Speaker 1: 0:00

Okay, we're doing Justice, then Justice. Now we're doing the podcast now with Paul Pelletier. Paul is an attorney for many years. I've known him since the 1990s, further explained with Evelyn Bazone-Papa and Carlos Romero-Payes, and that he is very relaxed tonight and we share a lot in common. There are a few discrepancies that we have, but we're Boston sports fans and we're here to talk about his career and cases that he had that were very unique to Miami and also when he went up to Washington prosecuting people there and served at the Department of Justice for many years, and now he's in private practice and I'm glad and I'll use the word loosely honored to have him on the show because this is something we want to do and his legal expertise is A+++ with that. So I'll let Paul explain. Jeff will probably ask the layman questions. So, anyway, good evening.

Speaker 2: 1:27

Good evening, Toby.

Speaker 3: 1:27

Thank you for having me on Good evening, jeff. So, paul, I know we we we had like an hour long interview, you know, like six months ago, but this, I think, is going to air before that. So maybe if you could catch all of these viewers up on just where you're from, how you know where you're from and what got you to the start of your career.

Speaker 2: 1:49

Sure. Well, first of all, I'm from Massachusetts. Like Toby, I grew up in a small town in Massachusetts in the 60s and I, like Toby, was a delinquent as well, I'm sure. And when I graduated from, while I was going to college, I ended up joining the Dighton Police Force, which was my hometown. I was a cop for a bit on the Dighton Police Force while I was going to college and I was not the favorite to be hired of most of the police officers because most of them had chased me during my formative years growing up. Anyway, it was a very interesting experience and it helped me through both college and then I went to law school.

Speaker 2: 2:39

I was a bartender and waiter through law school, really wanted to do public service, use my law degree to do public service and hopefully as a prosecutor. I was fortunate enough to have done well in law school. I got two judicial clerkships a trial clerkship and a appellate clerkship at the Colorado Supreme Court. Absolutely loved all of it. I wanted to be a prosecutor. I wanted to be a federal prosecutor and, like most of the federal agents and prosecutors you'll talk to, I wanted to make a difference. I wanted to make the biggest difference I could through public service and I was fortunate enough to get a job in the tax division of the Department of Justice. I got rejected my first two applications to them. While I was doing my clerkships I sent a letter telling them they were making a big mistake by not hiring me and I got an interview finally and I got hired in the tax. It was a wonderful, wonderful job by virtue of being in the tax division.

Speaker 2: 3:50

It was before money laundering was a crime. So before money and, believe it or not, there was a time before money laundering was a crime and that was any time before 1986. So I started in the tax division in 1984 and because drug trafficking was a huge problem in Miami and in southern Florida, I got sent down there from the tax division and one of the ways we would seize money back then, without any really adequate money laundering or asset forfeiture laws when we found money on drug traffickers we would assess their tax liability right there, right that day, and we would collect half of it as penalties and taxes and we would take it away from them and they were entitled to a trial before a judge within 48 hours of that. So it was fast and furious. We would take money from drug traffickers and we would assess their liability immediately. We called them jeopardy assessments and we would take their money and they would get a hearing in 48 hours. Most people didn't want to have a hearing because they didn't want to actually testify about how they got the money, but many times we took the money that was earmarked for attorneys and the attorneys would fight for it, and so I went up.

Speaker 2: 5:16

I started my career in the Department of Justice, fighting attorneys in South Florida who were taking money from drug traffickers and, for the most part, winning all of them. One of the attorneys I went up against was a guy by the name of Mel Kessler, who went by the name Dirty. Mel Kessler, because he was a dirty lawyer, was ultimately convicted, but he was one of the first people I went up against because I seized money in an envelope that had his name on it. So that's how I got my teeth into South Florida. I loved the judges down there. I loved the action down there. It was just.

Speaker 2: 5:51

It was an absolute crazy, crazy, crazy time. It was probably complete anarchy and it was in 1986, it was settled down a little bit because the money laundering laws came into effect, the sentencing guidelines came into effect, the sentencing guidelines came into effect, the minimum mandatory laws came into effect all at the same time. The Rule 35 came into effect, where only the government can move to reduce sentences, which gave prosecutors incredible power to reward people who cooperated up the chain, which was essential to taking out entire drug trafficking organizations. And it was just a fantastic time to be in Miami. So what I decided to do is leave the tax division and join the US Attorney's Office of Miami in 1988, late, late, late 1988. That's how I ended up in Miami.

Speaker 3: 6:43

So, like, if you're a defense attorney and you're fighting for drug money, is there, is there any stigma attached to that? Or like, do you kind of get put in a group In?

Speaker 2: 6:52

1984, 85 and 86, there was zero stigma attached to that Every. It wasn't even illegal to launder money back then, so people were proud to do it, as Toby can attest. There was so much money sloshing around from defendants to attorneys. It was crazy and one of the things I did once I got safely ensconced in Miami, as I made it my mission to prosecute defense attorneys who are laundering money, and that's because it was a crime number one.

