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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 there's a major crackdown on fraud in the state, but watch what had to happen first. >> george aluno shouldn't even be in california's drug rehab business. you seem to be at the center of fraud allegations here. >> no. >> he's been banned from billing medicaid since 2002 but it hasn't stopped him from billing the state of california. tim is accused of fraudulent practices at his drug...

Program, including program audits. we analyzed patient billings, even watched clinics undercover to see who was getting treatment and who wasn't. 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 investigate who helped prosecute ferdman back in 2000 for running a texas-based crime syndicate th...

>> 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 didn't have an easy way to prove so cal was making up addictions. but the county pulled the clinic's 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 county accused of similar practices remains open. just last year a county report on pomona alcohol and...

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. it's a look into fraud and abuse involving a taxpayer rehab program. what you're about to see will shock you. that is ahead. you like to keep your family healthy and fit. and now there's a new way to do the same for your dog. i...

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. it's against the law to pay drug rehab clients, but that apparently didn't 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 $28 and $61 per signature. >> at first i didn't know it was illegal. i didn't know nothing -- i t...