June 11, 2024 • 56 mins
What if a single courtroom strategy could turn the tide in the war against drug trafficking? In this riveting episode, we sit down with Paul Pelletier, an esteemed attorney who transformed the legal landscape of Miami in the 1980s. From his early days juggling college and police work to becoming a pivotal federal prosecutor, Paul's story is a testament to innovation in law enforcement. Discover how his groundbreaking use of jeopardy assessments and Nebia hearings played crucial roles in dismantling drug cartels, shifting the power dynamic significantly in favor of law enforcement.
Paul recounts the intricate operations and international collaborations that led to the takedown of the Alex DeCubis Organization, offering a gripping inside look at one of the most significant drug trafficking busts of the era. Using advanced technology and relentless pursuit, law enforcement officials managed to indict 200 individuals, seizing vast amounts of assets and reshaping their financial capabilities. Paul's detailed narrative of the legal maneuvers and international diplomacy required to capture high-profile criminals like Alex DeCubis gives listeners an unprecedented view into the complexity of these operations.
Finally, we explore the transformative impact of asset forfeiture and data-driven approaches in combating white-collar crime, particularly healthcare fraud. Paul's work not only secured billions for taxpayers but also showcased the power of innovative data use in law enforcement. Listen as Paul shares valuable lessons from his illustrious career, including the human side of justice and the importance of relentless pursuit in public service. This episode offers a profound understanding of the legal battles that shaped Miami's fight against crime and corruption, providing inspiration for current and future generations in law enforcement.
Produced by: Citrustream, LLC
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Okay, we're doing Justice, then Justice.
Now we're doing the podcast nowwith Paul Pelletier.
Paul is an attorney for manyyears.
I've known him since the 1990s,further explained with Evelyn
(00:22):
Bazone-Papa and CarlosRomero-Payes, and that he is
very relaxed tonight and weshare a lot in common.
There are a few discrepanciesthat we have, but we're Boston
sports fans and we're here totalk about his career and cases
(00:43):
that he had that were veryunique to Miami and also when he
went up to Washingtonprosecuting people there and
served at the Department ofJustice for many years, and now
he's in private practice and I'mglad and I'll use the word
loosely honored to have him onthe show because this is
(01:07):
something we want to do and hislegal expertise is A+++ with
that.
So I'll let Paul explain.
Jeff will probably ask thelayman questions.
So, anyway, good evening.
Speaker 2 (01:27):
Good evening, Toby.
Speaker 3 (01:27):
Thank you for having me on Good evening, jeff.
So, paul, I know we we we hadlike an hour long interview, you
know, like six months ago, butthis, I think, is going to air
before that.
So maybe if you could catch allof these viewers up on just
where you're from, how you knowwhere you're from and what got
you to the start of your career.
Speaker 2 (01:49):
Sure.
Well, first of all, I'm fromMassachusetts.
Like Toby, I grew up in a smalltown in Massachusetts in the
60s and I, like Toby, was adelinquent as well, I'm sure.
And when I graduated from,while I was going to college, I
(02:11):
ended up joining the DightonPolice Force, which was my
hometown.
I was a cop for a bit on theDighton Police Force while I was
going to college and I was notthe favorite to be hired of most
of the police officers becausemost of them had chased me
during my formative yearsgrowing up.
(02:32):
Anyway, it was a veryinteresting experience and it
helped me through both collegeand then I went to law school.
I was a bartender and waiterthrough law school, really
wanted to do public service, usemy law degree to do public
service and hopefully as aprosecutor.
I was fortunate enough to havedone well in law school.
(02:55):
I got two judicial clerkships atrial clerkship and a appellate
clerkship at the ColoradoSupreme Court.
Absolutely loved all of it.
I wanted to be a prosecutor.
I wanted to be a federalprosecutor and, like most of the
federal agents and prosecutorsyou'll talk to, I wanted to make
(03:16):
a difference.
I wanted to make the biggestdifference I could through
public service and I wasfortunate enough to get a job in
the tax division of theDepartment of Justice.
I got rejected my first twoapplications to them.
While I was doing my clerkshipsI sent a letter telling them
they were making a big mistakeby not hiring me and I got an
(03:39):
interview finally and I gothired in the tax.
It was a wonderful, wonderfuljob by virtue of being in the
tax division.
It was before money launderingwas a crime.
So before money and, believe itor not, there was a time before
money laundering was a crimeand that was any time before
1986.
(04:00):
So I started in the taxdivision in 1984 and because
drug trafficking was a hugeproblem in Miami and in southern
Florida, I got sent down therefrom the tax division and one of
the ways we would seize moneyback then, without any really
adequate money laundering orasset forfeiture laws when we
(04:23):
found money on drug traffickerswe would assess their tax
liability right there, rightthat day, and we would collect
half of it as penalties andtaxes and we would take it away
from them and they were entitledto a trial before a judge
within 48 hours of that.
So it was fast and furious.
(04:44):
We would take money from drugtraffickers and we would assess
their liability immediately.
We called them jeopardyassessments and we would take
their money and they would get ahearing in 48 hours.
Most people didn't want to havea hearing because they didn't
want to actually testify abouthow they got the money, but many
(05:07):
times we took the money thatwas earmarked for attorneys and
the attorneys would fight for it, and so I went up.
I started my career in theDepartment of Justice, fighting
attorneys in South Florida whowere taking money from drug
traffickers and, for the mostpart, winning all of them.
(05:27):
One of the attorneys I went upagainst was a guy by the name of
Mel Kessler, who went by thename Dirty.
Mel Kessler, because he was adirty lawyer, was ultimately
convicted, but he was one of thefirst people I went up against
because I seized money in anenvelope that had his name on it
.
So that's how I got my teethinto South Florida.
(05:47):
I loved the judges down there.
I loved the action down there.
It was just.
It was an absolute crazy, crazy,crazy time.
It was probably completeanarchy and it was in 1986, it
was settled down a little bitbecause the money laundering
laws came into effect, thesentencing guidelines came into
effect, the sentencingguidelines came into effect, the
minimum mandatory laws cameinto effect all at the same time
(06:10):
.
The Rule 35 came into effect,where only the government can
move to reduce sentences, whichgave prosecutors incredible
power to reward people whocooperated up the chain, which
was essential to taking outentire drug trafficking
organizations.
And it was just a fantastictime to be in Miami.
(06:31):
So what I decided to do isleave the tax division and join
the US Attorney's Office ofMiami in 1988, late, late, late
1988.
That's how I ended up in Miami.
Speaker 3 (06:43):
So, like, if you're a defense attorney and you're
fighting for drug money, isthere, is there any stigma
attached to that?
Or like, do you kind of get putin a group In?
Speaker 2 (06:52):
1984, 85 and 86, there was zero stigma attached
to that Every.
It wasn't even illegal tolaunder money back then, so
people were proud to do it, asToby can attest.
There was so much moneysloshing around from defendants
(07:13):
to attorneys.
It was crazy and one of thethings I did once I got safely
ensconced in Miami, as I made itmy mission to prosecute defense
attorneys who are launderingmoney, and that's because it was
a crime number one.
Number two I perceived it to bepart of the problem down there.
(07:33):
And number three I recognizethat if you prosecuted one
criminal defense attorney, itwould reverberate around the
country and so it would have atremendous impact both on what
we did as prosecutors and on thebusiness of drug trafficking.
So I sort of made it aspecialty of prosecuting
(07:55):
criminal defense attorneys andencouraging my fellow
prosecutors to do the same.
I wasn't invited to a lot ofdefense attorney parties back
then.
No, I wasn't invited to anydinners.
I was probably one of the mosthated prosecutors in Miami by
the defense bar, but it was aunique opportunity to make a
(08:15):
difference by actually showingno fear and going after criminal
defense attorneys.
Speaker 1 (08:20):
Let me ask a quick question, because this is
something historical.
I don't know and if you couldexplain it, paul, when did the
Nebia hearings come into effectfor counsel, as far as clients
paying and whether or not themoney was tainted?
Speaker 2 (08:38):
All right.
So a Nebia hearing for thosewho don't know, it is a hearing
named after a person named Nebiaand that came in the after
money laundering became a crime,in 86, to the best of my
knowledge, I didn't become acriminal prosecutor until 87, 88
, actually so.
But a Nebbia hearing is whereif a person wants to post money
(09:00):
for a bond, then they have toprove that the money they're
posting for a bond came from alegitimate source, and that was
a Nebbia Herring.
We used to have plenty of those.
And, quite frankly, anotherthing that came into effect in
1986, I told you that the entiredynamic changed in 1986.
(09:24):
Up until 1986, the criminals andthe drug traffickers were in
charge.
They were absolutely in chargeof South Florida.
In 1986, because of the moneylaundering laws, because of the
sentencing guidelines, becauseof the minimum mandatories,
because of Rule 35, meaning onlyprosecutors could reward
(09:47):
cooperation through a reductionof sentence because before 1986,
defendants could move to reducetheir own sentence.
In 1986, they couldn't anymore.
And finally, what I didn'tmention before, the Bail Reform
Act came into effect in 1986,where if you were charged with a
drug trafficking crime thatwarranted a sentence of 10 or
(10:09):
more years, you were presumed tobe a danger to the community
and a risk of flight.
Therefore you were detainedpending trial, and being
detained pending trial whichdidn't happen before 1986, very
often was it was a unique way tobaptize drug traffickers
(10:33):
immediately with theconsequences of their behavior
and make them recognize thatthey're going to be sitting in
jail from the day of theirarrest to the day they're
released upon the service oftheir sentence, which typically
in Miami was somewhere between10 and 30 years.