Speaker 2: 7:30

Number two I perceived it to be part of the problem down there. And number three I recognize that if you prosecuted one criminal defense attorney, it would reverberate around the country and so it would have a tremendous impact both on what we did as prosecutors and on the business of drug trafficking. So I sort of made it a specialty of prosecuting criminal defense attorneys and encouraging my fellow prosecutors to do the same. I wasn't invited to a lot of defense attorney parties back then. No, I wasn't invited to any dinners. I was probably one of the most hated prosecutors in Miami by the defense bar, but it was a unique opportunity to make a difference by actually showing no fear and going after criminal defense attorneys.

Speaker 1: 8:20

Let me ask a quick question, because this is something historical. I don't know and if you could explain it, paul, when did the Nebia hearings come into effect for counsel, as far as clients paying and whether or not the money was tainted?

Speaker 2: 8:38

All right. So a Nebia hearing for those who don't know, it is a hearing named after a person named Nebia and that came in the after money laundering became a crime, in 86, to the best of my knowledge, I didn't become a criminal prosecutor until 87, 88, actually so. But a Nebbia hearing is where if a person wants to post money for a bond, then they have to prove that the money they're posting for a bond came from a legitimate source, and that was a Nebbia Herring. We used to have plenty of those. And, quite frankly, another thing that came into effect in 1986, I told you that the entire dynamic changed in 1986.

Speaker 2: 9:24

Up until 1986, the criminals and the drug traffickers were in charge.

Speaker 2: 9:33

They were absolutely in charge of South Florida.

Speaker 2: 9:34

In 1986, because of the money laundering laws, because of the sentencing guidelines, because of the minimum mandatories, because of Rule 35, meaning only prosecutors could reward cooperation through a reduction of sentence because before 1986, defendants could move to reduce their own sentence.

Speaker 2: 9:53

In 1986, they couldn't anymore. And finally, what I didn't mention before, the Bail Reform Act came into effect in 1986, where if you were charged with a drug trafficking crime that warranted a sentence of 10 or more years, you were presumed to be a danger to the community and a risk of flight. Therefore you were detained pending trial, and being detained pending trial which didn't happen before 1986, very often was it was a unique way to baptize drug traffickers immediately with the consequences of their behavior and make them recognize that they're going to be sitting in jail from the day of their arrest to the day they're released upon the service of their sentence, which typically in Miami was somewhere between 10 and 30 years. So it gave them an incredible incentive to cooperate that um um cooperation with a sentencing reduction, an absolute sea change in how we dealt with crimes, criminals and drug traffickers in south florida. It allowed us, as both federal agents and prosecutors, to literally take charge of the of the of the drug trafficking organizations.

Speaker 3: 11:25

So all this stuff happening in 1986 or around then, is it everything just kind of coincidentally happening at the same time, or is it a concerted push by, like a group of people, to achieve a common goal?

Speaker 2: 11:38

So it's a great question. It was when Congress used to work question. It was when Congress used to work. So it was literally people all working together law enforcement, congress, sentencing commission all working together to see how they could fix a problem of lawlessness which had, basically Miami was ground zero. Everybody knew that problem of lawlessness, which had basically Miami was ground zero. Everybody knew that. And so it was everybody pulling their oars together Republicans, democrats, everybody doing what they needed to do to take control of the situation which ultimately, as Toby can attest, it was an incredible toolbox that we were given.

Speaker 3: 12:24

And when you're going after one of these lawyers, you know obviously they're probably going to fight harder for themselves than they will for any other client. Is it like big game hunting for you? Is it like a way harder than just getting a squirrel off your fence?

Speaker 2: 12:39

It's way, it is way, way, way harder. Why? Because, number one, lawyers you know when you, when you charge drug traffickers, they know it's part of the business, right. They know that if they get caught, that's it. Lawyers don't expect to be defendants for participating in their activities of facilitating drug traffickers. So you're literally these are people that are the, you know, the upper echelons of their community. They are people that you know go to sleep at night thinking that, number one, they're never getting caught but that they haven't done anything wrong for the most part. One, they're never getting caught but that they haven't done anything wrong for the most part. Or they conceal what they do wrong from their family members.

Speaker 2: 13:29

And it is some of the most difficult street fighting I was ever engaged in. It's very difficult. I would have bar complaints filed against me consistently. Bar complaints are when they file complaints seeking to take away my license for doing what they say is illegal things or unlawful things or improper things. So I spent a lot of time fighting bar complaints to keep my license. It was a very I'm not going to say unrewarded, because in the end it was very rewarding but very challenging time as a prosecutor, and and and it was something that me and a team of prosecutors at the US Attorney's Office circled our wagons around and we persistently did it. I think we convicted about five ex-AUSAs in our endeavors, but it was. It was a movement.

