Wolf of Wall Street crony's firm raided by FBI over suspected Medicaid fraud

Daniel Porush is listed as an executive vice-president at a company targeted by a lawsuit alleging fraudulent syphoning of government healthcare funds

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The Independent US

The embers of the story that inspired The Wolf of Wall Street, that mixed penny-stock crookery with strippers and illegal substances, may have flickered back to life following a dramatic FBI raid on a medical devices company in Florida where a top executive was the model for a main character in the film.

Agents from the Federal Bureau of Investigation were seen sealing the doors of the headquarters of Med-Care Diabetic & Medical Supplies in Boca Raton on Wednesday and later carting away dozens of boxes of files.

There was no comment from the FBI on the nature of the investigation but the company has been targeted by a lawsuit alleging fraudulent syphoning of government healthcare funds.

Spotted driving away in a white Rolls-Royce was a man identified as Daniel Porush and his wife. Listed as one of the company’s executive vice-presidents, Porush was at one time an associate of Jordan Belfort, who built the stock-peddling firm Stratton Oakmont that was closed down amid scandal in 1995.

 

Belfort wrote the book that inspired The Wolf of Wall Street. He was played in the 2013 film by Leonardo DiCaprio, who won an Oscar nomination for the part. Porush is known to be the figure who inspired the character Donnie Azoff in the film, who was played by Jonah Hill. Both Jordan and Porush were convicted of breaking stock trading laws and each served prison time.

The lawsuit, which is still pending, was initiated by a former employee, who alleges that the company set about persuading beneficiaries of the government’s Medicare and Medicaid programmes for the elderly and the poor to purchase medical equipment they didn’t in fact need.

The suit claims the company was paid more than $84m (£55m) by Medicare between 2009 and 2012 in illicit claims.

Employed to push the devices over the telephone, Tiffany Bumbury said in the lawsuit that she and other telemarketers were told they “did not need always to follow the script and should say whatever they needed to say, and make whatever representations they needed to make, to obtain billing information (including Medicare billing information) and to secure a sale”. An FBI spokeswoman confirmed that the agency was “conducting law enforcement activity”, but provided no further information.

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The FBI raid on Med-Care (Reuters)

A lawyer for the company, meanwhile, suggested it had tried to make contact with an agent regarding the case but had never heard back. “We’re a little disappointed with the process that was followed today,” Justin Weddle said. “But Med-Care remains and will be ready, willing and able to provide full co-operation in this inquiry.” He insisted that the company, which employs about 200 people, “has nothing to hide”.

With its concentration of elderly and low-income residents, southern Florida has long been a hotbed of Medicare and Medicaid fraud. Possible wrongdoing by Med-Care Diabetic & Medical Supplies became the focus of a 2013 Senate subcommittee hearing on Medicare fraud which led to a recommendation that the US government and the FBI step up efforts to seek out and arrest its perpetrators.

Part of what allowed Belfort to build Stratton Oakmont into the huge money mill that it became was the boiler-room call centres with telephone operators fraudulently pumping worthless penny stocks to unsuspecting clients, the so-called “pump-and-dump”.

The film version of the firm’s rise and eventual implosion was directed by Martin Scorsese.

It drew some criticism for its gleeful portrayal of the debauched lifestyles that both Belfort and Porush indulged in. It may also have broken some kind of record by using the F-word over 500 times.

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