So it gave them an incredibleincentive to cooperate that um
(11:11):
um cooperation with a sentencingreduction, an absolute sea
change in how we dealt withcrimes, criminals and drug
traffickers in south florida.
It allowed us, as both federalagents and prosecutors, to
literally take charge of the ofthe of the drug trafficking
organizations.
Speaker 3 (11:25):
So all this stuff happening in 1986 or around then
, is it everything just kind ofcoincidentally happening at the
same time, or is it a concertedpush 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 towork question.
It was when Congress used towork.
So it was literally people allworking together law enforcement
(11:59):
, congress, sentencingcommission all working together
to see how they could fix aproblem of lawlessness which had
, basically Miami was groundzero.
Everybody knew that problem oflawlessness, which had basically
Miami was ground zero.
Everybody knew that.
And so it was everybody pullingtheir oars together Republicans
, democrats, everybody doingwhat they needed to do to take
control of the situation whichultimately, as Toby can attest,
(12:20):
it was an incredible toolboxthat we were given.
Speaker 3 (12:24):
And when you're going after one of these lawyers, you
know obviously they're probablygoing to fight harder for
themselves than they will forany other client.
Is it like big game hunting foryou?
Is it like a way harder thanjust getting a squirrel off your
fence?
Speaker 2 (12:39):
It's way, it is way, way, way harder.
Why?
Because, number one, lawyersyou know when you, when you
charge drug traffickers, theyknow it's part of the business,
right.
They know that if they getcaught, that's it.
Lawyers don't expect to bedefendants for participating in
(13:02):
their activities of facilitatingdrug traffickers.
So you're literally these arepeople that are the, you know,
the upper echelons of theircommunity.
They are people that you knowgo to sleep at night thinking
that, number one, they're nevergetting caught but that they
haven't done anything wrong forthe most part.
(13:23):
One, they're never gettingcaught but that they haven't
done anything wrong for the mostpart.
Or they conceal what they dowrong from their family members.
And it is some of the mostdifficult street fighting I was
ever engaged in.
It's very difficult.
I would have bar complaintsfiled against me consistently.
Bar complaints are when theyfile complaints seeking to take
(13:44):
away my license for doing whatthey say is illegal things or
unlawful things or improperthings.
So I spent a lot of timefighting bar complaints to keep
my license.
It was a very I'm not going tosay unrewarded, because in the
end it was very rewarding butvery challenging time as a
prosecutor, and and and it wassomething that me and a team of
(14:09):
prosecutors at the US Attorney'sOffice circled our wagons
around and we persistently didit.
I think we convicted about fiveex-AUSAs in our endeavors, but
it was.
It was a movement.
And what kind of punishmentwould these guys get generally?
(14:32):
Oh, they would get substantialpenalties depending on what they
were charged with.
But the money laundering lawstypically were very tough on
people.
They had a maximum sentence of20 years.
So you could sentence people toa long time.
Jerry Remy, one of the lawyersthat I prosecuted and convicted,
he got 17 years.
I mean you could get a lot oftime.
(14:54):
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, butI've gotten everywhere, from two
to 17 years from criminaldefense lawyers who are
convicted.
(15:20):
Wow, so after 1986, did the lotof individual lawyers who hung
out their own shingle?
Former prosecutors, formerpublic defenders, and they would
hang out their own shingle.
That was something unique aboutMiami.
A lot of big cities that you goto, it's law firms that
represent criminal defendants,even in the drug business, but
Miami it was a lot of individualpeople.
(15:42):
So when you said, did thequality of lawyer change?
No, but we did change thedynamic extensively and
demonstrably in a drugtrafficker's ability to pay
lawyers with drug cash.
We changed that dynamicincredibly drug cash.
Speaker 3 (16:08):
We changed that dynamic incredibly.
So maybe, like the super highend ones, wouldn't maybe want to
take the risk or couldn't berewarded, you know.
Speaker 2 (16:12):
Or they would ask the court before they would take
money.
They would ask the court to tosort of bless the legitimacy of
the money, which was a difficultthing to do when you're
representing a drug kingpin or acartel 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 crosspaths?
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 obviouslyknown to drug prosecutors in
Miami.
Miami, we would.
You know, I had a fabulousexperience with both the DEA,
with Customs, with FBI.
(17:12):
Actually they were tremendousin the drug arena.
It was just a unique time inMiami where all resources really
came together and we used tohang.
I don't see it happening today,but we used to drink with uh
with uh agents, we would playsoftball with agents, we would
hang out with agents.
It was, it was a fantasticatmosphere in which everybody
sort of was, um, uniquelypositioned to number one, hang
(17:36):
out but really make a differencein 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 formost of them.
Speaker 3 (17:50):
But what?
What's like?
One that sticks out in yourmind 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 wouldsay is the most unique, I mean,
I would tell people that everyconspiracy in Miami drug
(18:18):
conspiracy involves all the samepeople.
Right, because theseorganizations, these drug
trafficking organizations, wouldshare people all the time.
Right, they had differentleaders, but they would share
people all the time.
And I prosecuted this oneorganization in Miami that was
particularly prolific and wecalled it the Alex DeCubis
(19:04):
Organization, forward-lookinginfrared camera to videotape at
night, off of the Bahamas,offload from a freighter of
about 4,000 kilos, and weactually videotaped the whole
thing from a Coast Guardhelicopter.
That was sort of very quiet.
It was a single, it was one man, it was sort of like these
little airplanes, you see, whichis just one guy in it and
there's a thing.
So it was very quiet, althoughif he got close enough you could
(19:26):
hear it.
But it was the first time weever in South Florida had
videotaped through a flarecamera the offload of a
freighter of cocaine.
And then we watched as we sortof splintered off.
I ended up, along with myfriends, in the attorney's
(19:48):
office in Miami.
We ended up indicting about 200people in this organization,
both importers and exporters.
But we never got our hands onAlex Kubis, who was sort of
running the importation end ofit in Miami.
He was sort of a local hero.
He was a wrestler at PalmettoHigh School and he was featured
(20:11):
in Sports Illustrated and he's aheavyweight wrestler.
And so I had my focus on himfor a while, traced him, tracked
him all around the world,through Brazil into Colombia,
took me 14 years but we got him14 years later.
But in the meantime we ended uparresting a whole slew of other
people.
You know seized the freighter,the Nerma, which is a huge
(20:37):
coastal freighter that wouldactually do freight, but they
would put the cocaine in theholds of the ship to hide it in
the ballast tanks to hide it.
So when Coast Guard would comeon board they would never check
(20:58):
the ballast tanks and it.
So when coast guard would comeon board they would never check
the ballast tanks.
And that's that's where it wasand they had.
They had brought in before thisfive other loads at four
thousand kilos a piece.
It was a pretty majororganization.
It was run out of barranquillaby this uh kingpin of the north
coast cartel by the name ofJulio Nasser David.
(21:20):
So we traced, like everythingelse it's like putting a puzzle
together to look back on sort ofhow the organization ran and
who was involved.
And that's how we sort ofhistorically, went back and
indicted 200 people andconvicted virtually every single
one of them.
Indicted 200 people andconvicted virtually every single
(21:44):
one of them.
But we found out that the NERMAwas purchased for $1.3 million
by 13 $100,000 cashier's checksbought at UBS in Panama.
And this was before they hadarrested.
This was 1987, it was beforethey had arrested Noriega.
So, if you may or may notrecall, once Noriega was a
(22:07):
problem.
All of the financialinstitutions moved out of Panama
for a bit.
But Panama was sort of theWestern financial capital of the
world.
They were the Switzerland ofthe world, they were the
switzerland of of the of thewest, and all the banks moved
out pretty much when they becamea drug trafficking haven under
(22:29):
noriega.
So I subpoenaed, oh I put outextradition warrants, that's
what what it was for JulioNassar David and his wife in
Switzerland, because UBS hadmoved all of his money back to
we presumed back to Switzerlandby the name of Casper Duno, who
(22:57):
was a chauffeur to Julio NasserDavid's wife Shayla, in
Switzerland, and I'll bring allthis story together for a minute
, but just sort of how thingsworked.
So the Swiss magistrate calledme and said you have an arrest
(23:19):
warrant, and, by the way, we'renot supposed to talk to foreign
judges or stuff like that, wehave an Office of International
Affairs that's supposed to go tothem, but I didn't care about
that stuff.
So he called me and said youknow, 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?
I said yeah, and they said well,you know, we've arrested the
(23:51):
chauffeur to his wife here inSwitzerland.
And I said, yes.
I said we believe he has moneyin Switzerland.
I've sent some MLAT requestsover there.
Mlat is a mutual legalassistance treaty request.
And so he said well, you knowyou don't have the name of the
right account on the MLATrequest.
And I said well, I'm notsurprised there, I don't know
(24:12):
what the name of the account is.
He said, well, you have tofigure that out.
So we fooled around, fooledaround, and I had no idea what
the name of the account was.
I guessed and he would tell me.
You know, swiss bank secrecy isa very important thing over
(24:37):
there.
They don't do anything.
So he said well, I won't seizethe accounts now, because in
order to forfeit any money hehad over there, we had to have a
live defendant in court toforfeit the money in Switzerland
(24:58):
and I had no life to defend it.
I hadn't even indicted his wifeyet.
So I said give me time tocharge his wife and of course
I'm not supposed to have any ofthese conversations with him.
Give me a time to indict hiswife.
