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Reporting found half of that money, or about $94 million has gone to clinics that have shown questionable billing practices or signs of fraud. joy jaffers former drug medical supper visor says she complained to the state for years about all the obvious fraud. >> we found billing records for people in jail. one person dead. people who said they didn't need this kind of treatment. >> uh-huh. >> clinics closed on a certain day, billing for that certain day. >> uh-huh. >> none of this surprises you? >> not at all. we found all of those things. >> reporter: for more than a month now, cnn has been a...

Billing for services you're not providing. then there's this man, alexander fe ferdnand. 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 systems. how can a guy like you be operating a drug rehab program here fiscal years, taxpayers spent nearly $186 million, supposedly treating drug and alcohol patients in california. our investigation found half of that money, or about $94 million, as gone to clinics that have shown questionable billing practices or signs of fraud.

Investigative reporting reviewed thousands of records in california's drug medi-cal program. including program audits. we analyzed patient billings. even watched clinics under cover 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. >> marble vogt was the lead investigator wh...

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...

>> reporter: in the last two fiscal years, taxpayers spent $186 million, supposedly treating drug and alcohol abuse patients in california. our investigation with the center for investigative reporting, found half of that money, or about $94 million, has gone to clinics that have shown questionable billing practices or signs of fraud. former drug medical supervisor, complained to the state for years about all the obvious fraud. we found billing records for people in jail, one person dead, people who said they didn't need this kind of treatment. >> uh-huh. >> reporter: clinics closed on a certa...