Loaded Diapers

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39203514 - banknotes of one hundred dollars lying in neat rows as a background

Diapers have been known to hold a lot, and a mother-daughter team decided to use them to hold something a little different. The diaper duo concealed approximately $2.4 million in cash in diapers and baby towels that were hidden in their luggage on a trip to Miami from the Dominican Republic. The incident connected the two to a $20 million Medicare scam.

The mother and daughter were co-owners and operators of seven home healthcare companies in Miami-Dade County that provided services to Medicare beneficiaries. Over five years, the two women built up a fake customer base by paying bribes and kickbacks to patient recruiters who referred Medicare beneficiaries to their businesses. (Some of the referrals did not actually qualify for home healthcare.) They also paid doctors and medical professionals to provide prescriptions for the patients to make everything appear legitimate.

In total, Medicare paid about $20 million to the two fraudsters. The daughter directed subordinates to create companies under which she and her mother could deposit the ill-gained Medicare funds. (But, it ‘s hard to hide a full diaper. Eventually, their scheme was discovered.)

Both defendants violated the court system by tampering with prosecution witnesses. The two women claimed that they gave a co-conspirator a loan and told him to say as much; however, the co-conspirator testified that it was a kickback for aiding in the fraudulent scheme. Trial evidence also showed that they had paid other people to pose as owners of the home healthcare companies to hide the mother-daughter involvement.

The 62-year-old mother took the blame for the large stash of cash in both pieces of luggage and pleaded guilty to bulk cash smuggling into the U.S. She was already serving a three-year prison sentence when she also pleaded guilty to charges related to running the $20 million Medicare scam through her home healthcare agencies. She was found guilty on one count of conspiracy to commit healthcare fraud and one count of healthcare fraud. Her 40-year-old daughter also pleaded guilty to one count of conspiracy to commit healthcare fraud and wire fraud. Both are scheduled to be sentenced for their involvement in the Medicare fraud scheme.

These two women acted similarly to other Medicare fraudsters who usually liquidate their assets in order to leave the country undetected. (The daughter also tried to claim that she only had $700 to her name by omitting multiple properties from the asset list presented to the court.) Fortunately, the government smelled fraud when they found a lot of cash amongst the diapers. ¬†(It remains to be seen what the sentencing will be in this case, but after all that has happened, I’m guessing these two will be in the adult “daycare” facility known as prison.)

Source: Today’s “Fraud of the Day” is based on an article entitled, “Mom and daughter who hid millions in diapers plead guilty to Medicare fraud,” published by The Miami Herald on March 6, 2017.

A mother and daughter who hid $2.4 million cash in diapers and baby towels when returning to Miami from the Dominican Republic pleaded guilty to running a $20 million Medicare scam through their Miami-Dade home healthcare agencies.

Mildrey Gonzalez, 62, pleaded guilty in U.S. District Court to one count of conspiracy to commit healthcare fraud and one count of healthcare fraud. Milka Alfaro, 40, pleaded guilty to one count of conspiracy to commit healthcare fraud and one count of wire fraud.

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Larry Benson
Larry Benson is currently the Director of Strategic Alliances for Revenue Discovery and Recovery at LexisNexis Risk Solutions. In this role, Benson is responsible for developing partnerships for the tax and revenue and child support enforcement verticals. He focuses on embedded companies that have a need for third-party analytics to enhance their current offerings.