And I said but will she be freeto spend it while this process
takes place?
He goes, yeah, of course.
(25:19):
I said well, jesus, I don't wanther spending the money.
He said look, don't worry, it'sgoing to be hard for her to
spend all the money in there.
And I said how much money isthere?
He said I can't tell you.
So anyway, I put together acase against her, which was
fairly difficult, and soultimately we indicted her.
(25:40):
He arrested her and I said isthe money secure?
He said yes.
I said tell me how much shespent.
He goes 7 million.
I go oh, my God, you're kiddingme.
He goes, don't worry about it.
He says there's 200 millionleft in the account, I said, oh
my God, that's unbelievable.
So we seized the money, broughtit all back to the United
(26:02):
States.
At the time it made theGuinness Book of World Records
as the largest drug cashier ever.
But it's just sort of howthings worked in Miami.
Any case could have turned intothat.
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, $200million, where does that $200
million?
Speaker 2 (26:21):
go.
Well, it goes into the bigblack hole of the US Treasury.
But a lot of it.
Well, first of all, we aresharing agreements with
Switzerland.
They kept half of it, so the$100 million came here and law
enforcement shared a great partof it.
I think I gave $13 million tothe Boca Raton Police Department
(26:45):
and they built a huge center.
They put radios.
The Monroe County Sheriff'sDepartment put radios in all
their cars with the money.
So it was a boon to local lawenforcement.
It really helped them.
It was a boon to local lawenforcement.
It really helped them.
Some of the agencies thathelped us with the case.
It really helped them build uptheir law enforcement resources
(27:06):
to tackle these problems that wehad 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 inthere, 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 lawenforcement.
Go ahead, toby.
Speaker 1 (27:36):
OK, we had.
You know, the asset forfeitureunits started to form at
Treasury, like Paul said, in themarshals in 1986, 87, with that
law developed forfeiture unitsthat strictly worked on getting
these seizures from Switzerland.
In the book we talk about thePaul Hindling case, which was an
(28:01):
old DEA case which was adoptedby Monroe County Sheriff and
Customs and it ended up withabout $100 million in Naila,
jersey, and all over the placein Switzerland and the going
rate Paul's correct is half.
So the money that went to thesheriff's office in Keys.
(28:23):
They ended up getting a brandnew, updated police station and
marathon equipment and stufflike 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 Nassarcase.
I know that.
So because of the Nassar case,we found the Paul Hindelang
money.
Paul Hindelang was famousbecause well, a little bit
famous because he invested incell phones in California and
(29:09):
phone booths in California whenit was something, and so he took
his drug money.
He was a marijuana traffickerfor Julio Nassar David's
organization and he would bringin barges of marijuana into
South Florida, into Louisiana,and so because of the Nassar
(29:36):
case, we were able toed hismoney and invested it in this
cell phone and phone boothbusiness in California and
quadrupled his money.
And because he used drug moneyto infiltrate that, that was all
(29:58):
seized.
And we found that because ofJulio Nasrud David and so I'm
not even talking about thatmoney that case produced all
that.
Another fun fact of that casePaul Hindelang was the business
partner of a guy who was runningfor governor of California.
Governor of California I'mblanking on his name right now,
(30:22):
but because of this case andbecause of the fact that they
linked the business partner toHindelang, he lost the race for
governor and ArnoldSchwarzenegger was elected
instead of him.
And so when news of this cameup so when news of this came up,
it sabotaged his campaign andArnold Schwarzenegger was the
(30:44):
beneficiary of that.
But that's the Paul Henderlandcase, linked directly to the
Julio Nasser case, and all thatmoney was shared at the same
time.
I think it was ultimately $240million 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 billiondollars Easy.
Speaker 2 (31:25):
But yeah, that's, and then we got some more money.
I mean, you know, the beauty ofthese cases is you grab one
case, you follow it and itbleeds into another case, and if
you're savvy enough you canjust work these cases forever,
um, forever, and so, anyway,that was.
(31:47):
Every case was interesting.
Every case was like that.
You know, prosecuting lawyerswas was fascinating as well.
I mean every, as Toby can tellyou, every case in and of itself
is fascinating.
Speaker 3 (32:00):
Wild times.
So did you find the other moneywhen you were guessing for the
original one?
Was it that same Swiss bankaccount?
Speaker 2 (32:10):
You mean the Hindulang money?
Yeah yeah, happened in realitywas when we, when we found the
um, when we found the nashermoney, the magistrate was
working the case the swissmagistrate and they were
prosecutor magistrates, so theywere both prosecutor and judge.
(32:30):
It was fabulous.
And uh, so he he said you know,the evidence you sent me also
leads to other accounts overhere, and that's how we got into
that.
I assigned one of myprosecutors that worked for me,
rich Byrne, to the case.
I said go for it.
He went for it and it was justfascinating, fascinating.
Speaker 1 (32:55):
Yeah, and it developed.
It was.
You know, I talked about thepolitics internal with customs
and we sent a bunch of peopleover to the LA, jersey and when
I met with Rich Byrne he came inand he said we can't get any
action from customs.
And I was kind of a guy whowent against the grain with
(33:18):
headquarters occasionally and Isaid, rich, we got a detail,
we're going to taff it for threemonths over there and that, and
I said, as a matter of fact, Igot money for you guys to go.
You go black too, who'sdeceased but was a great
(33:40):
prosecutor and, uh, paid for thewhole trips to get it.
Now it sounds like this was nota vacation.
This was the aisle of and Iwent over myself.
I kind of had interesting.
I went there and the next day Iwas detailed to 9-11.
I did my business there andnext thing I know I'm in New
(34:00):
York City, so that's the kind ofrun and gun that we did with
customs.
But so they went over there andwe had it.
You know, I was talking topeople at headquarters and
they're like, how much do youneed?
And I said, oh, maybe $200,000.
And they're like looking at mewith two heads, because it was
(34:23):
going to be asset forfeituremoney in the pool up there to
fund the trips for the USattorneys and the agents to do
this.
And then I said, kind of it's$250,000 and $100 million.
Okay, all right, 250 000 and100 million dollars.
Okay, all right, you think youcan staff it.
And uh, and they did, you knowso 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 inMiami and I started doing health
care fraud prosecutions.
As you probably know, miami wasthe ground zero for health care
fraud and, quite frankly, thetruth of the matter is is that
in the mid-90s, particularly 97,when extradition became
(35:17):
permissible again in Columbiawhere we could extradite cartel
leaders, the cartels literallystopped doing business in Miami
and moved their business almostentirely and in South Florida
and moved their businessentirely to Mexico.
It was just the cost of doingbusiness in South Florida became
(35:40):
to be too much because agentslike Toby and other agents did
such a terrific job in ouroffice, did a really terrific
job in driving up the cost ofdoing business for these guys,
and so they literally in themid-90s they moved all
operations through Mexico andmostly through, you know, the
(36:01):
southwestern states, you knowCalifornia and New Mexico and
all that.
So drug trafficking as anopportunity to prosecute really
went way down in South Floridaliterally.
(36:21):
And so the next big thing was alot of the drug traffickers
moved into the healthcare fraudbusiness because it's a lot
easier and safer and you caninvolve your whole family and
the checks come from the UnitedStates government.
So it's a much safer and betterbusiness.
(36:44):
So I started doing.
They put me in charge of theeconomic crime unit in Miami.
We had one.
I'm just giving you sort of howI transitioned out of drugs to
the economic crime unit and intoDC, transitioned out of drugs
to the Economic Crime Unit andinto DC.
(37:05):
So I ran a section, theEconomic Crime Section in Miami.
It was 20 attorneys.
I interviewed all the agenciesas to what the issues were in
South Florida then in 1997.
Almost invariably, everyonesaid healthcare fraud.
Invariably, everyone saidhealth care fraud.
And so I came back and we hadone and one half prosecutors
(37:25):
assigned to health care fraud inSouth Florida, which was
absolutely fucking ridiculous.
So I told 10 of the prosecutorsin 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.
I replaced them with new peoplethat were healthcare fraud
(37:45):
prosecutors and we started totackle healthcare fraud in a
very significant way in SouthFlorida like it had never been
addressed before.
I mean, we're talking billionsand billions and billions of
dollars being stolen from ourpublic FISC on a monthly basis,
and so I ended up buildingwhat's called the Healthcare
(38:08):
Fraud Investigatory Center inMiami, which was a it was
actually Miramar which was aplace where the FBI, hhs, oig
agents in the US Attorney'sOffice could go and both store
evidence and investigateprosecuted cases.
Huge, huge success.
We ended up understanding thedata because, remember, in
(38:31):
healthcare, medicare is agovernment agency and they house
all the data.
So we could look at the dataand see the trends and see where
the fraud was moving to andwhat type of fraud was going on,
just by looking at the data.
So we got the agencies to allshare data and we began
(38:51):
targeting significantorganizations before they stole
all the money, because most ofthe time in Medicare it's pay
and chase.
The CMS will pay the fraudstersand then we have to chase the
money Once the fraudsters get it.
It's very difficult.
So our desire was to grab themoney.
First case we prosecuted inSouth Florida.
(39:13):
We saved the government.
The government was spending abillion dollars a year just in
South Florida on infusiontherapy.
After we used this data toprosecute all irrelevant
individuals, billings went froma billion dollars a year to
$30,000 a year because it wasall fraudulent.
(39:34):
So it was very effective.
I did that for five years, gota call from Washington.
They were prosecuting Enron.
Actually at the time they wereprosecuting Arthur Anderson.
