A former scam artist tells how it works
Angel Castillo Jr., a convicted drug trafficker who found his calling in healthcare fraud, offered an inside look at Medicare corruption in Miami-Dade.
08/05/2008 3:01 AM
09/08/2014 5:34 PM
He dropped out of high school in ninth grade. Got busted for carrying a load of cocaine. And dabbled in marijuana grow houses.
Angel Castillo Jr. finally found his criminal calling as an entrepreneur in South Florida's multibillion-dollar underground industry -- Medicare fraud.
''I started off driving a Ford Ranger and I ended up driving a Range Rover,'' said Castillo, 33, who is serving a 20-year prison sentence for defrauding millions from the government's healthcare program.
He is cooperating with the U.S. attorney's office and FBI to seek a reduction in his sentence, which is eight times longer than the average Medicare defendant's prison term.
Castillo, who grew up in a Cuban-American family in the Fontainebleau section of West Miami-Dade, controlled about a dozen medical equipment companies -- all incorporated in other people's names to hide his ownership interest so that federal authorities could not trace the businesses to him.
Castillo said he paid a premium for at least three of those companies because they came with recently arrived immigrants already registered as straw owners with Medicare.
Among them: Miami's Garcia Medical Supply Inc., which was headed in June 2006 by Anabel Esquivel, according to state corporation records. She entered the United States as an undocumented Cuban migrant four years earlier.
With Esquivel as Castillo's straw owner, Garcia Medical Supply submitted $3.6 million in false bills with Medicare between June and September 2006, according to federal claims records. Esquivel, who was living in a Hialeah Housing Authority apartment at the time, could not be reached for comment because she has returned to Cuba, according to tenants in her former unit. She has not been charged with any crime, and Garcia Medical is no longer active.
Another one of Castillo's businesses with a straw owner, Rodan Durable Medical Equipment Inc. in Hialeah, billed Medicare for $5.2 million in phony claims between August and November 2006, federal claims records show. Rodan is not in business now either.
Esquivel and other immigrants -- some of whom were smuggled into the United States, according to federal agents and immigration records -- provided extra protection to Medicare scammers from authorities, especially if they returned to Cuba after a short stay.
''I purchased three companies like that,'' Castillo said during a recent interview at the Federal Detention Center in downtown Miami. ``If you want the straws to go back to Cuba, you have to pay the sellers of the companies an extra $30,000.''
FBI agents and other federal authorities confirmed his story.
In total, Castillo was convicted of billing $48 million in false Medicare claims through eight of his medical equipment companies in 2005 and 2006 -- though the three businesses using Cuban migrants as straw owners were not cited in his plea deal, according to court records and federal authorities. His eight healthcare companies raked in about $8 million from the government health insurance program, according to court records. He personally pocketed more than $2 million.
Six other business associates were convicted with him on Medicare fraud charges.
Castillo admits he had no particular skills in the healthcare field. Then again, none were needed. After he served a couple of years in prison on a 1995 cocaine trafficking conviction in Georgia, Castillo learned a trade as an electrician. By the time his five-year probation was over, he was in the marijuana grow-house business.
But that didn't last, either. In 2001, his best friend introduced him to the exploding Medicare fraud economy in Miami-Dade.
''A lot of people who used to be in drugs are getting into this business,'' Castillo said. ``You see it as white collar. There's not a lot of risk.''
Castillo got his foot in the door as a ''check-changer'' for operators of medical equipment companies that were filing false claims with Medicare and receiving hundreds of thousands of dollars in payments.
Castillo's role was to cash checks for less than $10,000 on Medicare accounts at local banks so the real owners could avoid financial reporting requirements to the Treasury Department. His take: 5 percent of each bank transaction.
Soon, Castillo was selling his name as a straw owner for medical equipment suppliers.
But the real money was in controlling the Medicare-approved companies -- a lesson he learned from an acquaintance now under investigation with alleged ties to a massive ring allegedly run by Mabel and Abner Diaz, of Miami Lakes. The former owners of All-Med Billing Corp. pleaded guilty earlier this summer to charges of submitting about $420 million in false Medicare claims for 85 medical equipment suppliers in Miami-Dade. Medicare ended up paying out $148.5 million on those bills. The Diazes' take: a 5 percent commission -- or about $7.5 million.
Castillo said he tapped into a network of relatives, friends and others from his pot-growing days to use as straws for his medical equipment businesses.
ON HIS OWN
''I went out on my own because I wanted to get the same amount of money as everyone else,'' Castillo said, explaining that ``only Cubans were involved. We try to keep it among us.''
To fool the Centers for Medicare and Medicaid Services, Castillo bought elderly patient lists and misappropriated physicians' ID numbers to bill the health insurance program for mattresses, knee braces and artificial limbs, among other items. CMS manages Medicare as part of the U.S. Department of Health and Human Services.
If elderly patients complained to Medicare about a bill for something, Castillo said he would bribe them to shut them up.
The goal was to churn claims as fast as possible without being detected. He said local Medicare billing companies -- such as All-Med -- became the ''eyes and ears'' for the equipment providers because they knew which supplies and codes would be approved by Medicare's private claims contractors.
So much money was pouring in that Castillo bribed bank tellers to let his associates pick up bags of cash totaling as much as $100,000 from Bank of America, Union Planters and Washington Mutual, court records show. One teller in the scheme, Michelle Torres, was charged with money laundering and fled to the Dominican Republic, according to the FBI.
Asked if it bothered him that he was stealing from the U.S. government, he said: ``You want money for yourself -- it's greed. You don't see it as wrong. You see it as white collar. There's not a lot of risk. You don't live in fear because you don't think you'll ever get caught.''
For a few years, Medicare made Castillo a millionaire.
He rented an upscale South Beach apartment at the Portofino Tower, met his future wife at the Clevelander Hotel and ate all his meals at restaurants like China Grill, Houston's and Benihana. He bought $50,000 diamond necklaces, a Rolex and other expensive jewelry off shopping networks on cable television.
In December 2005, he said he put down $200,000 in cash to buy a four-bedroom, three-bath home for $570,000 in Cutler Bay.
''It changed my lifestyle 180 degrees,'' he said.
Castillo's life as a high-roller crashed last year. Two of his associates, Angel Hernandez Quesada and Juan A. Zaragoza, while under indictment, snitched on him. And it was only a matter of months before Castillo cut a plea deal.
But now -- separated from his wife and their 6-year-old son by prison bars -- Castillo regrets his career choice.
''If I knew I would have gotten 20 years, I wouldn't have done it,'' Castillo said. ``It's not a joke. We're taking money from the government that's for our seniors. Me and a lot of other people did the wrong thing with our money.''
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