Free Flow - Catheters, Harvard, School Vouchers, and Rudy Giuliani
Catheters
Loosely speaking, there are a few ways you could defraud Medicare:
You are a giant healthcare company, and you overcharge the government billions of dollars a year for things they don’t need, or diseases they don’t have
You are a small crew of individuals attempting to bill the government for COVID-19 tests, wheelchairs, or other medical devices you don’t deliver
You are a doctor, nurse, or collection thereof, and you bill Medicare for prescriptions, or procedures patients either don’t need or don’t receive
It is not ideal that we run Medicare this way, with billions in fraud and waste. It is, however, a very American way to run a health system, because our economy functions mostly for the benefit of grifters and middlemen who shave bits off every dollar dribbling through our country’s porous benefits system.
Sometimes, Medicare fraud may take years to uncover, because regulatory resources are spread thin and our health system is needlessly complex by design. Other times, though, it is more obvious:
According to a review of Medicare data by the National Association of Accountable Care Organizations (ACOs), last year Konaniah Medical Supplies billed Medicare a staggering $202 million for catheters. To put this in perspective, that's nearly $50 million more than what Medicare paid out for catheters to all medical providers combined in 2021.
Did Americans suddenly start needing more urinary support in 2023? Probably not! A twenty-five percent bump would have been startling enough, but it didn’t end there:
…according to Texas Secretary of State business filings, Konaniah Medical Supplies also operates under the name G&I Ortho Supply with the listed address in Brooklyn, New York. G&I Ortho billed Medicare an astonishing $436 million for catheters.
[…]
The [ACOs] identified ten medical supply companies that collectively charged Medicare over $3 billion for catheters. Remarkably, most of these companies didn't even exist two years ago, yet they caused a nearly 2,000% increase Medicare billings for catheters.
According to CMS, ‘most’ of the actual payments to these companies for the fake catheters were withheld, though the claims made it through Medicare’s initial system checks to a ‘payable status’. The agency has not said how much of the $3 billion was paid out.
The system we designed to administer care to our elderly and disabled is so fragmented, so mired in bureaucracy and critically understaffed that we aren’t sure how many false and fraudulent claims are being paid out each day, but we know the number is above zero.
Medicare has become such a running joke that the country’s largest insurers and care providers openly defraud it, rightly assuming the worst they’ll receive is a fine or a no-fault plea deal for their troubles.
A network of scam companies trying to bill the government three billion dollars for catheters is funny (dick jokes) but really it’s one of the many ways our government pisses away money it should be spending to care for the elderly.
Harvard
Not everyone trying to steal money has a multibillion-dollar health care company to launder it through. They would need to find other reliable streams of money to tap for their schemes. One of those, it turns out, is Harvard alumni:
Tish James, the New York attorney general, announced that [Vlad] Artamonov had indeed been running a Ponzi scheme, primarily targeting HBS alumni, for two and a half years and that she had succeeded in freezing his accounts. The 31 victims — who include executives at big consulting firms and real-estate corporations, veteran Wall Street professionals, and other very wealthy New Yorkers — who have come forward so far had together lost more than $3 million.
Artamonov attended Harvard Business School, and went on to have an unimpressive career at a hedge fund - hence his decaying financial state and decision to hit up his former classmates for cash. Fortunately, the key bit of his resume, indeed the only thing he needed since he hadn’t worked at the hedge fund he often cited in more than a decade and none of his investors bothered to check, was that he’d gone to HBS.
Ponzi stories like this one tend to be long and sad and sound about the same, and Artamonov’s is no exception. His life was chaotic, dodging overdue rent and a string of bad financial and life choices. Despite this, he was able to channel the important lessons from his MBA program, and project the confidence needed to convincingly lie about fake investment strategies.
Harvard Business School is a bit of a paradox, in that it employs legit academics who sometimes publish interesting case studies and do serious research. It is also a diploma mill for the well-heeled striver class, who are somehow so credulous they’ll sink their 401(k) into a wild-eyed scam from the geeky weirdo they went to college with a decade before.
Perhaps the case is being pursued in civil rather than criminal court because a Harvard MBA scamming other Harvard MBAs is and should be considered a victimless crime by the rest of society.
School Vouchers
The last time we talked about school vouchers, the WSJ reported that Arizona’s flagship program was mostly benefitting kids of well-off parents, many of whom were already in private school. Six months later, how are things going?
Last fiscal year alone, the price tag of universal vouchers in Arizona skyrocketed from an original official estimate of just under $65 million to roughly $332 million, the Grand Canyon analysis found; another $429 million in costs is expected this year.
The state is slashing over $300 million from water infrastructure projects, which will absolutely not cause any issues in a state currently facing a severe water crisis.