They wanted to build up thefraud section in the Department
of Justice to be sort of afighting machine.
They asked me to come up thereand participate in teaching
(40:01):
prosecutors how to fightwhite-collar crime efficiently
and effectively.
I went there in 2002 during theEnron scandal, ended up being
the acting US attorney overEnron during the Skilling and
Lay trial.
Then I prosecuted white-collarcases 2002 to uh 2011 when I
(40:23):
left the department of justiceI'm just curious real quick,
like what's a typical um healthcare fraud scheme well, there's
no such thing as a typicalhealthcare fraud.
Speaker 3 (40:34):
Well, I'm saying like maybe what's, what's, what was
like the easiest, like lowesthanging 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 onesthat started in Miami, the ones
that were sort of the thing thateverybody did in Miami was DME
fraud.
So it's durable medicalequipment, right.
So durable medical equipment,right.
So durable medical equipment isequipment like a wheelchair, an
(41:06):
arm brace, anything that's apiece of medical equipment, and
they would have shops set up allan electric wheelchair for
$7,000.
And the typical fraud is youcollect Medicare patients and
for some reason Florida has abunch of old people that are
willing to sell their Medicarenumber, and you recruit patients
(41:28):
and you sell them devices thatthey never get and you never
give it to them but you pretendyou do, and so there's no actual
transaction happening.
And then, so that's sort of howtypically it started.
The first case I prosecuted,when we opened up the Healthcare
(41:50):
Fraud Investigatory Center.
They had what was called aninhalation machine scam where,
as you know, older people withCOPD have to breathe through a
machine and the drugs areadministered through the
(42:10):
breathing machine and this isall.
It wasn't until 1996 thatMedicare paid for drugs.
That's part D.
But before that, if the drugwas administered through a piece
of durable medical equipment,then they would pay for it, and
(42:31):
only then.
So the scam at the time wasbecause the scam already was
oxygen.
Right, I'm pretending you needoxygen, so I'm going to sell you
monthly oxygen, and of courseyou 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 youneed um.
(42:52):
You need to get some sort ofdrug in your system, like you
know those little spray things,atomizers.
Oh, now you need that deliveredat night through a piece of
machinery.
So we took down 50 people whowere three pharmacies who were
whipping up these drugs in theirback rooms which, by the way,
(43:17):
the drugs are produced bymedical companies.
You don't need to whip them upin your back room, but they were
quote mixing them likealchemists in their room, like
pharmacies used to operate witha mortar and pestle.
Anyway, it was because peopledidn't need them, so they were
just manufacturing garbage.
They were delivering some ofthe shit, they weren't
(43:38):
delivering others and they werebilling as if it was real stuff
and it was literally hundreds ofmillions of dollars.
So that was the forcedorganization.
I took out three pharmacies, awhole bunch of clinics and a
whole bunch of patients, and sowe took those out, there was, I
think, 42 people were in ourfirst indictment, so that's it.
(43:58):
But that's also the case whereI 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 isacetylcysteine?
And they said, well, that's adrug that's used to dislodge
(44:19):
thick mucal plugs in cysticfibrosis patients, and 90% of
those drugs are being billed inMiami 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 doingthis all the fucking time, using
the data to figure out wherethe 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 toldyou was an AIDS therapy that
wasn't used, but they werebilling a billion dollars a year
.
And then when I went to DC, Isaid let's do this all across
the country.
So we started establishinghealthcare fraud, strike forces
in certain areas where highprofile fraud, using data to
(45:10):
target the fraud, and literallyin our first year of putting
strike forces in, where wetaught them how to do this and,
by the way, fucking USAttorney's Office weren't
prosecuting any of this shit,right, people were stealing tens
of billions forever and most ofthem didn't want us there
because we were proven theyweren't doing anything.
(45:31):
But now we have strike forcesin 13 cities around the country
and they routinely savetaxpayers over $100 billion a
year, and most of thesedistricts didn't want us fucking
there.
We had to force our way inthere.
So it's a wonderful thing andthe data tells a story.
(45:52):
And then what we did when wewent into DC is we started using
that data to focus on othertypes of white collar crime,
particularly crimes that happenin the banks.
In other words, banks areselling certain stocks whatever
they're selling and we use datato track, sort of to the CFTC
(46:19):
where the trading was fraudulent.
And so we use the same modelthat proved efficient to go
after trading the traders atcertain banks and financial
institutions.
And so it's a model that if thegovernment had a half a brain,
they would continue and to usethroughout the world to
throughout the country, world,to, uh, throughout the country,
(46:41):
to to tackle um elite whitecollar front crime I mean like
are all one shit are all thesetype 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 likehow, how was it on the job
training, or were you justintellectually?
Curious enough to know abouteverything 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'slying, cheating and deceiting.
You just have to prove they'relying, cheating and deceiting,
right.
So one of the things about ourmodel that we did is you didn't
need to have a witness, youdidn't have to cooperate, didn't
need a snitch.
I could prove from the datathat you didn't have that shit
(47:30):
to sell and all the money endedup in your pocket.
And so we convicted a number ofpeople early on without a
frickin witness who said thisguy's involved in the scam,
because we could put all themoney in their pocket from the
scam, which we could prove witha scam.
So, um, you know, almost alwaysyou want someone who's going to
(47:53):
flip and say this is a crime.
But on many occasions we wouldprosecute without a cooperating
witness who said that guy's thebad guy because we would prove
it was a complete scam and allthe money ended up in Mr Big's
pockets.
So fuck him, convict him.
And invariably the jury would.
(48:21):
How to harness the data?
And we had this wonderful ladynamed Peggy, who was a former
nurse who taught all of Americanow how to look at the data, how
to analyze it, how to focusupon it and how to use the data
to track where the crimes arehappening.
And that was novel, but I didit because I had someone like
Peggy to help me do it, and Ihad, you know, the FBI gave me
money, health and human servicesgave me money, and you know,
(48:42):
it's just being in the rightplace at the right time too.
A lot of it is, um, but alsobeing a little bit inventive and
and understanding how crimeworks and how criminals work
what was like the most rewardinggoing after those lawyers or
going after the banks, or goingafter healthcare fraud.
(49:04):
It's all.
To me, what's rewarding is theimpact you can make.
Right, when I take out anentire organization, not when I
say me it was.
I had a team, right, I hadagents, I had fellow prosecutors
.
I don't mean me.
When we are able to take out anentire organization, a drug
(49:24):
trafficking organization, putthem out of fucking business,
that's rewarding.
Right, and seize all theirmoney, that's rewarding.
When we can go after healthcarefraud organizations and fucking
disembowel them and savetaxpayers billions of dollars,
(49:45):
billions of dollars.
And not because Washington DCtells us how to do it, because
we tell them how to do it right,we're on the ground.
We're telling them this isfucking how you do it.
I mean, the FBI came to me inWashington DC and said Miami's
not working anymore.
Can you strike force Miami andgo back there?
(50:05):
I said no, but one of thethings we can do is use that as
ground zero to put strike forcesaround the country.
And I got my people inWashington DC to support me.
So it's a lot of peoplesupporting.
I hired my health care frauddeputy from Miami C to support
me, so it's a lot of peoplesupporting.
I hired my health care frauddeputy from Miami, I hired him
into Washington.
So, and all at every turn,people are saying yes in the
(50:30):
government, empowering me to doit.
That's very important, and sothat's satisfying.
And then when you savetaxpayers a billion dollars,
that's satisfying because thatmoney goes back to the elderly
for healthcare services, right.
And then, finally, when we movedon from that and went to Wall
Street to put, you know, the CEOof two CEOs of insurance
(50:56):
companies, major AIG Insurancecompanies, 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 rewardsall around.
And it wasn't until theleadership in DOJ wouldn't let
(51:22):
me do that anymore that itbecame 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 EricHolder, lanny Brewer group where
we have this, the largesteconomic fraud in the history of
America, and they allow us toprosecute zero people.
(51:43):
That's when it became veryunrewarded.
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 havemy own firm, which is equal,
which is also rewarding I'd loveto 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 Scribblesbecause he said I wasn't taking
notes.
I was actually scribbling andit looked ridiculous on the
movie screen, so my name hecalled me.
Speaker 3 (52:54):
Scribbles.
I mean, I think I could talk toyou, paul, until you know, the
Red Sox win their next WorldSeries.
Speaker 1 (53:03):
Oh, they lost, they lost.
They went a long time withoutthe 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 agreedto 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.
Yeah, I'm here yeah, I can seethat and I also see the red
socks, so I'm not gonna arguewith that.
Uh, we're pretty much on thesame team.
Thank you, paul, for coming inand and like I said, we're going
to need we got such a spectrumof people on this.
(53:42):
It's unbelievable.
I can't even tell you, we juststarted filming the last two
days and you know it's great toend today's with you because
it's all going to fit in and youknow, maybe some of the
individuals you'll recognizethat are on there, but I don't
(54:04):
know.
That's what's going to be asurprise 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 thatultimately there's a whole.
You know we're talking aboutjust completely the law
enforcement side here, butthere's also a human side to all
of what we do and what we did.
And I think you know we didn'treally explore that tonight, but
I'm happy to explore that aswell.
And, uh, you know some of therewarding stuff.
(54:31):
You know, not as rewarding, butsome of the rewarding stuff is
you.
You know some of the people whoI convicted and sent to jail
for 30, 40, 50 years one of themwas 50 years would literally
send me Christmas cards everyyear and, and you, you get a
(54:52):
chance to change people's livesto an individual level.
