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Alexander ferdman. convicted for running an organized crime ring in texas that ripped off insurance companies. it hasn't stopped him from coming 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 be operating a drug rehab clinic here in kra rah? you've been convicted of a major insurance car crash scheme in texas. >> i was convicted. but it's not what it seems. >> reporter: in the last two fiscal years, taxpayers spent nearly $186 million. supposedly treating d...

Medi-cal supervisor, says she complained to the state for years about all the obvious fraud. we found one person did. people who said they didn't need this kind of treatment. clinics closed on a certain day. billing for that certain day. none of this surprises you. >> not at all. we found all of those things. >> cnn has been asking for an explanation for more than a month now from the state of california and more than a month we have gotten nowhere. >> our on camera interview was decli declined. >> can i ask you why? >> that wasn't my decision. >> reporter: will you make sure