What happened? Under a Republican governor, Arizona passed a universal voucher program allowing any parent in the state to receive state money to enroll their child anywhere they desire - the end goal of the conservative push to gut public education.
Prior to the sweeping changes, only poor or disabled students in Arizona qualified for vouchers. The idea was that ‘school choice’ could be used in extreme situations, like when a public school was unable to provide adequate education which, you know, taking money away from said school wasn’t really a solution, but it had been the foot in the door for the privatization lobby.
Now, the children of the wealthy and well-off can siphon hundreds of millions from state budgets to pay a piece of their private tuitions. Pulling more money out of the public school system has accelerated the desired deterioration:
[Arizona] is 49th in the country in per-pupil public school funding, and as a result, year after year, district schools in lower-income areas are plagued by some of the nation’s worst staffing ratios and largest class sizes.
Even if these plans weren’t a ruse, the vouchers in many states wouldn’t come close to covering the cost of a private education. Florida’s newly passed universal voucher program offers $8,500 to parents of all income levels, but that’s of no help to poor families:
Even if her daughter had gotten in, [McCour-Ostrand] said, the voucher would have covered only about $7,000. Tuition at the first school was $20,000. It was $18,700 at the second — not including books, supplies, uniforms, tutoring and other expenses.
Of course, states like Florida and Arizona gifting 9-figure windfalls to the private education industry has enabled waves of grifters eager to snap up those funds:
Of the roughly 2,300 [Florida] private schools accepting vouchers, 69 percent are unaccredited, 58 percent are religious and nearly one-third are for-profit, according to the state education department.
What we are witnessing in many Republican-run states across the country is a voucher movement that has caught the car. Millions of parents are receiving educational welfare checks they don’t need to send their kids to private schools, and that money is cut from already impoverished public systems, the only place the poor and working class can afford to send their kids.
Rudy Giuliani
The news surrounding many of the country’s most unpleasant former politicians has largely been bad these last few weeks, but there is one, small bright spot. Former mayor Rudy Giuliani, when he isn’t falling down at the Republican convention, is racking up a string of legal losses. He’s been disbarred in New York (bad news for anyone who wanted to hire him as their attorney,) had his bankruptcy case dismissed, and is now in the crosshairs of not only his creditors but the bankruptcy court, to whom he also owes money.
If a bankruptcy court thinks you are lying about your assets, it can bring in a forensic accountant to track down the money. Forensic accountants, apparently, are expensive:
…Giuliani owes around $350,000 to a forensic accountant who worked on tracing his assets during the bankruptcy, and a federal judge is following up, with growing frustration, on how to get that bill paid.
One problem with having your bankruptcy thrown out because you keep lying to the judge and hiding assets is that now you don’t have bankruptcy protecting you from having all your assets seized. It can also result in the judge becoming one of your creditors.
Rudy, does not seem particularly worried, and continues to drain his bank accounts to pay condo fees:
[Plaintiff lawyer Rachel Strickland] noted a $14,000 check cashed for his New York condo expenses and $25,000 in fees paid related to another condo he owns in Florida.
Giuliani is estimated to be worth around $10 million dollars, most of which is tied up in his two condos in Florida and New York. He owes $148 million in legal damages to the pair of election workers he spent years defaming, and now hundreds of thousands more to the bankruptcy court. He’s running out of places to hide, and we may soon get the chance to rejoice in the financial ruin of a man who spent most of his public career taking great pleasure from destroying the lives of others.
Short Cons
American Prospect - “What’s noteworthy, then, is the extent to which Crooks has spent his life veritably ensconced in that nexus of the health care system and the carceral state, charged with processing troubled and/or otherwise unwanted souls.”
Bloomberg - “Back in 2015, Haggen Holdings of Bellingham, Washington bought most of the divested stores. Within months, Haggen declared bankruptcy — and most of those locations were gobbled back up by Albertsons.”
AP - “Farm equipment maker John Deere says it will no longer sponsor “social or cultural awareness” events, becoming the latest major U.S. company to distance itself from diversity and inclusion measures after being targeted by conservative backlash.”
In These Times - “It’s clear that the Republican committee members are determined to slash and burn away whatever “excesses” they can find, and nowhere is that more apparent than in their disgusting betrayal of the coal miners their party loves so dearly to pretend to respect.”
NYT - “The police accepted the software’s judgment and Ms. Hemid went home with no further protection. Mr. el Banaisati, who was imprisoned that night, was released the next day. Seven weeks later, he fatally stabbed Ms. Hemid several times in the chest and abdomen before killing himself.”
WIRED - “Despite his anti-elite stance, Vance's [Venmo] connections reveal a more complex relationship with establishment figures.”
Know someone thinking of buying $3 billion worth of catheters? Send them HERE!