Kenneth Rijock

Kenneth Rijock

Saturday, September 15, 2012

TREAT HIGH-VOLUME HEALTH CARE BANK CLIENTS AS POTENTIAL RISKS



The explosion of Medicare and related health care fraud in the United States, a billion-dollar problem that appears to be increasing exponentially, is a cause for concern, especially in Florida, whose large population of retirees have made it Ground Zero for Medicare Fraud.

 Some Florida examples:

(1) Fraudsters who literally import their figurehead from inside Cuba, bring them into Florida to run criminal enterprises that bill the us government of non-existent treatment, care, medications and medical appliances. The manager is later returned to Cuba, from where he cannot be extradited, due to the lack of diplomatic relations with the US.  Dozens of convicted drug felons have moved into the fraudulent health-care field, abandoning their previous "profession" for crimes which are seldom discovered in progress, and which rarely expose the perpetrator to the risk of real-time arrest.

(2) A convicted money launderer and drug trafficker, after release from prison, opens a home health care business, in his wife's name, which billed for over $45m for phantom home treatments. over $30m paid to the fraudsters. He was sentenced to ten years this week, and his wife to eight years.

(3) Medical equipment suppliers and home-care service suppliers appear to be the largest single group of fraudulent operators within the industry.



Bankers whose clients include high-volume health care providers are advised to:

(1) Conduct Enhanced Due Diligence on all owners and officers of the clients' companies.

(2) Check out relatives and family members of officers and principals; these people always use fronts without criminal records.

(3) Is the company a start-up with a new record of rapid success ? if so, what businesses were the principals and officers engaged in previously ?

I would consider health-care clients now as high risk, unless they have a long, satisfactory track record. Remember, criminals can also acquire small, old companies in the industry, and ramp up their business.





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