Speaker 2: 14:28

And what kind of punishment would these guys get generally? Oh, they would get substantial penalties depending on what they were charged with. But the money laundering laws typically were very tough on people. They had a maximum sentence of 20 years. So you could sentence people to a long time. Jerry Remy, one of the lawyers that I prosecuted and convicted, he got 17 years. I mean you could get a lot of time. Most of them got around five, sometimes two or three, but remember two years for a lawyer, you lose your bar license, you lose your ability. I mean it is a long time, but I've gotten everywhere, from two to 17 years from criminal defense lawyers who are convicted.

Speaker 2: 15:20

Wow, so after 1986, did the lot of individual lawyers who hung out their own shingle? Former prosecutors, former public defenders, and they would hang out their own shingle. That was something unique about Miami. A lot of big cities that you go to, it's law firms that represent criminal defendants, even in the drug business, but Miami it was a lot of individual people. So when you said, did the quality of lawyer change? No, but we did change the dynamic extensively and demonstrably in a drug trafficker's ability to pay lawyers with drug cash. We changed that dynamic incredibly drug cash.

Speaker 3: 16:08

We changed that dynamic incredibly. So maybe, like the super high end ones, wouldn't maybe want to take the risk or couldn't be rewarded, you know.

Speaker 2: 16:12

Or they would ask the court before they would take money. They would ask the court to to sort of bless the legitimacy of the money, which was a difficult thing to do when you're representing a drug kingpin or a cartel leader. You know what I mean.

Speaker 3: 16:27

Yeah, yeah, so you're in Miami. Toby's in Miami. Where did you guys first cross paths?

Speaker 2: 16:36

I think it was in a bar Tobacco.

Speaker 1: 16:37

Road, probably you know it was where they had beer specials and all that.

Speaker 2: 16:47

Local gin joint. But no, toby was obviously known to drug prosecutors in Miami. Miami, we would. You know, I had a fabulous experience with both the DEA, with Customs, with FBI. Actually they were tremendous in the drug arena. It was just a unique time in Miami where all resources really came together and we used to hang. I don't see it happening today, but we used to drink with uh with uh agents, we would play softball with agents, we would hang out with agents. It was, it was a fantastic atmosphere in which everybody sort of was, um, uniquely positioned to number one, hang out but really make a difference in in in the drug arena in south florida yeah, I'm sure, uh, you, you had so many cases that it's probably a blur for most of them.

Speaker 3: 17:50

But what? What's like? One that sticks out in your mind that you're the most proud of, or the most unique, or, uh, the craziest?

Speaker 2: 17:56

there's a little bit there. God, that's a good question. It's a lot, a lot, a lot, a lot. Probably the one that I would say is the most unique, I mean, I would tell people that every conspiracy in Miami drug conspiracy involves all the same people. Right, because these organizations, these drug trafficking organizations, would share people all the time. Right, they had different leaders, but they would share people all the time.

Speaker 2: 18:31

And I prosecuted this one organization in Miami that was particularly prolific and we called it the Alex DeCubis Organization, forward-looking infrared camera to videotape at night, off of the Bahamas, offload from a freighter of about 4,000 kilos, and we actually videotaped the whole thing from a Coast Guard helicopter. That was sort of very quiet. It was a single, it was one man, it was sort of like these little airplanes, you see, which is just one guy in it and there's a thing. So it was very quiet, although if he got close enough you could hear it. But it was the first time we ever in South Florida had videotaped through a flare camera the offload of a freighter of cocaine. And then we watched as we sort of splintered off. I ended up, along with my friends, in the attorney's office in Miami. We ended up indicting about 200 people in this organization, both importers and exporters. But we never got our hands on Alex Kubis, who was sort of running the importation end of it in Miami. He was sort of a local hero. He was a wrestler at Palmetto High School and he was featured in Sports Illustrated and he's a heavyweight wrestler. And so I had my focus on him for a while, traced him, tracked him all around the world, through Brazil into Colombia, took me 14 years but we got him 14 years later.

Speaker 2: 20:26

But in the meantime we ended up arresting a whole slew of other people. You know seized the freighter, the Nerma, which is a huge coastal freighter that would actually do freight, but they would put the cocaine in the holds of the ship to hide it in the ballast tanks to hide it. So when Coast Guard would come on board they would never check the ballast tanks and it. So when coast guard would come on board they would never check the ballast tanks. And that's that's where it was and they had. They had brought in before this five other loads at four thousand kilos a piece. It was a pretty major organization. It was run out of barranquilla by this uh kingpin of the north coast cartel by the name of Julio Nasser David. So we traced, like everything else it's like putting a puzzle together to look back on sort of how the organization ran and who was involved. And that's how we sort of historically, went back and indicted 200 people and convicted virtually every single one of them. Indicted 200 people and convicted virtually every single one of them.

