$150 million settlement for $2 billion defraud

In Sep,12 2011 NJ Federal Court set up a settlement between Maxim Healthcare Systems and U.S Government’s medical system. The biggest health insurance defraud that involved with 2 billion dollars was ended up with 150 billion dollars compansation. Maxim Healthcare will pay 20 million dollar cash penalty and provide 130 million dollar service to retired soldiers exchange for the 2 billion dollars they stole from the government from 2003 to 2009.

A few years ago, Richard West, resident in NJ reported his case to federal government. His Medicare service was reduced and was facing to be eliminated because he over used the service provide by Maxim Healthcare. He made a further research and found out that Maxim Healthcare used his name to claim money from the government. Federal government spent 5 years to investigate his case and found out that 735 hours was charged for no service. In 2009 the nine high rank managers in Mixim Healthcare admitted of defraud. The owner of the company is not yet being charged because the investigation is still in the process.

The interesting part is that before the investigation is finished the case was settled. We don’t know how much money Federal government spent in the five years investigation. All we know is that the settlement end up is: Maxim insurance will pay 20 million dollar penalty to the government and provide equivalent to $120 million service to retire soldiers.

The 2 billion dollars government stole by Mixim Healthcare in all these years was written off in 123 like that. It was considered legally lost and Federal government will never run after for that. The $20 million penalty was not even enough to cover the court fee and the investigation fee government spent in last five years.

Another interesting end up is that: Richard West who has health insurance coverage from the government got 15 million dollars reward. He spent not even a penny in the medical treatment or in the investigation process and he got the big reward. Federal court forgot about the governments lost and considers he is the only victim. How about the other people whose quota were used for the defraud claims. Are they entitled to get the same high compensations as well?

Taxpayers’ benifit is not being protected well even in the Federal Court. This is the biggest medical settlement with the Federal government in history. This is also the most ridiculer settlement in the history of the United States. It tells us why U.S government has such a big deficit.

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