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Anderson Cooper 360-20130927-08:18:00

keeping you honest tonight. california grilled legislators after a year-long investigation by cnn in the center for investigative reporter. if you're a regular viewer of the program, you know the hearing centered on allegations of fraud in california's fraud program. a program that receives millions of your taxpayer dollars as well. our investigation found fraud so egregious, so bad that as a result, 174 drug rehab locations were suspended with some even shut down. cnn's drew griffin repeatedly for a long time tried to ask the people in charge of the program why they weren't doing more to stop the fraud. his reporting uncovered. nearly every turn, however, people just didn't want to answer. watch what happens when he finally track down an official diana dooley who runs the agency who was supposed to oversee the program. >> reporter: drew griffin with cnn. >> how are you doing? >> reporter: we've been trying to reach you and talk about the widespread fraud in the drug rehab business.

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Anderson Cooper 360-20130927-00:19:00

many didn't want to answer. watch what happens when you finally track down an official diana dooley who runs the agency who was supposed to oversee the program. >> reporter: drew griffin with cnn. >> how are you doing? >> reporter: we've been trying to reach you and talk about the widespread fraud in the drug rehab business. but we're told that nobody will talk to us about it. in an uncomfortable moment the secretary at first refused to speak. secretary do you know alex forgetman, a convicted felon who apparently run once of these clinics and has been billing the state of california for several years despite the fact that there have been complaints registered with the department about him? he was convicted of a major insurance fraud in the state of texas but somehow was able to get certified and has been billing them. i'm just wondering if there's anybody concerned about this

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Anderson Cooper 360-20130803-00:11:00

billing practices. among the scams billing for phony patients for treatments never provided or treatments patients didn't need. in one case, patients were dead. a rehab racket series is now headline news across california. the san francisco chronicle, the l.a. times, the sacramento bee picking up on it. new mexico the seri until the series aired, officials turned down interviews and literally ran from cameras. first, the reporting that has a lot of people tonight. drew griffin tonight keeping them honest. he shouldn't be in california's drug rehab business. you seem to be center of fraud allegations here. >> no, no, no, no. >> reporter: he's banned from billing medicaid since 2002 but still bills the state of california. ajind us accused of wrong practices at his clinic.

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Anderson Cooper 360-20130803-00:14:00

>> reporter: state health officials in one sacramento building after another refused to be questioned, including toby douglas who oversees drug medical. will you make sure to provide a response why this wide-spread fraud is allowed to continue? after calling the state's secretary of health and humane services dianna duly and getting no for an answer we decided to get a response in person. drew grif within cnn. >> how do you do? >> reporter: we've been trying to reach you and talk about the wide-spread fraud in the drug rehab business and we're told that neither you nor the program director nor anybody inspect state of california will talk to us about it. in an uncomfortable moment, the secretary at first refused to speak. secretary? do you know alex ferdman, a convicted felon who runs a clinic and billing thetaf

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Anderson Cooper Special Report-20130803-02:11:00

it's now headline news across california. the stran chronicle, the sacramento bee all picking up on it. officials literally ran from our cameras. first, the reporting that has a lot of people talking. drew griffin tonight, keeping them honest. >> reporter: george aluno shouldn't even be in california's drug rehab business. he's been banned from billing medicaid since 2002. but it hasn't stopped him from billing the state of california. tim agendu is accused of fraudulent practices at his rehab clinic, but it hasn't stopped him from billing the state of california, either. >> and who are you? >> i'm drew griffin with cnn. your former employees say you're

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Anderson Cooper Special Report-20130803-05:11:00

dead. it's now headline news across california. "the san francisco chronicle," "the sacramento bee" all picking up on it. officials literally ran from our cameras. first, the reporting that has a lot of people talking. drew griffin tonight, keeping them honest. >> reporter: george aluno shouldn't even be in california's drug rehab business. he's been banned from billing medicaid since 2002. but it hasn't stopped him from billing the state of california. tim agendu is accused of fraudulent practices at his rehab clinic, but it hasn't stopped him from billing the state of california, either. >> and who are you? >> i'm drew griffin with cnn. your former employees say you're

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The Situation Room-20130803-22:50:00

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 rehab clinic but it hasn't stopped him from billing the state of california either. >> drew griffin with cnn. >> and who are you? >> i just told you. i'm drew griffin with cnn. >> i don't -- >> wait a minute. your former employees say you're

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The Situation Room-20130803-22:27:00

rehab program in california that gives an eye opening look at fraud and abuse. the program looks like a noble cause on paper. privately run rehab clinics get medicaid money. a year-long investigation by cnn and the center for investigative reporting has found a system riddled with fraud and poor oversight from billing for phony patients to allowing convicted felons to run rehab centers. because it's happening in california, it is big money. state and federal taxpayers are on the hook for tens of millions of dollars every single year. investigative correspondent drew griffin has this report. >> mr. aluno, drew griffin with cnn. george has run a taxpayer funded drug rehab business in southern california for the past six years, which is surprising because for the last 11 years he's been on a list of people banned from billing medicaid.

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Anderson Cooper Special Report-20130803-08:11:00

questionable billing questions. billing medi-call for treatment patients didn't need. in one case, the patient was dead. it's now headline news across california. "the san francisco chronicle," "the sacramento bee" all picking up on it. officials literally ran from our cameras. first, the reporting that has a lot of people talking. drew griffin tonight, keeping them honest. >> reporter: george aluno shouldn't even be in california's drug rehab business. he's been banned from billing medicaid since 2002. but it hasn't stopped him from billing the state of california. tim agendu is accused of fraudulent practices at his rehab clinic, but it hasn't stopped him from billing the

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Stroumboulopoulos-20130803-09:11:00

that have shown signs of questionable billing questions. billing medi-call for treatment patients didn't need. in one case, the patient was dead. it's now headline news across california. "the san francisco chronicle," "the sacramento bee" all picking up on it. officials literally ran from our cameras. first, the reporting that has a lot of people talking. drew griffin tonight, keeping them honest. >> reporter: george aluno shouldn't even be in california's drug rehab business. he's been banned from billing medicaid since 2002.

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