It's not always that way.
I mean, some people arehardened criminals, but you know
I'm very proud of one guy thatI got 50 years.
He ended up helping on a lot ofvery significant cases.
I helped him get a sentencereduced to 30 years and he's a
(55:15):
productive member of society now.
And he was a really bad guy areally 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 youknow I just do my job, and so
there's a human side to all ofthis Absolutely, and then we're
gonna have some of those peopleon and you know your experience
with that, with the rule 35sthat he explained, explained and
that came into effect, really,really can give people an
(55:45):
opportunity.
Clemency, you know, pardons andall that come into play and you
know, you know it's if they, ifthey prove themselves in
society or in prison, theydeserve a second chance.
Thank you for coming on tonight.
Let's see.
(56:05):
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.
Okay, we're doing Justice, then Justice.
Now we're doing the podcast nowwith Paul Pelletier.
Paul is an attorney for manyyears.
I've known him since the 1990s,further explained with Evelyn
(00:22):
Bazone-Papa and CarlosRomero-Payes, and that he is
very relaxed tonight and weshare a lot in common.
There are a few discrepanciesthat we have, but we're Boston
sports fans and we're here totalk about his career and cases
(00:43):
that he had that were veryunique to Miami and also when he
went up to Washingtonprosecuting people there and
served at the Department ofJustice for many years, and now
he's in private practice and I'mglad and I'll use the word
loosely honored to have him onthe show because this is
(01:07):
something we want to do and hislegal expertise is A+++ with
that.
So I'll let Paul explain.
Jeff will probably ask thelayman questions.
So, anyway, good evening.
Speaker 2 (01:27):
Good evening, Toby.
Speaker 3 (01:27):
Thank you for having me on Good evening, jeff.
So, paul, I know we we we hadlike an hour long interview, you
know, like six months ago, butthis, I think, is going to air
before that.
So maybe if you could catch allof these viewers up on just
where you're from, how you knowwhere you're from and what got
you to the start of your career.
Speaker 2 (01:49):
Sure.
Well, first of all, I'm fromMassachusetts.
Like Toby, I grew up in a smalltown in Massachusetts in the
60s and I, like Toby, was adelinquent as well, I'm sure.
And when I graduated from,while I was going to college, I
(02:11):
ended up joining the DightonPolice Force, which was my
hometown.
I was a cop for a bit on theDighton Police Force while I was
going to college and I was notthe favorite to be hired of most
of the police officers becausemost of them had chased me
during my formative yearsgrowing up.
(02:32):
Anyway, it was a veryinteresting experience and it
helped me through both collegeand then I went to law school.
I was a bartender and waiterthrough law school, really
wanted to do public service, usemy law degree to do public
service and hopefully as aprosecutor.
I was fortunate enough to havedone well in law school.
(02:55):
I got two judicial clerkships atrial clerkship and a appellate
clerkship at the ColoradoSupreme Court.
Absolutely loved all of it.
I wanted to be a prosecutor.
I wanted to be a federalprosecutor and, like most of the
federal agents and prosecutorsyou'll talk to, I wanted to make
(03:16):
a difference.
I wanted to make the biggestdifference I could through
public service and I wasfortunate enough to get a job in
the tax division of theDepartment of Justice.
I got rejected my first twoapplications to them.
While I was doing my clerkshipsI sent a letter telling them
they were making a big mistakeby not hiring me and I got an
(03:39):
interview finally and I gothired in the tax.
It was a wonderful, wonderfuljob by virtue of being in the
tax division.
It was before money launderingwas a crime.
So before money and, believe itor not, there was a time before
money laundering was a crimeand that was any time before
1986.
(04:00):
So I started in the taxdivision in 1984 and because
drug trafficking was a hugeproblem in Miami and in southern
Florida, I got sent down therefrom the tax division and one of
the ways we would seize moneyback then, without any really
adequate money laundering orasset forfeiture laws when we
(04:23):
found money on drug traffickerswe would assess their tax
liability right there, rightthat day, and we would collect
half of it as penalties andtaxes and we would take it away
from them and they were entitledto a trial before a judge
within 48 hours of that.
So it was fast and furious.
(04:44):
We would take money from drugtraffickers and we would assess
their liability immediately.
We called them jeopardyassessments and we would take
their money and they would get ahearing in 48 hours.
Most people didn't want to havea hearing because they didn't
want to actually testify abouthow they got the money, but many
(05:07):
times we took the money thatwas earmarked for attorneys and
the attorneys would fight for it, and so I went up.
I started my career in theDepartment of Justice, fighting
attorneys in South Florida whowere taking money from drug
traffickers and, for the mostpart, winning all of them.
(05:27):
One of the attorneys I went upagainst was a guy by the name of
Mel Kessler, who went by thename Dirty.
Mel Kessler, because he was adirty lawyer, was ultimately
convicted, but he was one of thefirst people I went up against
because I seized money in anenvelope that had his name on it
.
So that's how I got my teethinto South Florida.
(05:47):
I loved the judges down there.
I loved the action down there.
It was just.
It was an absolute crazy, crazy,crazy time.
It was probably completeanarchy and it was in 1986, it
was settled down a little bitbecause the money laundering
laws came into effect, thesentencing guidelines came into
effect, the sentencingguidelines came into effect, the
minimum mandatory laws cameinto effect all at the same time
(06:10):
.
The Rule 35 came into effect,where only the government can
move to reduce sentences, whichgave prosecutors incredible
power to reward people whocooperated up the chain, which
was essential to taking outentire drug trafficking
organizations.
And it was just a fantastictime to be in Miami.
(06:31):
So what I decided to do isleave the tax division and join
the US Attorney's Office ofMiami in 1988, late, late, late
1988.
That's how I ended up in Miami.
Speaker 3 (06:43):
So, like, if you're a defense attorney and you're
fighting for drug money, isthere, is there any stigma
attached to that?
Or like, do you kind of get putin a group In?
Speaker 2 (06:52):
1984, 85 and 86, there was zero stigma attached
to that Every.
It wasn't even illegal tolaunder money back then, so
people were proud to do it, asToby can attest.
There was so much moneysloshing around from defendants
(07:13):
to attorneys.
It was crazy and one of thethings I did once I got safely
ensconced in Miami, as I made itmy mission to prosecute defense
attorneys who are launderingmoney, and that's because it was
a crime number one.
Number two I perceived it to bepart of the problem down there.
(07:33):
And number three I recognizethat if you prosecuted one
criminal defense attorney, itwould reverberate around the
country and so it would have atremendous impact both on what
we did as prosecutors and on thebusiness of drug trafficking.
So I sort of made it aspecialty of prosecuting
(07:55):
criminal defense attorneys andencouraging my fellow
prosecutors to do the same.
I wasn't invited to a lot ofdefense attorney parties back
then.
No, I wasn't invited to anydinners.
I was probably one of the mosthated prosecutors in Miami by
the defense bar, but it was aunique opportunity to make a
(08:15):
difference by actually showingno fear and going after criminal
defense attorneys.
Speaker 1 (08:20):
Let me ask a quick question, because this is
something historical.
I don't know and if you couldexplain it, paul, when did the
Nebia hearings come into effectfor counsel, as far as clients
paying and whether or not themoney was tainted?
Speaker 2 (08:38):
All right.
So a Nebia hearing for thosewho don't know, it is a hearing
named after a person named Nebiaand that came in the after
money laundering became a crime,in 86, to the best of my
knowledge, I didn't become acriminal prosecutor until 87, 88
, actually so.
But a Nebbia hearing is whereif a person wants to post money
(09:00):
for a bond, then they have toprove that the money they're
posting for a bond came from alegitimate source, and that was
a Nebbia Herring.
We used to have plenty of those.
And, quite frankly, anotherthing that came into effect in
1986, I told you that the entiredynamic changed in 1986.
(09:24):
Up until 1986, the criminals andthe drug traffickers were in
charge.
They were absolutely in chargeof South Florida.
In 1986, because of the moneylaundering laws, because of the
sentencing guidelines, becauseof the minimum mandatories,
because of Rule 35, meaning onlyprosecutors could reward
(09:47):
cooperation through a reductionof sentence because before 1986,
defendants could move to reducetheir own sentence.
In 1986, they couldn't anymore.
And finally, what I didn'tmention before, the Bail Reform
Act came into effect in 1986,where if you were charged with a
drug trafficking crime thatwarranted a sentence of 10 or
(10:09):
more years, you were presumed tobe a danger to the community
and a risk of flight.
Therefore you were detainedpending trial, and being
detained pending trial whichdidn't happen before 1986, very
often was it was a unique way tobaptize drug traffickers
(10:33):
immediately with theconsequences of their behavior
and make them recognize thatthey're going to be sitting in
jail from the day of theirarrest to the day they're
released upon the service oftheir sentence, which typically
in Miami was somewhere between10 and 30 years.
So it gave them an incredibleincentive to cooperate that um
(11:11):
um cooperation with a sentencingreduction, an absolute sea
change in how we dealt withcrimes, criminals and drug
traffickers in south florida.
It allowed us, as both federalagents and prosecutors, to
literally take charge of the ofthe of the drug trafficking
organizations.
Speaker 3 (11:25):
So all this stuff happening in 1986 or around then
, is it everything just kind ofcoincidentally happening at the
same time, or is it a concertedpush 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 towork question.
It was when Congress used towork.
So it was literally people allworking together law enforcement
(11:59):
, congress, sentencingcommission all working together
to see how they could fix aproblem of lawlessness which had
, basically Miami was groundzero.