Speaker 2: 21:45

But we found out that the NERMA was purchased for $1.3 million by 13 $100,000 cashier's checks bought at UBS in Panama. And this was before they had arrested. This was 1987, it was before they had arrested Noriega. So, if you may or may not recall, once Noriega was a problem. All of the financial institutions moved out of Panama for a bit. But Panama was sort of the Western financial capital of the world. They were the Switzerland of the world, they were the switzerland of of the of the west, and all the banks moved out pretty much when they became a drug trafficking haven under noriega.

Speaker 2: 22:30

So I subpoenaed, oh I put out extradition warrants, that's what what it was for Julio Nassar David and his wife in Switzerland, because UBS had moved all of his money back to we presumed back to Switzerland by the name of Casper Duno, who was a chauffeur to Julio Nasser David's wife Shayla, in Switzerland, and I'll bring all this story together for a minute, but just sort of how things worked. So the Swiss magistrate called me and said you have an arrest warrant, and, by the way, we're not supposed to talk to foreign judges or stuff like that, we have an Office of International Affairs that's supposed to go to them, but I didn't care about that stuff. So he called me and said you know, we have a warrant, international arrest warrant, for Julio Nassar David. Are you still interested in him? Will you own Astro David? Are you still interested in him?

Speaker 2: 23:36

I said yeah, and they said well, you know, we've arrested the chauffeur to his wife here in Switzerland. And I said, yes. I said we believe he has money in Switzerland. I've sent some MLAT requests over there. Mlat is a mutual legal assistance treaty request.

Speaker 2: 24:05

And so he said well, you know you don't have the name of the right account on the MLAT request. And I said well, I'm not surprised there, I don't know what the name of the account is. He said, well, you have to figure that out. So we fooled around, fooled around, and I had no idea what the name of the account was. I guessed and he would tell me. You know, swiss bank secrecy is a very important thing over there. They don't do anything.

Speaker 2: 24:39

So he said well, I won't seize the accounts now, because in order to forfeit any money he had over there, we had to have a live defendant in court to forfeit the money in Switzerland and I had no life to defend it. I hadn't even indicted his wife yet. So I said give me time to charge his wife and of course I'm not supposed to have any of these conversations with him. Give me a time to indict his wife. And I said but will she be free to spend it while this process takes place? He goes, yeah, of course.

Speaker 2: 25:19

I said well, jesus, I don't want her spending the money. He said look, don't worry, it's going to be hard for her to spend all the money in there. And I said how much money is there? He said I can't tell you. So anyway, I put together a case against her, which was fairly difficult, and so ultimately we indicted her. He arrested her and I said is the money secure? He said yes. I said tell me how much she spent. He goes 7 million. I go oh, my God, you're kidding me. He goes, don't worry about it. He says there's 200 million left in the account, I said, oh my God, that's unbelievable. So we seized the money, brought it all back to the United States. At the time it made the Guinness Book of World Records as the largest drug cashier ever. But it's just sort of how things worked in Miami. Any case could have turned into that.

Speaker 3: 26:14

So where does that $200 million go? $200 million, I mean, I'm sorry, $200 million. Where does that $200 million go? $200 million, I'm sorry, $200 million, where does that $200 million?

Speaker 2: 26:21

go. Well, it goes into the big black hole of the US Treasury. But a lot of it. Well, first of all, we are sharing agreements with Switzerland. They kept half of it, so the $100 million came here and law enforcement shared a great part of it. I think I gave $13 million to the Boca Raton Police Department and they built a huge center. They put radios. The Monroe County Sheriff's Department put radios in all their cars with the money. So it was a boon to local law enforcement. It really helped them. It was a boon to local law enforcement. It really helped them. Some of the agencies that helped us with the case. It really helped them build up their law enforcement resources to tackle these problems that we had in South Florida.

Speaker 3: 27:09

So were you able to kind of Can I come on? Yeah, absolutely.

Speaker 1: 27:12

Yeah, the acid for-.

Speaker 2: 27:14

By the way. By the way, before you get in there, none of it went to me, and that's my biggest chagrin.

Speaker 3: 27:23

But were you at least able to kind of like you know kind of influence where it went?

Speaker 2: 27:29

Yeah, oh yeah, no I, the US Attorney's Office is a big part of allocations to law enforcement. Go ahead, toby.

Speaker 1: 27:36

OK, we had. You know, the asset forfeiture units started to form at Treasury, like Paul said, in the marshals in 1986, 87, with that law developed forfeiture units that strictly worked on getting these seizures from Switzerland. In the book we talk about the Paul Hindling case, which was an old DEA case which was adopted by Monroe County Sheriff and Customs and it ended up with about $100 million in Naila, jersey, and all over the place in Switzerland and the going rate Paul's correct is half. So the money that went to the sheriff's office in Keys. They ended up getting a brand new, updated police station and marathon equipment and stuff like that. It was like afeited to them.

