Fraud & Investigations

Justice Watch: U.S. Attorney Wifredo Ferrer seeks extra help against three prevalent frauds

Posted on Friday, November 5, 2010

Just outside U.S. Attorney Wifredo Ferrer’s office sits a nervous young attorney waiting for a job interview. When he was finally summoned, another fresh-faced lawyer walked through the door at the James Lawrence King Federal Justice Building and took his place on the love seat.
There is no recession for one of most prestigious districts in the country. The U.S. attorney’s office in Miami is looking to add to its 280-attorney staff. The office has 1,600 resumes in its database and gets 80 more a day.
For Ferrer, staff additions can’t come soon enough. He trumpeted South Florida’s seemingly unlimited capacity for fraud when he took the job five months ago, but fighting it has taxed the office’s resources. Health-care, mortgage and financial fraud dominate Ferrer’s agenda. A prime example is the investigation spawned by rogue lawyer Scott Rothstein’s $1.2 billion Ponzi scheme, which broke new ground in the forfeiture arena.
Ferrer’s day starts at 7:30 a.m. and doesn’t end until at least 8 p.m.
“I can’t believe it’s been five months. It seems longer because the days are so long,” he said. “It’s a huge district, which I knew, but you don’t appreciate it as much until you start on the job.”
Ferrer sat down with the Daily Business Review to talk about his tenure so far.
As South Florida pads its reputation as the nation’s fraud capital, the office’s resources have been stretched. Anticipated arrests of major players connected to the Rothstein fraud have yet to come. Former U.S. bankruptcy trustee panelist Marika Tolz also hasn’t been charged despite failing to return $1 million of Rothstein money entrusted to her by the U.S. Marshals Service for safekeeping.
Rothstein is serving a 50-year sentence, and his law firm’s chief operating officer, Debra Villegas, received a 10-year sentence. The case is far from over, Ferrer said.
“On Rothstein, yes, the investigation is ongoing and, yes, you should expect to see more,” he said
Ferrer said his first action as U.S. attorney was to ask for more resources from the Justice Department.
“We are extremely busy,” he said. “The good news I just heard three weeks ago they agreed with my request for four new prosecutors and support staff to fight Medicare fraud.
The office is buzzing about busting up a chain of mental health clinics accused of bilking Medicare of $200 million by billing for Alzheimer’s and other patients while providing no tangible treatment. The case against American Therapeutic and four employees is an indication of a strategic shift in this prolific fleecing of taxpayers, Ferrer said. Prosecutors had been concentrating on health-care scams involving durable medical equipment such as wheelchairs and HIV infusion clinics.
“It’s the new phase in Medicare fraud,” Ferrer said. “This is the first time a corporation has been indicted for Medicare fraud, and it’s the first wave of cases dealing with mental health clinics. The department hasn’t really dealt with mental health clinics when it comes to Medicare fraud.”
Besides the four new positions, Ferrer added 10 “top-flight” attorneys since June to the office’s major crime division. Ferrer’s interim predecessor, Jeff Sloman, also hired four prosecutors as he went out the door.
Other than health-care fraud, mortgage fraud in the wake of the foreclosure crisis is the district’s biggest problem.
“The scams we are seeing now are outrageous,” Ferrer said. “The fraudsters are targeting the elderly who are vulnerable to losing their homes. They are targeting specific ethnic communities.”
Attorney Curtis Miner, a former federal prosecutor with Colson Hicks Eidson in Coral Gables, said Ferrer is off to a running start.
“I think things are going exactly how people expected when Willy took the helm,” Miner said. “There have been some big busts and some front-page news.”
Miner said during recessionary times it’s no surprise the Justice Department is focusing on fraud, especially fraud at taxpayer expense.

Emphasis On Training
Ferrer said prosecutor training has been given added emphasis and said one of his proudest accomplishments is naming Assistant U.S. Attorney Dawn Bowen as the district’s first training director.
A recent office-wide training session focused on advising assistant U.S. attorneys to advocate for their position at sentencing now that the U.S. Supreme Court has deemed federal sentence guidelines advisory rather than mandatory.
A May memo from U.S. Attorney General Eric Holder spells out the new policy saying a proposed sentence should be weighed on a case-by-case basis.
“It’s a change in culture,” Ferrer said. “We have now realized that because they are discretionary we have to go to court and explain, advocate, argue why or what is the right sentence for a particular sentence.”
He cited the Orlando case of child pornographer William Irey and the 11th U.S. Circuit Court of Appeals decision extending the district judge’s 17-year sentence to the maximum 30 years. Prosecutors stuck to the four corners of their plea deal while the defense stressed mitigating factors, which produced the initial sentence below the advisory guidelines.
“We talked about the case in the office,” Ferrer said. “You have to go through the factors.”
Ferrer at the moment is glad to be back in his hometown of Miami.
Ferrer recently traveled to Colombia with his narcotics section chief and Drug Enforcement Administration officials to meet with high-level government and law enforcement officials on the war on drugs.
He also has spent a lot of time in Washington, mostly advocating for more funding.
“We can do so much more with more resources,” he said. “We are the epicenter of fraud. And that has been my argument in Washington.”
John Pacenti
Daily Business Review

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