Everybody knew that problem oflawlessness, which had basically
Miami was ground zero.
Everybody knew that.
And so it was everybody pullingtheir oars together Republicans
, democrats, everybody doingwhat they needed to do to take
control of the situation whichultimately, as Toby can attest,
(12:20):
it was an incredible toolboxthat we were given.
Speaker 3 (12:24):
And when you're going after one of these lawyers, you
know obviously they're probablygoing to fight harder for
themselves than they will forany other client.
Is it like big game hunting foryou?
Is it like a way harder thanjust getting a squirrel off your
fence?
Speaker 2 (12:39):
It's way, it is way, way, way harder.
Why?
Because, number one, lawyersyou know when you, when you
charge drug traffickers, theyknow it's part of the business,
right.
They know that if they getcaught, that's it.
Lawyers don't expect to bedefendants for participating in
(13:02):
their activities of facilitatingdrug traffickers.
So you're literally these arepeople that are the, you know,
the upper echelons of theircommunity.
They are people that you knowgo to sleep at night thinking
that, number one, they're nevergetting caught but that they
haven't done anything wrong forthe most part.
(13:23):
One, they're never gettingcaught but that they haven't
done anything wrong for the mostpart.
Or they conceal what they dowrong from their family members.
And it is some of the mostdifficult street fighting I was
ever engaged in.
It's very difficult.
I would have bar complaintsfiled against me consistently.
Bar complaints are when theyfile complaints seeking to take
(13:44):
away my license for doing whatthey say is illegal things or
unlawful things or improperthings.
So I spent a lot of timefighting bar complaints to keep
my license.
It was a very I'm not going tosay unrewarded, because in the
end it was very rewarding butvery challenging time as a
prosecutor, and and and it wassomething that me and a team of
(14:09):
prosecutors at the US Attorney'sOffice circled our wagons
around and we persistently didit.
I think we convicted about fiveex-AUSAs in our endeavors, but
it was.
It was a movement.
And what kind of punishmentwould these guys get generally?
(14:32):
Oh, they would get substantialpenalties depending on what they
were charged with.
But the money laundering lawstypically were very tough on
people.
They had a maximum sentence of20 years.
So you could sentence people toa long time.
Jerry Remy, one of the lawyersthat I prosecuted and convicted,
he got 17 years.
I mean you could get a lot oftime.
(14:54):
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, butI've gotten everywhere, from two
to 17 years from criminaldefense lawyers who are
convicted.
(15:20):
Wow, so after 1986, did the lotof individual lawyers who hung
out their own shingle?
Former prosecutors, formerpublic defenders, and they would
hang out their own shingle.
That was something unique aboutMiami.
A lot of big cities that you goto, it's law firms that
represent criminal defendants,even in the drug business, but
Miami it was a lot of individualpeople.
(15:42):
So when you said, did thequality of lawyer change?
No, but we did change thedynamic extensively and
demonstrably in a drugtrafficker's ability to pay
lawyers with drug cash.
We changed that dynamicincredibly drug cash.
Speaker 3 (16:08):
We changed that dynamic incredibly.
So maybe, like the super highend ones, wouldn't maybe want to
take the risk or couldn't berewarded, you know.
Speaker 2 (16:12):
Or they would ask the court before they would take
money.
They would ask the court to tosort of bless the legitimacy of
the money, which was a difficultthing to do when you're
representing a drug kingpin or acartel 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 crosspaths?
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 obviouslyknown to drug prosecutors in
Miami.
Miami, we would.
You know, I had a fabulousexperience with both the DEA,
with Customs, with FBI.
(17:12):
Actually they were tremendousin the drug arena.
It was just a unique time inMiami where all resources really
came together and we used tohang.
I don't see it happening today,but we used to drink with uh
with uh agents, we would playsoftball with agents, we would
hang out with agents.
It was, it was a fantasticatmosphere in which everybody
sort of was, um, uniquelypositioned to number one, hang
(17:36):
out but really make a differencein 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 formost of them.
Speaker 3 (17:50):
But what?
What's like?
One that sticks out in yourmind 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 wouldsay is the most unique, I mean,
I would tell people that everyconspiracy in Miami drug
(18:18):
conspiracy involves all the samepeople.
Right, because theseorganizations, these drug
trafficking organizations, wouldshare people all the time.
Right, they had differentleaders, but they would share
people all the time.
And I prosecuted this oneorganization in Miami that was
particularly prolific and wecalled it the Alex DeCubis
(19:04):
Organization, forward-lookinginfrared camera to videotape at
night, off of the Bahamas,offload from a freighter of
about 4,000 kilos, and weactually videotaped the whole
thing from a Coast Guardhelicopter.
That was sort of very quiet.
It was a single, it was one man, it was sort of like these
little airplanes, you see, whichis just one guy in it and
there's a thing.
So it was very quiet, althoughif he got close enough you could
(19:26):
hear it.
But it was the first time weever in South Florida had
videotaped through a flarecamera the offload of a
freighter of cocaine.
And then we watched as we sortof splintered off.
I ended up, along with myfriends, in the attorney's
(19:48):
office in Miami.
We ended up indicting about 200people in this organization,
both importers and exporters.
But we never got our hands onAlex Kubis, who was sort of
running the importation end ofit in Miami.
He was sort of a local hero.
He was a wrestler at PalmettoHigh School and he was featured
(20:11):
in Sports Illustrated and he's aheavyweight wrestler.
And so I had my focus on himfor a while, traced him, tracked
him all around the world,through Brazil into Colombia,
took me 14 years but we got him14 years later.
But in the meantime we ended uparresting a whole slew of other
people.
You know seized the freighter,the Nerma, which is a huge
(20:37):
coastal freighter that wouldactually do freight, but they
would put the cocaine in theholds of the ship to hide it in
the ballast tanks to hide it.
So when Coast Guard would comeon board they would never check
(20:58):
the ballast tanks and it.
So when coast guard would comeon board they would never check
the ballast tanks.
And that's that's where it wasand they had.
They had brought in before thisfive other loads at four
thousand kilos a piece.
It was a pretty majororganization.
It was run out of barranquillaby this uh kingpin of the north
coast cartel by the name ofJulio Nasser David.
(21:20):
So we traced, like everythingelse it's like putting a puzzle
together to look back on sort ofhow the organization ran and
who was involved.
And that's how we sort ofhistorically, went back and
indicted 200 people andconvicted virtually every single
one of them.
Indicted 200 people andconvicted virtually every single
(21:44):
one of them.
But we found out that the NERMAwas purchased for $1.3 million
by 13 $100,000 cashier's checksbought at UBS in Panama.
And this was before they hadarrested.
This was 1987, it was beforethey had arrested Noriega.
So, if you may or may notrecall, once Noriega was a
(22:07):
problem.
All of the financialinstitutions moved out of Panama
for a bit.
But Panama was sort of theWestern financial capital of the
world.
They were the Switzerland ofthe world, they were the
switzerland of of the of thewest, and all the banks moved
out pretty much when they becamea drug trafficking haven under
(22:29):
noriega.
So I subpoenaed, oh I put outextradition warrants, that's
what what it was for JulioNassar David and his wife in
Switzerland, because UBS hadmoved all of his money back to
we presumed back to Switzerlandby the name of Casper Duno, who
(22:57):
was a chauffeur to Julio NasserDavid's wife Shayla, in
Switzerland, and I'll bring allthis story together for a minute
, but just sort of how thingsworked.
So the Swiss magistrate calledme and said you have an arrest
(23:19):
warrant, and, by the way, we'renot supposed to talk to foreign
judges or stuff like that, wehave an Office of International
Affairs that's supposed to go tothem, but I didn't care about
that stuff.
So he called me and said youknow, 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?
I said yeah, and they said well,you know, we've arrested the
(23:51):
chauffeur to his wife here inSwitzerland.
And I said, yes.
I said we believe he has moneyin Switzerland.
I've sent some MLAT requestsover there.
Mlat is a mutual legalassistance treaty request.
And so he said well, you knowyou don't have the name of the
right account on the MLATrequest.
And I said well, I'm notsurprised there, I don't know
(24:12):
what the name of the account is.
He said, well, you have tofigure that out.
So we fooled around, fooledaround, and I had no idea what
the name of the account was.
I guessed and he would tell me.
You know, swiss bank secrecy isa very important thing over
(24:37):
there.
They don't do anything.
So he said well, I won't seizethe accounts now, because in
order to forfeit any money hehad over there, we had to have a
live defendant in court toforfeit the money in Switzerland
(24:58):
and I had no life to defend it.
I hadn't even indicted his wifeyet.
So I said give me time tocharge his wife and of course
I'm not supposed to have any ofthese conversations with him.
Give me a time to indict hiswife.
And I said but will she be freeto spend it while this process
takes place?
He goes, yeah, of course.
(25:19):
I said well, jesus, I don't wanther spending the money.
He said look, don't worry, it'sgoing to be hard for her to
spend all the money in there.
And I said how much money isthere?
He said I can't tell you.
So anyway, I put together acase against her, which was
fairly difficult, and soultimately we indicted her.
(25:40):
He arrested her and I said isthe money secure?
He said yes.
I said tell me how much shespent.
He goes 7 million.
I go oh, my God, you're kiddingme.
He goes, don't worry about it.
He says there's 200 millionleft in the account, I said, oh
my God, that's unbelievable.
So we seized the money, broughtit all back to the United
(26:02):
States.
At the time it made theGuinness Book of World Records
as the largest drug cashier ever.