Speaker 3: 28:46

So anyway, I didn't mean to cut you off, no worries.

Speaker 1: 28:47

No worries.

Speaker 2: 28:48

That's funny, Joe, because the Paul Hindelang case was an offshoot of the Nassar case. I know that. So because of the Nassar case, we found the Paul Hindelang money. Paul Hindelang was famous because well, a little bit famous because he invested in cell phones in California and phone booths in California when it was something, and so he took his drug money. He was a marijuana trafficker for Julio Nassar David's organization and he would bring in barges of marijuana into South Florida, into Louisiana, and so because of the Nassar case, we were able toed his money and invested it in this cell phone and phone booth business in California and quadrupled his money. And because he used drug money to infiltrate that, that was all seized. And we found that because of Julio Nasrud David and so I'm not even talking about that money that case produced all that.

Speaker 2: 30:05

Another fun fact of that case Paul Hindelang was the business partner of a guy who was running for governor of California. Governor of California I'm blanking on his name right now, but because of this case and because of the fact that they linked the business partner to Hindelang, he lost the race for governor and Arnold Schwarzenegger was elected instead of him. And so when news of this came up so when news of this came up, it sabotaged his campaign and Arnold Schwarzenegger was the beneficiary of that. But that's the Paul Henderland case, linked directly to the Julio Nasser case, and all that money was shared at the same time. I think it was ultimately $240 million total.

Speaker 3: 31:01

So just those two cases like half a billion.

Speaker 2: 31:06

Yep Quarter of a billion.

Speaker 3: 31:08

Well, 200 plus 240, right.

Speaker 2: 31:13

It was really about $240 million total.

Speaker 3: 31:15

Yeah, yeah, oh, gotcha, gotcha, gotcha.

Speaker 2: 31:18

Wow, today's standards, that would gotcha, gotcha, wow.

Speaker 1: 31:19

So yeah, yeah, today's standards that would probably be over a billion dollars Easy.

Speaker 2: 31:25

But yeah, that's, and then we got some more money. I mean, you know, the beauty of these cases is you grab one case, you follow it and it bleeds into another case, and if you're savvy enough you can just work these cases forever, um, forever, and so, anyway, that was. Every case was interesting. Every case was like that. You know, prosecuting lawyers was was fascinating as well. I mean every, as Toby can tell you, every case in and of itself is fascinating.

Speaker 3: 32:00

Wild times. So did you find the other money when you were guessing for the original one? Was it that same Swiss bank account?

Speaker 2: 32:10

You mean the Hindulang money?

Speaker 2: 32:11

Yeah yeah, happened in reality was when we, when we found the um, when we found the nasher money, the magistrate was working the case the swiss magistrate and they were prosecutor magistrates, so they were both prosecutor and judge. It was fabulous. And uh, so he he said you know, the evidence you sent me also leads to other accounts over here, and that's how we got into that. I assigned one of my prosecutors that worked for me, rich Byrne, to the case. I said go for it. He went for it and it was just fascinating, fascinating.

Speaker 1: 32:55

Yeah, and it developed. It was. You know, I talked about the politics internal with customs and we sent a bunch of people over to the LA, jersey and when I met with Rich Byrne he came in and he said we can't get any action from customs. And I was kind of a guy who went against the grain with headquarters occasionally and I said, rich, we got a detail, we're going to taff it for three months over there and that, and I said, as a matter of fact, I got money for you guys to go. You go black too, who's deceased but was a great prosecutor and, uh, paid for the whole trips to get it.

Speaker 1: 33:44

Now it sounds like this was not a vacation. This was the aisle of and I went over myself. I kind of had interesting. I went there and the next day I was detailed to 9-11. I did my business there and next thing I know I'm in New York City, so that's the kind of run and gun that we did with customs. But so they went over there and we had it. You know, I was talking to people at headquarters and they're like, how much do you need? And I said, oh, maybe $200,000. And they're like looking at me with two heads, because it was going to be asset forfeiture money in the pool up there to fund the trips for the US attorneys and the agents to do this. And then I said, kind of it's $250,000 and $100 million. Okay, all right, 250 000 and 100 million dollars. Okay, all right, you think you can staff it. And uh, and they did, you know so very cool.

Speaker 3: 34:48

So what? Where'd you go after miami?

