Feb 12, 1:19 PM EST


Pretrial delay lets military health fraud suspects in Philippines off the hook

By RYAN J. FOLEY
Associated Press Writer

MADISON, Wis. (AP) -- A dozen defendants who allegedly swindled the military's health care program out of hundreds of thousands of dollars in the Philippines won't face justice or pay any restitution after authorities failed to arrest them.

The U.S. Attorney's Office in Madison, Wis., has dismissed indictments against the suspects - Philippine doctors, spouses of military retirees and one Navy veteran - because of lengthy pretrial delays.

Several of them had confessed to their roles in schemes in the 1990s and early 2000s in which they filed fraudulent claims to the military's Tricare program, which paid out money to cover health services never provided, court records show. They were indicted between 1999 and 2003 as part of an investigation into widespread Tricare fraud.

But U.S. authorities failed to bring them to justice. They decided to wait for the suspects to step foot on U.S. soil so they could be arrested but they either never did or weren't caught. In 2006, prosecutors finally asked the Philippines government to arrest and extradite five of the suspects but those attempts failed.

The 12 cases were dismissed last month after U.S. District Judge Barbara Crabb in November threw out an indictment against a Filipino doctor accused of submitting $2 million in fraudulent claims. Crabb said his right to a speedy trial was violated because investigators waited until 2008 to arrest him when he set foot in Guam, four years after he was indicted.

Crabb said the delay made it difficult for the doctor to prepare a defense because the passage of time meant the memories of witnesses had faded. She said prosecutors' "decision to do nothing for more than four years" wasn't justified.

Based on that ruling, Assistant U.S. Attorney Peter Jarosz said it was clear he had to dismiss cases against the others. He said it is difficult to quantify the exact amount they were accused of obtaining fraudulently. Court documents suggest it was at least $400,000 but likely more since prosecutors did not file charges for every suspect claim.

Among those getting off the hook is a doctor who told investigators how she would make false claims on behalf of military retirees and their dependents and then give them a portion of the money.

She gave investigators two log books filled with the names of patients her clinic had falsely claimed to treat. "I know it was fraudulent but I just took the risk," she told investigators.

Also getting off:

- A U.S. Navy retiree, who was accused of working with a doctor to submit 21 false claims for him and his dependents totaling $133,000.

- The wife of a retired Marine who submitted false claims totaling $49,000 for her and her child.

- The wife of a retired U.S. Air Force serviceman who said she used her windfall to pay for her children's education. "I know what I am doing is wrong," the woman told investigators.

The defendants never appeared in U.S. court or even had defense attorneys since the cases never got off the ground.

Prosecutors have defended their decision not to seek extradition in some cases, arguing the Philippines government would likely fail to execute the request or botch it. They cited one example in which a suspect learned of his warrant through a newspaper and went underground.

In November's ruling, Crabb wrote the decision to wait for suspects to step on U.S. soil might have been reasonable initially "but as time wore on, it became all the more pressing for the government to do something."

The ruling and dismissals were a setback for an investigation that has otherwise won praise. More than a dozen people have been convicted of Tricare fraud in recent years, including U.S. military retirees. The probe is handled by Wisconsin-based federal prosecutors because WPS Health Insurance in Madison holds the contract to process many of the claims.

In the biggest case, Health Visions Corp. submitted fraudulent and inflated claims to bilk the U.S. government of $100 million between 1998 and 2004. The company and a former executive have been ordered to pay back the full amount and the government is in the process of trying to recoup some money from the sale of its assets.

A string of internal audits have faulted the Pentagon's management of Tricare, warning that lax controls make the program vulnerable to fraud overseas. Its managers say they are taking steps to tighten them but note the complexity of a program that provides benefits all over the globe.


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End of Associated Press Release