First in a series

Whenever Alexander McCray lights up his crack pipe, U.S. taxpayers help pay for his habit.

McCray has defrauded Medicare by selling his government-issued health card number to private clinics in exchange for kickbacks of $150 to $300 a visit -- as often as three times a day, three times a week over seven years, according to federal records and his own admission.

McCray has signed off on phony infusion treatments for his HIV illness -- therapy that is medically obsolete -- and he has received thousands of dollars from Medicare-licensed clinics all over South Florida.

Money that he has used to buy crack cocaine.

Dozens of clinic operators have in turn filed more than $1.1 million in false claims for fabricated HIV-infusion treatments billed in his name, according to Medicare records reviewed by The Miami Herald. Some 90 doctors, including one indicted in May, appeared on the phony prescriptions written on behalf of McCray.

''I'm the king of it all,'' the 40-year-old, unemployed Opa-locka man told The Miami Herald recently, when asked about his Medicare scams.

McCray, a ''professional patient'' with a 15-year criminal history of drug possession, is among thousands of con artists who have made South Florida the nation's capital of Medicare fraud. A six-month Miami Herald investigation has found that the corruption has spun out of control during the past decade with little effort by Medicare regulators to stop it here and in other major cities. This past week, during a policy forum on the crisis, federal lawmakers estimated that Medicare fraud costs taxpayers nationwide at least $60 billion a year.

The Centers for Medicare and Medicaid Services, which manages the 43-year-old federal insurance program for the elderly and disabled, doesn't have a specific amount for the cost of corruption nationwide. Internal audits mainly focus on billing mistakes, excessive payments and other waste with only a fractional measure of fraud. Therefore, the agency estimates its combined loss is $11 billion annually.

Private healthcare companies, credit card companies and other industries have implemented new technology to fight fraud aggressively, but Medicare has failed to adopt even the most basic changes that the U.S. Department of Health and Human Services' inspector general has warned are sorely needed to combat the crisis.

Medicare, one of the government's largest agencies, seems more intent on paying claims quickly than verifying them first, according to many critics and law enforcement officials.

DRUG INFUSION

Consider this statistic: In 2005, South Florida clinics -- mostly concentrated in Miami-Dade -- submitted $2.2 billion in HIV-drug infusion bills to Medicare, according to the inspector general. That was 22 times more than the total HIV infusion claims submitted to Medicare by healthcare clinics in the rest of the country combined. The trend continues to this day.

In addition, false claims for medical supplies such as motorized wheelchairs, glucose monitors and oxygen equipment run into the hundreds of millions of dollars annually in South Florida.

These two areas of healthcare corruption, which have become targets of heightened federal prosecutions, account for at least $2.5 billion in Medicare fraud annually in South Florida, according to authorities. But that figure is conservative because it excludes other areas of potential Medicare fraud -- hospitals, home healthcare assistance and prescription drugs.

Still, the medicial equipment and HIV-infusion schemes alone add up to at least $7 million in Medicare fraud daily in South Florida, where a sprawling cast of illegal HIV-therapy clinics, bogus suppliers, inner-city patient recruiters, complicit doctors and devious billing companies have even used the names of dead doctors to bilk the U.S. government out of billions of Medicare dollars.

''I knew Miami was bad, but I was shocked when I got here,'' said Timothy Delaney, assistant special agent in charge of the FBI's office in Miami and the head of the bureau's national healthcare fraud program from 2000 to 2004. ``There is fraud here like nowhere else in the country. Los Angeles is second, but nowhere like it is here.''

South Florida's U.S. attorney, R. Alexander Acosta, placed much of the blame on Medicare and its system of screening bills, saying its poor oversight forces authorities to chase criminals long after they have absconded with taxpayer dollars. Little of the money is recovered.

''At a time when we're trying to find billions of dollars to pay for healthcare in this country, it's disgusting that so much money is being wasted because of Medicare fraud,'' Acosta said.

Kimberly Brandt, director of program integrity at the Centers for Medicare and Medicaid Services, said there's only so much the agency can do to protect the system because of limited resources. Congress has appropriated $720 million to combat fraud, with no increase in the past three years. That's a small piece of Medicare's $432 billion annual budget.

''I think the important thing for people to understand is that this didn't happen overnight, and it's not something Medicare could have detected overnight,'' she said.

Federal authorities are often unable to track down Medicare fraud culprits who flee the country.

A Miami Herald review of FBI, U.S. attorney and federal court records found that at least 56 of the roughly 700 Medicare fraud defendants are fugitives -- with at least 18 suspected of having fled to Cuba during the past five years. The others went to Mexico, the Dominican Republic, Colombia, Canada, Europe or are still in Florida.

Federal authorities and experts who have followed Medicare fraud say the South Florida perpetrators are not unlike segments of immigrant groups in other major cities who band together to abuse the system because of an implicit trust.

Cuban immigrants make up the vast majority of defendants prosecuted on charges of submitting billions of dollars in false Medicare claims since 2004, records show.

Among them: The Benitez brothers, charged with defrauding Medicare by billing $110 million in false claims for HIV-drug infusion treatments at their dozen clinics

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