Speaker 2: 34:52

uh well, I, I, um, I went from the drug unit in miami to the economic crime unit in Miami and I started doing health care fraud prosecutions. As you probably know, miami was the ground zero for health care fraud and, quite frankly, the truth of the matter is is that in the mid-90s, particularly 97, when extradition became permissible again in Columbia where we could extradite cartel leaders, the cartels literally stopped doing business in Miami and moved their business almost entirely and in South Florida and moved their business entirely to Mexico. It was just the cost of doing business in South Florida became to be too much because agents like Toby and other agents did such a terrific job in our office, did a really terrific job in driving up the cost of doing business for these guys, and so they literally in the mid-90s they moved all operations through Mexico and mostly through, you know, the southwestern states, you know California and New Mexico and all that. So drug trafficking as an opportunity to prosecute really went way down in South Florida literally. And so the next big thing was a lot of the drug traffickers moved into the healthcare fraud business because it's a lot easier and safer and you can involve your whole family and the checks come from the United States government. So it's a much safer and better business.

Speaker 2: 36:44

So I started doing. They put me in charge of the economic crime unit in Miami. We had one. I'm just giving you sort of how I transitioned out of drugs to the economic crime unit and into DC, transitioned out of drugs to the Economic Crime Unit and into DC. So I ran a section, the Economic Crime Section in Miami. It was 20 attorneys.

Speaker 2: 37:11

I interviewed all the agencies as to what the issues were in South Florida then in 1997. Almost invariably, everyone said healthcare fraud. Invariably, everyone said health care fraud. And so I came back and we had one and one half prosecutors assigned to health care fraud in South Florida, which was absolutely fucking ridiculous. So I told 10 of the prosecutors in the unit you are now health care fraud prosecutors. None of them wanted to be. I didn't give a shit. Half of them left the unit, which is fine by me.

Speaker 2: 37:43

I replaced them with new people that were healthcare fraud prosecutors and we started to tackle healthcare fraud in a very significant way in South Florida like it had never been addressed before. I mean, we're talking billions and billions and billions of dollars being stolen from our public FISC on a monthly basis, and so I ended up building what's called the Healthcare Fraud Investigatory Center in Miami, which was a it was actually Miramar which was a place where the FBI, hhs, oig agents in the US Attorney's Office could go and both store evidence and investigate prosecuted cases. Huge, huge success. We ended up understanding the data because, remember, in healthcare, medicare is a government agency and they house all the data. So we could look at the data and see the trends and see where the fraud was moving to and what type of fraud was going on, just by looking at the data. So we got the agencies to all share data and we began targeting significant organizations before they stole all the money, because most of the time in Medicare it's pay and chase. The CMS will pay the fraudsters and then we have to chase the money Once the fraudsters get it. It's very difficult. So our desire was to grab the money.

Speaker 2: 39:10

First case we prosecuted in South Florida. We saved the government. The government was spending a billion dollars a year just in South Florida on infusion therapy. After we used this data to prosecute all irrelevant individuals, billings went from a billion dollars a year to $30,000 a year because it was all fraudulent. So it was very effective. I did that for five years, got a call from Washington. They were prosecuting Enron. Actually at the time they were prosecuting Arthur Anderson. They wanted to build up the fraud section in the Department of Justice to be sort of a fighting machine. They asked me to come up there and participate in teaching prosecutors how to fight white-collar crime efficiently and effectively. I went there in 2002 during the Enron scandal, ended up being the acting US attorney over Enron during the Skilling and Lay trial. Then I prosecuted white-collar cases 2002 to uh 2011 when I left the department of justice I'm just curious real quick, like what's a typical um health care fraud scheme well, there's no such thing as a typical healthcare fraud.

Speaker 3: 40:34

Well, I'm saying like maybe what's, what's, what was like the easiest, like lowest hanging fruit, like the easiest to like lowest hanging fruit, like the easiest to identify, maybe most common.

Speaker 2: 40:41

So what we would do? There are all kinds the ones that started in Miami, the ones that were sort of the thing that everybody did in Miami was DME fraud. So it's durable medical equipment, right. So durable medical equipment, right. So durable medical equipment is equipment like a wheelchair, an arm brace, anything that's a piece of medical equipment, and they would have shops set up all an electric wheelchair for $7,000. And the typical fraud is you collect Medicare patients and for some reason Florida has a bunch of old people that are willing to sell their Medicare number, and you recruit patients and you sell them devices that they never get and you never give it to them but you pretend you do, and so there's no actual transaction happening. And then, so that's sort of how typically it started.

Speaker 2: 41:46

The first case I prosecuted, when we opened up the Healthcare Fraud Investigatory Center. They had what was called an inhalation machine scam where, as you know, older people with COPD have to breathe through a machine and the drugs are administered through the breathing machine and this is all. It wasn't until 1996 that Medicare paid for drugs. That's part D. But before that, if the drug was administered through a piece of durable medical equipment, then they would pay for it, and only then. So the scam at the time was because the scam already was oxygen. Right, I'm pretending you need oxygen, so I'm going to sell you monthly oxygen, and of course you don't need it and you're not receiving it. It's all bullshit. So you're billing for that. Well, now you got copd and you need um. You need to get some sort of drug in your system, like you know those little spray things, atomizers. Oh, now you need that delivered at night through a piece of machinery.

