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You have been convicted of major insurance car crash scheme in texas. >> i was convicted but it's not what it seems. >> reporter: the last two fiscal years taxpayers spent nearly $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. joy jarvers, former supervisor said she complained to the state for years about all of the obvious fraud. >> we found billing records for people ...

Voluntarily shut down on july 1st, without explanation. cnn and the center for investigative reporting reviewed thousands of records in california's drug med cal program, including program audits. we analyzed patient billings and even watched clinics undercover to see who was getting treatment and who wasn't. the result, we found the last two fiscal years, nearly half of the $186 million spent for drug med cal, about $94 million went to clinics that have shown questionable billing practices or signs of fraud. case and point. the man with the cigar, a convicted felon named alexander ferdman. >>...

The attorney says oluno was a certified counselor himself, who was allowed to bill medicaid. despite that, the clinic voluntarily shut down july 1st, without explanation. cnn and the center for investigative reporting reviewed thousands of records including program audits. we analyzed patient billings and we 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 194 -- about $94 million went to clinics that had shown questionable billing practices or signs...