Deep Fraud News Today

Welcome back. well, moments ago we showed you how taxpayers are being ripped off by some rehab clinics. it took weeks for drew griffin to get an interview with officials. they finally did sit down with us, and now theres a major crackdown on fraud in the state, but watch what had to happen first. >> george aluno shouldnt even be in californias drug rehab business. you seem to be at the center of fraud allegations here. >> no. >> hes been banned from billing medicaid since 2002 but it hasnt stopp...

Program, including program audits. we analyzed patient billings, even watched clinics undercover to see who was getting treatment and who wasnt. the result, we found that in the last two fiscal years, half of the nearly $186 million spent for drug medi-cal, about $94 million, went to clinics that have shown questionable billing practices or signs of fraud. case in point, the man with the cigar, a convicted felon named alexander ferdman. >> ferdman was the organizer. >> marshall vote was the lead...

>> it took an audit for me to know how deep it was, how deep fraud was going on there. >> other whistle-blowers came forward and claimed that so cal was committed drug medi-cal fraud by labeling teens with fake addictions. riverside county officials told us they didnt have an easy way to prove so cal was making up addictions. but the county pulled the clinics funding anyway because so many of its clients were dropping out. that forced so cal to shut down. but the other clinic in los angeles coun...

Going to -- felt as though he was being betrayed and he did something that was very stupid on his behalf. >> well, gentlemen, we will have to leave the conversation there. robert fitzpatrick and john "red" shea, we appreciate your time, thank you. >> thank you, anna. moving right along, after a year-long investigation, our cnn special report rehab racket is coming up. its a look into fraud and abuse involving a taxpayer rehab program. what youre about to see will shock you. that is ahead. you ...

Billing. >> and that one provider was no isolated instance. over and over we found examples of fraud, not hidden fraud. this was happening in plain sight. for example, george. 19-year-old darshea miles was only 14 when she went to his rehab center along with her mother and three sisters. its against the law to pay drug rehab clients, but that apparently didnt stop george. miles said he paid her and other clients $5 each tame thime theyd in for group counseling so he could charge medi-cal between...

Billing for the koun county ser youre not providing. and then theres alexander ferdman. he came to california, setting up a drug rehab clinic, and billing taxpayers even though felons are barred from running drug medi-cal centers. mr. ferdman, how can a guy with a record like you being operating a drug rehab clinic here in california. you have been convicted of a major insurance car crash scheme in texas. >> i was convicted, but its not what it seems. >> in the last two fiscal years, taxpayers s...

Program in the nation paid for with federal and state dollars. a one-year investigation by cnn and the center for investigative reporting found the rehab portion of that program called drug medi cal is rife with fraud, has operators who bill the government for made-up clients and often get away with it. joy saw plenty of fraud in the nine years she spent working as a supervisor over drug medical. >> i believe the word got out that there was easy money to be made in the outpatient drug-free syste...

Texas but for somehow was able to get certified and has been billing. im just wondering if theres anybody in the state of california thats concerned about this fraud? then finally answered a question. >> the state of california takes fraud very seriously and there are many investigations that are under way. the allegations, all allegations are given full and fair consideration and you have caught me running because i am late for a meeting that im chairing. >> i wonder if you would just do one th...

>> bigger picture of problems. >> and only now two weeks before these two national news organizations are about to release a major study of what we found was extensive fraud is the state of california doing this extensive review. coincidence? >> its not a fair characterization. weve been investigating all along. >> my question is why has it taken the state so long to catch up to this? >> look, there are bad people who want to scam this program, and we are going to do everything possible to inves...

To collapse, radioed the firefighters, and ordered them to back away. several firefighters got hit with burning debris and some were knocked to the ground. only minor injuries for a few firefighters. the fire chief says training and experience saved the day. well, after testifying this week in a boston mobsters murder trial, a former fbi man is talking exclusively to us here at cnn. he spoke harshly about the man on trial and the fbi as well. also, cnn special report that the results of a ye...