is costing american taxpayers $60 billion. >> it's money lost to waste, abuse and improper payments. some of that money is sent to fake or bad addresses, as abc's jim avila investigates. >> reporter: our hunt to find how medicare is losing billions of dollars brought us here, chicago's southside and this odd location for a doctor's office. you run the mailbox place? >> yes we do. >> reporter: right next door to a porn shop, a mailbox store where medicare has sent nearly $600,000 in payments. it's listed as suite 308, which in reality, is just a mailbox. there's nobody practicing medicine in here. >> no. >> reporter: the law says payments should be sent only to a location where someone is practicing medicine. still, your money flowed in. >> how much? >> reporter: $592,000. >> they could have at least gotten a bigger box. >> reporter: in a government report first obtained by abc news federal investigators charging medicare is not checking where it's sending your money, making it too easy for