But it's just sort of howthings worked in Miami.
Any case could have turned intothat.
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, $200million, where does that $200
million?
Speaker 2 (26:21):
go.
Well, it goes into the bigblack hole of the US Treasury.
But a lot of it.
Well, first of all, we aresharing agreements with
Switzerland.
They kept half of it, so the$100 million came here and law
enforcement shared a great partof it.
I think I gave $13 million tothe Boca Raton Police Department
(26:45):
and they built a huge center.
They put radios.
The Monroe County Sheriff'sDepartment put radios in all
their cars with the money.
So it was a boon to local lawenforcement.
It really helped them.
It was a boon to local lawenforcement.
It really helped them.
Some of the agencies thathelped us with the case.
It really helped them build uptheir law enforcement resources
(27:06):
to tackle these problems that wehad 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 inthere, 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 lawenforcement.
Go ahead, toby.
Speaker 1 (27:36):
OK, we had.
You know, the asset forfeitureunits started to form at
Treasury, like Paul said, in themarshals in 1986, 87, with that
law developed forfeiture unitsthat strictly worked on getting
these seizures from Switzerland.
In the book we talk about thePaul Hindling case, which was an
(28:01):
old DEA case which was adoptedby Monroe County Sheriff and
Customs and it ended up withabout $100 million in Naila,
jersey, and all over the placein Switzerland and the going
rate Paul's correct is half.
So the money that went to thesheriff's office in Keys.
(28:23):
They ended up getting a brandnew, updated police station and
marathon equipment and stufflike 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 Nassarcase.
I know that.
So because of the Nassar case,we found the Paul Hindelang
money.
Paul Hindelang was famousbecause well, a little bit
famous because he invested incell phones in California and
(29:09):
phone booths in California whenit was something, and so he took
his drug money.
He was a marijuana traffickerfor Julio Nassar David's
organization and he would bringin barges of marijuana into
South Florida, into Louisiana,and so because of the Nassar
(29:36):
case, we were able toed hismoney and invested it in this
cell phone and phone boothbusiness in California and
quadrupled his money.
And because he used drug moneyto infiltrate that, that was all
(29:58):
seized.
And we found that because ofJulio Nasrud David and so I'm
not even talking about thatmoney that case produced all
that.
Another fun fact of that casePaul Hindelang was the business
partner of a guy who was runningfor governor of California.
Governor of California I'mblanking on his name right now,
(30:22):
but because of this case andbecause of the fact that they
linked the business partner toHindelang, he lost the race for
governor and ArnoldSchwarzenegger was elected
instead of him.
And so when news of this cameup so when news of this came up,
it sabotaged his campaign andArnold Schwarzenegger was the
(30:44):
beneficiary of that.
But that's the Paul Henderlandcase, linked directly to the
Julio Nasser case, and all thatmoney was shared at the same
time.
I think it was ultimately $240million 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 billiondollars Easy.
Speaker 2 (31:25):
But yeah, that's, and then we got some more money.
I mean, you know, the beauty ofthese cases is you grab one
case, you follow it and itbleeds into another case, and if
you're savvy enough you canjust work these cases forever,
um, forever, and so, anyway,that was.
(31:47):
Every case was interesting.
Every case was like that.
You know, prosecuting lawyerswas was fascinating as well.
I mean every, as Toby can tellyou, every case in and of itself
is fascinating.
Speaker 3 (32:00):
Wild times.
So did you find the other moneywhen you were guessing for the
original one?
Was it that same Swiss bankaccount?
Speaker 2 (32:10):
You mean the Hindulang money?
Yeah yeah, happened in realitywas when we, when we found the
um, when we found the nashermoney, the magistrate was
working the case the swissmagistrate and they were
prosecutor magistrates, so theywere both prosecutor and judge.
(32:30):
It was fabulous.
And uh, so he he said you know,the evidence you sent me also
leads to other accounts overhere, and that's how we got into
that.
I assigned one of myprosecutors that worked for me,
rich Byrne, to the case.
I said go for it.
He went for it and it was justfascinating, fascinating.
Speaker 1 (32:55):
Yeah, and it developed.
It was.
You know, I talked about thepolitics internal with customs
and we sent a bunch of peopleover to the LA, jersey and when
I met with Rich Byrne he came inand he said we can't get any
action from customs.
And I was kind of a guy whowent against the grain with
(33:18):
headquarters occasionally and Isaid, rich, we got a detail,
we're going to taff it for threemonths over there and that, and
I said, as a matter of fact, Igot money for you guys to go.
You go black too, who'sdeceased but was a great
(33:40):
prosecutor and, uh, paid for thewhole trips to get it.
Now it sounds like this was nota vacation.
This was the aisle of and Iwent over myself.
I kind of had interesting.
I went there and the next day Iwas detailed to 9-11.
I did my business there andnext thing I know I'm in New
(34:00):
York City, so that's the kind ofrun and gun that we did with
customs.
But so they went over there andwe had it.
You know, I was talking topeople at headquarters and
they're like, how much do youneed?
And I said, oh, maybe $200,000.
And they're like looking at mewith two heads, because it was
(34:23):
going to be asset forfeituremoney in the pool up there to
fund the trips for the USattorneys and the agents to do
this.
And then I said, kind of it's$250,000 and $100 million.
Okay, all right, 250 000 and100 million dollars.
Okay, all right, you think youcan staff it.
And uh, and they did, you knowso 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 inMiami and I started doing health
care fraud prosecutions.
As you probably know, miami wasthe ground zero for health care
fraud and, quite frankly, thetruth of the matter is is that
in the mid-90s, particularly 97,when extradition became
(35:17):
permissible again in Columbiawhere we could extradite cartel
leaders, the cartels literallystopped doing business in Miami
and moved their business almostentirely and in South Florida
and moved their businessentirely to Mexico.
It was just the cost of doingbusiness in South Florida became
(35:40):
to be too much because agentslike Toby and other agents did
such a terrific job in ouroffice, did a really terrific
job in driving up the cost ofdoing business for these guys,
and so they literally in themid-90s they moved all
operations through Mexico andmostly through, you know, the
(36:01):
southwestern states, you knowCalifornia and New Mexico and
all that.
So drug trafficking as anopportunity to prosecute really
went way down in South Floridaliterally.
(36:21):
And so the next big thing was alot of the drug traffickers
moved into the healthcare fraudbusiness because it's a lot
easier and safer and you caninvolve your whole family and
the checks come from the UnitedStates government.
So it's a much safer and betterbusiness.
(36:44):
So I started doing.
They put me in charge of theeconomic crime unit in Miami.
We had one.
I'm just giving you sort of howI transitioned out of drugs to
the economic crime unit and intoDC, transitioned out of drugs
to the Economic Crime Unit andinto DC.
(37:05):
So I ran a section, theEconomic Crime Section in Miami.
It was 20 attorneys.
I interviewed all the agenciesas to what the issues were in
South Florida then in 1997.
Almost invariably, everyonesaid healthcare fraud.
Invariably, everyone saidhealth care fraud.
And so I came back and we hadone and one half prosecutors
(37:25):
assigned to health care fraud inSouth Florida, which was
absolutely fucking ridiculous.
So I told 10 of the prosecutorsin 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.
I replaced them with new peoplethat were healthcare fraud
(37:45):
prosecutors and we started totackle healthcare fraud in a
very significant way in SouthFlorida like it had never been
addressed before.
I mean, we're talking billionsand billions and billions of
dollars being stolen from ourpublic FISC on a monthly basis,
and so I ended up buildingwhat's called the Healthcare
(38:08):
Fraud Investigatory Center inMiami, which was a it was
actually Miramar which was aplace where the FBI, hhs, oig
agents in the US Attorney'sOffice could go and both store
evidence and investigateprosecuted cases.
Huge, huge success.
We ended up understanding thedata because, remember, in
(38:31):
healthcare, medicare is agovernment agency and they house
all the data.
So we could look at the dataand see the trends and see where
the fraud was moving to andwhat type of fraud was going on,
just by looking at the data.
So we got the agencies to allshare data and we began
(38:51):
targeting significantorganizations before they stole
all the money, because most ofthe time in Medicare it's pay
and chase.
The CMS will pay the fraudstersand then we have to chase the
money Once the fraudsters get it.
It's very difficult.
So our desire was to grab themoney.
First case we prosecuted inSouth Florida.
(39:13):
We saved the government.
The government was spending abillion dollars a year just in
South Florida on infusiontherapy.
After we used this data toprosecute all irrelevant
individuals, billings went froma billion dollars a year to
$30,000 a year because it wasall fraudulent.
(39:34):
So it was very effective.
I did that for five years, gota call from Washington.
They were prosecuting Enron.
Actually at the time they wereprosecuting Arthur Anderson.
They wanted to build up thefraud section in the Department
of Justice to be sort of afighting machine.
They asked me to come up thereand participate in teaching
(40:01):
prosecutors how to fightwhite-collar crime efficiently
and effectively.
I went there in 2002 during theEnron scandal, ended up being
the acting US attorney overEnron during the Skilling and
Lay trial.
Then I prosecuted white-collarcases 2002 to uh 2011 when I
(40:23):
left the department of justiceI'm just curious real quick,
like what's a typical um healthcare fraud scheme well, there's
no such thing as a typicalhealthcare fraud.
Speaker 3 (40:34):
Well, I'm saying like maybe what's, what's, what was
like the easiest, like lowesthanging 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 onesthat started in Miami, the ones
that were sort of the thing thateverybody did in Miami was DME
fraud.