Speaker 2: 43:05

So we took down 50 people who were three pharmacies who were whipping up these drugs in their back rooms which, by the way, the drugs are produced by medical companies. You don't need to whip them up in your back room, but they were quote mixing them like alchemists in their room, like pharmacies used to operate with a mortar and pestle. Anyway, it was because people didn't need them, so they were just manufacturing garbage. They were delivering some of the shit, they weren't delivering others and they were billing as if it was real stuff and it was literally hundreds of millions of dollars. So that was the forced organization.

Speaker 2: 43:45

I took out three pharmacies, a whole bunch of clinics and a whole bunch of patients, and so we took those out, there was, I think, 42 people were in our first indictment, so that's it. But that's also the case where I learned about the data, because when I said to them so, they were billing for this drug called acetylcysteine. And I'm like what the fuck is acetylcysteine? And they said, well, that's a drug that's used to dislodge thick mucal plugs in cystic fibrosis patients, and 90% of those drugs are being billed in Miami and we have less than 7% of the cystic fibrosis patients. So it has to be a scam. I'm like why aren't we doing this all the fucking time, using the data to figure out where the frauds are?

Speaker 3: 44:41

It's a legit paper trail.

Speaker 2: 44:44

Yeah and so, and then we used the data to go after infusion therapy, which I told you was an AIDS therapy that wasn't used, but they were billing a billion dollars a year. And then when I went to DC, I said let's do this all across the country. So we started establishing healthcare fraud, strike forces in certain areas where high profile fraud, using data to target the fraud, and literally in our first year of putting strike forces in, where we taught them how to do this and, by the way, fucking US Attorney's Office weren't prosecuting any of this shit, right, people were stealing tens of billions forever and most of them didn't want us there because we were proven they weren't doing anything. But now we have strike forces in 13 cities around the country and they routinely save taxpayers over $100 billion a year, and most of these districts didn't want us fucking there. We had to force our way in there. So it's a wonderful thing and the data tells a story.

Speaker 2: 45:52

And then what we did when we went into DC is we started using that data to focus on other types of white collar crime, particularly crimes that happen in the banks. In other words, banks are selling certain stocks whatever they're selling and we use data to track, sort of to the CFTC where the trading was fraudulent. And so we use the same model that proved efficient to go after trading the traders at certain banks and financial institutions. And so it's a model that if the government had a half a brain, they would continue and to use throughout the world to throughout the country, world, to, uh, throughout the country, to to tackle um elite white collar front crime I mean like are all one shit are all these type of things like uh, prosecuted?

Speaker 3: 46:50

similarly, it seems like you have to be an expert in every single type of thing like how, how was it on the job training, or were you just intellectually? Curious enough to know about everything Like how the hell.

Speaker 2: 47:05

It's all opportunistic right and it's all organic right. So for all frauds are same it's lying, cheating and deceiting. You just have to prove they're lying, cheating and deceiting, right. So one of the things about our model that we did is you didn't need to have a witness, you didn't have to cooperate, didn't need a snitch. I could prove from the data that you didn't have that shit to sell and all the money ended up in your pocket. And so we convicted a number of people early on without a frickin witness who said this guy's involved in the scam, because we could put all the money in their pocket from the scam, which we could prove with a scam. So, um, you know, almost always you want someone who's going to flip and say this is a crime. But on many occasions we would prosecute without a cooperating witness who said that guy's the bad guy because we would prove it was a complete scam and all the money ended up in Mr Big's pockets. So fuck him, convict him. And invariably the jury would.

Speaker 2: 48:21

How to harness the data? And we had this wonderful lady named Peggy, who was a former nurse who taught all of America now how to look at the data, how to analyze it, how to focus upon it and how to use the data to track where the crimes are happening. And that was novel, but I did it because I had someone like Peggy to help me do it, and I had, you know, the FBI gave me money, health and human services gave me money, and you know, it's just being in the right place at the right time too. A lot of it is, um, but also being a little bit inventive and and understanding how crime works and how criminals work what was like the most rewarding going after those lawyers or going after the banks, or going after healthcare fraud.

Speaker 2: 49:04

It's all. To me, what's rewarding is the impact you can make. Right, when I take out an entire organization, not when I say me it was. I had a team, right, I had agents, I had fellow prosecutors. I don't mean me. When we are able to take out an entire organization, a drug trafficking organization, put them out of fucking business, that's rewarding. Right, and seize all their money, that's rewarding. When we can go after healthcare fraud organizations and fucking disembowel them and save taxpayers billions of dollars, billions of dollars.

