’s (while New York’s population has 1 million more people than Florida’s) and 10 times higher than in California (which has a population double the size of Florida’s). Ultimately, South Florida is responsible for one-third of the nation’s healthcare fraud prosecutions. (3)

The question should be posed: What makes South Florida different from any other region and can account for the troubling number of fraudulent claims emanating from the area?

Given that “at least half of South Florida’s Medicare fugitives are believed to be [hiding] in Cuba,” it is probable that the region’s Cuban-connections can be playing a significant role in the region’s disproportionately high propensity to commit Medicare fraud. (4) There are various possible reasons for this:

New Cubans arriving to South Florida have become accustomed to lawlessness – a condition of living under a totalitarian regime whereby one needs to regularly resort to illegal acts as a means of survival. This adaptation purportedly predisposes them to embrace opportunities for Medicare fraud. Many troubling questions can be raised against this hypothesis: Why is this phenomenon mostly associated with Medicare and not other crimes? Why is it that the criminals behind this fraud are not only recently arrived Cubans, but also those who have been in South Florida for decades? Since this is the case, blaming this crime on recently-arrived Cubans may be factually inaccurate and discriminatory.

South Florida’s closeness to Cuba, both geographic and cultural, provides for an easy escape to Cuba – a state with no extradition treaty with the United States.

The Cuban Government is orchestrating and assisting some of these instances of Medicare fraud. (5)

In a discussion with a high-level former intelligence official with the Cuban Government, it became clear that the latter two reasons can help account for South Florida’s high volume of Medicare fraud cases. (6) In said discussion, the official, who asked to remain unnamed, states that there are indeed strong indications that the Cuban Government is directing some of these Medicare frauds as part of a desperate attempt to obtain hard currency. The source notes that the Cuban Government is also assisting (while not directing) other instances of Medicare fraud – providing perpetrators with information with which to commit fraud.

The former Cuban official goes on to say that, in the instances where the Cuban Government is not directing or facilitating the fraud, it does provide Cuba as a place for fugitives to flee. This gives the Castro regime a convenient and care-free way to raise hard currency. The source specified that any fugitive in Cuba needs to pay astronomically large sums of money to the Cuban Government in order to enter and remain in the country. The source pointed out the well-known case of Robert Vesco, in which the government’s extortion of fugitives ended up rather badly for this particular fugitive. The official explains that Vesco paid high prices to the Cuban Government to remain in the country, and it was only after his money ran out that the Cuban Government sentenced him to 13 years incarceration. Vesco died of cancer before the end of his sentence.

More recent cases of fugitives that have fled to Cuba include: Jorge Ramirez who was charged with defrauding Medicare of $42.2 million. Ramirez attempted to reenter the United States in December of 2008 and was arrested. What was his motivation to return? Had he run out of money to pay-off Cuban authorities, or did he just think the United States had forgotten all about him? While he was personally charged with the aforementioned sum, the ring he was working with scammed $420 million from Medicare. His two co-defendants remain in Cuba.

There was also the case of the Benitez brothers, who billed Medicare over $110 million in false claims between 2001 and 2004. They first fled to the Dominican Republic, but after they thought authorities were getting too close to capturing them, they relocated to Cuba. They are joined by Eduardo Moreno, who submitted over $7 million in false Medicare claims. He too can be found in Havana, along with dozens of other fugitives.

The cases of those who were unable to flee to Cuba can also be telling – most notably, the case of former Lieutenant Colonel Renier Vicente Rodriguez Fleitas, who served in Cuba’s Armed Forces. (7) Rodriguez Fleitas served in Angola and the Congo under the Cuban flag, and yet he found himself living in Florida, perpetrating Medicare fraud. Between December 2009 and March 2010, his company, Pirifer Pharmacy and Discount, billed Medicare $1.8 million in false claims. Rodriguez Fleitas’ defense team claims that he was but a pawn of others. However, his connections with Cuba have raised some red flags and the FBI continues to investigate the case.

The Lieutenant Colonel has lived in South Florida for the past 15 years. Although he claims that he had been living on the streets at the time he was approached to commit the Medicare fraud, he had traveled to Cuba every year since the time that he had left the Island. Furthermore, Rodriguez Fleitas, at the very time that his company was committing Medicare fraud, was actually living in Cuba, during an 8-month “visit.” Various irregularities in his case remain. Despite the irregularities, Rodriguez Fleitas was sentenced to three years’ incarceration and it does not currently seem as that he will be prosecuted for any other crimes besides Medicare fraud.

It seems clear that the Cuban Government is partially responsible for the disproportionately high number of cases of Medicare fraud in the region. Its assistance to this serious and costly crime cannot be overlooked, and its constant aiding and abetting of U.S. criminals, simply for its economic benefit, is offensive to U.S. law-abiding citizens who must ultimately pay for the billions of dollars worth of fraud that stems from the assistance provided by the Castro Government.

Notes

1) “Medicare Fraud: A $60 billion Crime.” CBS News. October 25, 2009. http://www.cbsnews.com/stories/2009/10/23/60minutes/main5414390.shtml

2) Weaver, Jay. “Feds Charge 94 Medicare Fraud Suspects in Miami, Other Cities.” The Miami Herald. July 16, 2010.

3) Op Cit.

4) Marquez, Myriam. “Medicare Crooks Like Cuba – Why?” MiamiHerald.com. February 5, 2009.

5) This has been disclosed by a high-ranking U.S. official under the condition of anonymity.

6) Interview with high level former MININT official, October 7, 2010. Miami, FL.

7) Reyes, Gerardo. “Dan tres años por fraude al Medicare a ex militar cubano.” The Miami Herald. January 14, 2010.

*Vanessa Lopez is a Research Associate at the Institute for Cuban and Cuban-American Studies, University of Miami.

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