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12.22.2011

On December 21, 2011, Thomson Reuters published a Special Investigatove Report titled "Mediscam:  How Criminals Easily Form Fake Companies to Swindle Millions from Medicare."   The story was the latest segment in Reuters' multi-part series titled "Shell Games," which highlights the widespread use of U.S. shell corporations to execute various financial crimes including securities fraud, health care fraud, and money laundering.  You can download a full copy of the report here: Special_Report_--_Mediscam.pdf

The centerpiece of the Special Investigative Report was one of the nation's largest, most notorious and well-concealed health care fraud cases:  United States v. Michel De Jesus Huarte et al.  Miche Huarte, the lead defendant, formed more than 35 shell corporations with no legitimate business operations, and then used the corporations to submit approximately $100 million of false and fradulent claims to the Medicare program.  For each of the companies, Huarte concealed his involvement by recruiting nominee or "straw owners," some of whom were paid as much as $200,000 to flee to Cuba to avoid law enforcement detection or capture.

"This is a Catch Me If You Can environment," says Ryan K. Stumphauzer, a former U.S. attorney with the Justice Department in Miami who prosecuted the Huarte case and scores of other Medicare frauds involving shell companies.  "We had no idea who Huarte was.  We had no idea there was some mastermind out there." 

The Reuters article also included excerpts from Ryan Stumphauzer's closing argument during Huarte's sentencing hearing.

Mr. Stumphauzer is available to consult clients concerning alleged violations of the Health Care Fraud Statute, Anti-Kickback Statute, the Stark law, and other healthcare related statutes.

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