Speaker 2: 49:47

And not because Washington DC tells us how to do it, because we tell them how to do it right, we're on the ground. We're telling them this is fucking how you do it. I mean, the FBI came to me in Washington DC and said Miami's not working anymore. Can you strike force Miami and go back there? I said no, but one of the things we can do is use that as ground zero to put strike forces around the country. And I got my people in Washington DC to support me. So it's a lot of people supporting.

Speaker 2: 50:19

I hired my health care fraud deputy from Miami C to support me, so it's a lot of people supporting. I hired my health care fraud deputy from Miami, I hired him into Washington. So, and all at every turn, people are saying yes in the government, empowering me to do it. That's very important, and so that's satisfying. And then when you save taxpayers a billion dollars, that's satisfying because that money goes back to the elderly for healthcare services, right.

Speaker 2: 50:42

And then, finally, when we moved on from that and went to Wall Street to put, you know, the CEO of two CEOs of insurance companies, major AIG Insurance companies, major AIG general reinsurance, to put them in jail, to put CFOs in jail because they're ripping off investors, that's rewarding, right. So there's all kinds of rewards all around. And it wasn't until the leadership in DOJ wouldn't let me do that anymore that it became very unrewarded. So for 25 years it was the most, every day was the most rewarding day of my life, right. And then you have the Eric Holder, lanny Brewer group where we have this, the largest economic fraud in the history of America, and they allow us to prosecute zero people. That's when it became very unrewarded.

Speaker 3: 51:49

So was that a turning point in your career.

Speaker 2: 51:52

Yeah, I quit.

Speaker 3: 51:58

That's quite a turning point. So what did you do after that?

Speaker 2: 52:02

I ran for congress and lost um, and then I I worked for a law firm and now I have my own firm, which is equal, which is also rewarding I'd love to ask about your fbi agent career.

Speaker 3: 52:18

Uh Me Myself and the Ruin.

Speaker 2: 52:24

One of my favorite movies ever.

Speaker 1: 52:29

All I can tell you is that I came out of left field.

Speaker 2: 52:33

I was FBI agent number four and the director gave me the nickname Scribbles because he said I wasn't taking notes. I was actually scribbling and it looked ridiculous on the movie screen, so my name he called me.

Speaker 3: 52:54

Scribbles. I mean, I think I could talk to you, paul, until you know, the Red Sox win their next World Series.

Speaker 1: 53:03

Oh, they lost, they lost. They went a long time without the 1918 to 2004.

Speaker 3: 53:09

I'm just saying that's how many questions. I could probably come up with, but I'll have mercy on you this time, since you already agreed to be a repeat guest at some point in the the future

Speaker 1: 53:20

so we got to leave some meat on the bone, toby.

Speaker 1: 53:23

Yeah, I'm here yeah, I can see that and I also see the red socks, so I'm not gonna argue with that. Uh, we're pretty much on the same team. Thank you, paul, for coming in and and like I said, we're going to need we got such a spectrum of people on this. It's unbelievable. I can't even tell you, we just started filming the last two days and you know it's great to end today's with you because it's all going to fit in and you know, maybe some of the individuals you'll recognize that are on there, but I don't know. That's what's going to be a surprise to me too.

Speaker 2: 54:08

But I think, if you know, I think what you guys are doing is great and I think that ultimately there's a whole. You know we're talking about just completely the law enforcement side here, but there's also a human side to all of what we do and what we did. And I think you know we didn't really explore that tonight, but I'm happy to explore that as well.

Speaker 2: 54:28

And, uh, you know some of the rewarding stuff. You know, not as rewarding, but some of the rewarding stuff is you. You know some of the people who I convicted and sent to jail for 30, 40, 50 years one of them was 50 years would literally send me Christmas cards every year and, and you, you get a chance to change people's lives to an individual level. It's not always that way. I mean, some people are hardened criminals, but you know I'm very proud of one guy that I got 50 years. He ended up helping on a lot of very significant cases. I helped him get a sentence reduced to 30 years and he's a productive member of society now. And he was a really bad guy a really really bad guy.

Speaker 1: 55:22

But you know he kept in contact with me and you know I don't hold grudges and you know I just do my job, and so there's a human side to all of this Absolutely, and then we're gonna have some of those people on and you know your experience with that, with the rule 35s that he explained, explained and that came into effect, really, really can give people an opportunity. Clemency, you know, pardons and all that come into play and you know, you know it's if they, if they prove themselves in society or in prison, they deserve a second chance. Thank you for coming on tonight. Let's see. Yeah, it's almost my bedtime.

Speaker 2: 56:10

Much later than you promised.

Speaker 1: 56:14

I know, I know Tobacco road, that's the key. So, we'll settle that up.

Speaker 3: 56:22

Thank you, paul. Thank you so much, paul, looking forward to the next one. All right, see you bye thanks.