Real Name: Sheldon Weinberg
Aliases: None Known
Wanted For: Fraud
Missing Since: January 1989
Details: Sheldon Weinberg and his two sons ran a successful free clinic for the poor in Brooklyn. His son Jay was the company's co-administrator. His other son Ronald helped supervise the day-to-day operations. Behind the scenes, they were defrauding Medicaid by submitting false billing claims, stealing $28 million. It is believed to be the greatest case of medicaid fraud in American history.
The Weinbergs were originally in the garment business until their warehouse burned down. While foul play may have been suspect, authorities ruled the cause of the fire inconclusive. They then moved into the healthcare field, opening their clinic. They called it the "Bed-Stuy Health Care Clinic." It employed over twenty-five physicians and primarily cared for Medicaid recipients. Actuaries believe the fraud began in 1978, when they coaxed a physician into submitting false billings to the government. Eventually, the clinic was submitting up to $30,000 a week in fraudulent billings. A small percentage of the defalcations went to upgrades and clinic essentials; with most of it being used for the personal gain and enjoyment of the Weinbergs.
To steal even more money, they began to use a computer to bill for non-existent patients. Their profits jumped from thousands to millions. The computer program allowed for a large volume of patients to be billed to a facility and for phony medical records to be created for these patients. The program also created two separate sets of records. One set contained all of the medical records, including the fraudulent ones. The other contained only the legitimate records, to help throw doctors, accountants, and investigators off the track.
Sheldon Weinberg and his sons lived large on the taxpayers' dime, using the ill-gotten payments to reside in the choicest suites in New York City, buy extravagant summer homes in Florida, acquire a fleet of classic cars, and expand into high-risk investments. Investigators were alerted of the Weinberg scheme in 1986 when a dentist who worked at the clinic and was aware of the scam was arrested after trying to deposit large Medicaid checks at a New Jersey bank. The dentist agreed to cooperate with them.
Investigators examined the medical and payment records from the Weinberg clinic. They found improbable medical statistics in the medicaid payments, such as patients being treated on days the clinic was closed, children being treated for tobacco addiction and severe alcoholism, men being treated for gynecological problems, and women being treated for prostate cancer. Investigators determined fraud when the employee records of the clinic were found, and some patients were interrogated, most claiming that they made one or two visits in the past year, not fifty or sixty like the billing statements said.
In August of 1986, the FBI closed in. In 1987, Sheldon Weinberg's sons Jay and Ronald were arrested and charged with grand larceny and conspiracy. In November of 1988, they were convicted on all charges; Ronald was sentenced to five years in prison, while Jay was sentenced to eight years in prison, plus additional years for tax evasion. Sheldon was also arrested and convicted of the charges; however, he and his wife Roslyn fled in January of 1989 before his sentencing. He is believed to be in Florida.
Extra Notes: This case first aired on the May 17, 1989 episode. It was excluded from Amazon Prime episodes.
Results: Captured. On the night of the broadcast, an anonymous tip led FBI agents to Weinberg's apartment in Scottsdale, Arizona, where he was arrested. He and his wife were using the names "Mark and Ann DiVita". He was extradited back to New York to begin his seven to twenty-one year sentence. At his sentencing hearing, judge Ruth Moskowitz heavily chastised Sheldon Weinberg over his abuse of the Medicaid system to pamper himself and his life. Authorities have recovered less than half of the money that Sheldon and his sons stole from taxpayers.
Sheldon Weinberg served sixteen years in prison before his release; he died in 2007 at the age of eighty-three. Both Jay and Ronald Weinberg spent several years in prison; they have also since been released. However, in August of 2009, Jay was arrested again on fraud and grand larceny charges. He allegedly stole $41,000 from three women in an investment scam.
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