So it's durable medicalequipment, right.
So durable medical equipment,right.
So durable medical equipment isequipment like a wheelchair, an
(41:06):
arm brace, anything that's apiece of medical equipment, and
they would have shops set up allan electric wheelchair for
$7,000.
And the typical fraud is youcollect Medicare patients and
for some reason Florida has abunch of old people that are
willing to sell their Medicarenumber, and you recruit patients
(41:28):
and you sell them devices thatthey never get and you never
give it to them but you pretendyou do, and so there's no actual
transaction happening.
And then, so that's sort of howtypically it started.
The first case I prosecuted,when we opened up the Healthcare
(41:50):
Fraud Investigatory Center.
They had what was called aninhalation machine scam where,
as you know, older people withCOPD have to breathe through a
machine and the drugs areadministered through the
(42:10):
breathing machine and this isall.
It wasn't until 1996 thatMedicare paid for drugs.
That's part D.
But before that, if the drugwas administered through a piece
of durable medical equipment,then they would pay for it, and
(42:31):
only then.
So the scam at the time wasbecause the scam already was
oxygen.
Right, I'm pretending you needoxygen, so I'm going to sell you
monthly oxygen, and of courseyou 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 youneed um.
(42:52):
You need to get some sort ofdrug in your system, like you
know those little spray things,atomizers.
Oh, now you need that deliveredat night through a piece of
machinery.
So we took down 50 people whowere three pharmacies who were
whipping up these drugs in theirback rooms which, by the way,
(43:17):
the drugs are produced bymedical companies.
You don't need to whip them upin your back room, but they were
quote mixing them likealchemists in their room, like
pharmacies used to operate witha mortar and pestle.
Anyway, it was because peopledidn't need them, so they were
just manufacturing garbage.
They were delivering some ofthe shit, they weren't
(43:38):
delivering others and they werebilling as if it was real stuff
and it was literally hundreds ofmillions of dollars.
So that was the forcedorganization.
I took out three pharmacies, awhole bunch of clinics and a
whole bunch of patients, and sowe took those out, there was, I
think, 42 people were in ourfirst indictment, so that's it.
(43:58):
But that's also the case whereI 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 isacetylcysteine?
And they said, well, that's adrug that's used to dislodge
(44:19):
thick mucal plugs in cysticfibrosis patients, and 90% of
those drugs are being billed inMiami 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 doingthis all the fucking time, using
the data to figure out wherethe 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 toldyou was an AIDS therapy that
wasn't used, but they werebilling a billion dollars a year
.
And then when I went to DC, Isaid let's do this all across
the country.
So we started establishinghealthcare fraud, strike forces
in certain areas where highprofile fraud, using data to
(45:10):
target the fraud, and literallyin our first year of putting
strike forces in, where wetaught them how to do this and,
by the way, fucking USAttorney's Office weren't
prosecuting any of this shit,right, people were stealing tens
of billions forever and most ofthem didn't want us there
because we were proven theyweren't doing anything.
(45:31):
But now we have strike forcesin 13 cities around the country
and they routinely savetaxpayers over $100 billion a
year, and most of thesedistricts didn't want us fucking
there.
We had to force our way inthere.
So it's a wonderful thing andthe data tells a story.
(45:52):
And then what we did when wewent into DC is we started using
that data to focus on othertypes of white collar crime,
particularly crimes that happenin the banks.
In other words, banks areselling certain stocks whatever
they're selling and we use datato track, sort of to the CFTC
(46:19):
where the trading was fraudulent.
And so we use the same modelthat proved efficient to go
after trading the traders atcertain banks and financial
institutions.
And so it's a model that if thegovernment had a half a brain,
they would continue and to usethroughout the world to
throughout the country, world,to, uh, throughout the country,
(46:41):
to to tackle um elite whitecollar front crime I mean like
are all one shit are all thesetype 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 likehow, how was it on the job
training, or were you justintellectually?
Curious enough to know abouteverything 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'slying, cheating and deceiting.
You just have to prove they'relying, cheating and deceiting,
right.
So one of the things about ourmodel that we did is you didn't
need to have a witness, youdidn't have to cooperate, didn't
need a snitch.
I could prove from the datathat you didn't have that shit
(47:30):
to sell and all the money endedup in your pocket.
And so we convicted a number ofpeople early on without a
frickin witness who said thisguy's involved in the scam,
because we could put all themoney in their pocket from the
scam, which we could prove witha scam.
So, um, you know, almost alwaysyou want someone who's going to
(47:53):
flip and say this is a crime.
But on many occasions we wouldprosecute without a cooperating
witness who said that guy's thebad guy because we would prove
it was a complete scam and allthe money ended up in Mr Big's
pockets.
So fuck him, convict him.
And invariably the jury would.
(48:21):
How to harness the data?
And we had this wonderful ladynamed Peggy, who was a former
nurse who taught all of Americanow how to look at the data, how
to analyze it, how to focusupon it and how to use the data
to track where the crimes arehappening.
And that was novel, but I didit because I had someone like
Peggy to help me do it, and Ihad, you know, the FBI gave me
money, health and human servicesgave me money, and you know,
(48:42):
it's just being in the rightplace at the right time too.
A lot of it is, um, but alsobeing a little bit inventive and
and understanding how crimeworks and how criminals work
what was like the most rewardinggoing after those lawyers or
going after the banks, or goingafter healthcare fraud.
(49:04):
It's all.
To me, what's rewarding is theimpact you can make.
Right, when I take out anentire organization, not when I
say me it was.
I had a team, right, I hadagents, I had fellow prosecutors
.
I don't mean me.
When we are able to take out anentire organization, a drug
(49:24):
trafficking organization, putthem out of fucking business,
that's rewarding.
Right, and seize all theirmoney, that's rewarding.
When we can go after healthcarefraud organizations and fucking
disembowel them and savetaxpayers billions of dollars,
(49:45):
billions of dollars.
And not because Washington DCtells us how to do it, because
we tell them how to do it right,we're on the ground.
We're telling them this isfucking how you do it.
I mean, the FBI came to me inWashington DC and said Miami's
not working anymore.
Can you strike force Miami andgo back there?
(50:05):
I said no, but one of thethings we can do is use that as
ground zero to put strike forcesaround the country.
And I got my people inWashington DC to support me.
So it's a lot of peoplesupporting.
I hired my health care frauddeputy from Miami C to support
me, so it's a lot of peoplesupporting.
I hired my health care frauddeputy from Miami, I hired him
into Washington.
So, and all at every turn,people are saying yes in the
(50:30):
government, empowering me to doit.
That's very important, and sothat's satisfying.
And then when you savetaxpayers a billion dollars,
that's satisfying because thatmoney goes back to the elderly
for healthcare services, right.
And then, finally, when we movedon from that and went to Wall
Street to put, you know, the CEOof two CEOs of insurance
(50:56):
companies, major AIG Insurancecompanies, 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 rewardsall around.
And it wasn't until theleadership in DOJ wouldn't let
(51:22):
me do that anymore that itbecame 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 EricHolder, lanny Brewer group where
we have this, the largesteconomic fraud in the history of
America, and they allow us toprosecute zero people.
(51:43):
That's when it became veryunrewarded.
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 havemy own firm, which is equal,
which is also rewarding I'd loveto 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 Scribblesbecause he said I wasn't taking
notes.
I was actually scribbling andit looked ridiculous on the
movie screen, so my name hecalled me.
Speaker 3 (52:54):
Scribbles.
I mean, I think I could talk toyou, paul, until you know, the
Red Sox win their next WorldSeries.
Speaker 1 (53:03):
Oh, they lost, they lost.
They went a long time withoutthe 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 agreedto 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.
Yeah, I'm here yeah, I can seethat and I also see the red
socks, so I'm not gonna arguewith that.
Uh, we're pretty much on thesame team.
Thank you, paul, for coming inand and like I said, we're going
to need we got such a spectrumof people on this.
(53:42):
It's unbelievable.
I can't even tell you, we juststarted filming the last two
days and you know it's great toend today's with you because
it's all going to fit in and youknow, maybe some of the
individuals you'll recognizethat are on there, but I don't
(54:04):
know.
That's what's going to be asurprise 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 thatultimately there's a whole.
You know we're talking aboutjust completely the law
enforcement side here, butthere's also a human side to all
of what we do and what we did.
And I think you know we didn'treally explore that tonight, but
I'm happy to explore that aswell.
And, uh, you know some of therewarding stuff.
(54:31):
You know, not as rewarding, butsome of the rewarding stuff is
you.
You know some of the people whoI convicted and sent to jail
for 30, 40, 50 years one of themwas 50 years would literally
send me Christmas cards everyyear and, and you, you get a
(54:52):
chance to change people's livesto an individual level.
It's not always that way.
I mean, some people arehardened criminals, but you know
I'm very proud of one guy thatI got 50 years.
He ended up helping on a lot ofvery significant cases.
I helped him get a sentencereduced to 30 years and he's a
(55:15):
productive member of society now.
And he was a really bad guy areally 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 youknow I just do my job, and so
there's a human side to all ofthis Absolutely, and then we're
gonna have some of those peopleon and you know your experience
with that, with the rule 35sthat he explained, explained and
that came into effect, really,really can give people an
(55:45):
opportunity.
Clemency, you know, pardons andall that come into play and you
know, you know it's if they, ifthey prove themselves in
society or in prison, theydeserve a second chance.
Thank you for coming on tonight.
Let's see.
(56:05):
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.
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