program, including program audits. we analyzed patient billings, even watched clinics undercover to see who was getting treatment and who wasn t. the result, we found that in the last two fiscal years, half of the nearly $186 million spent for drug medi-cal, about $94 million, went to clinics that have shown questionable billing practices or signs of fraud. case in point, the man with the cigar, a convicted felon named alexander ferdman. ferdman was the organizer. marshall vote was the lead investigate who helped prosecute ferdman back in 2000 for running a texas-based crime syndicate that staged car crashes ripping off big insurance companies. he listed his occupation as a driver of an ice cream truck. ferdman pled guilty to organized crime and was sentenced to seven years in a texas prison.
he served just one year, was let out early for good behavior, and ended up in california. even though felons are barred from running drug medi-cal centers ferdman soon opened a rehab clinic called able family support. taxpayer funded drug rehab has been easy money for alexander ferdman. despite his organized crime conviction in texas, his california drug medi-cal contract is now worth about $2 million a year. his salary, $180,000. even after a 2011 review by los angeles county found evidence of what it considers to be fraudulent practices at his business, ferdman was allowed to expand. drew griffin with cnn. how are you doing? i d like to ask you some questions about your business, if i could. i really don t have time right now. you can explain how can a guy with a record like you be operating a drug rehab clinic
billing for the koun county ser you re not providing. and then there s alexander ferdman. he came to california, setting up a drug rehab clinic, and billing taxpayers even though felons are barred from running drug medi-cal centers. mr. ferdman, how can a guy with a record like you being operating a drug rehab clinic here in california. you have been convicted of a major insurance car crash scheme in texas. i was convicted, but it s not what it seems. in the last two fiscal years, taxpayers spent nearly $186 million supposedly treating alcohol and drug abuse patients in california. our investigation with the center for investigative reporting found half of that money or about $94 million has gone to clinics that have shown questionable billing practices or signs of fraud.
here in california? you ve been convicted of a major insurance car crash scheme in texas. i was convicted, but it s not what it seems. that s first of all, and, second, whatever happened, i don t know, 15 years ago, what relevance does it have to today? does the county know about your criminal record? they probably do. i don t know. what happened in texas, ferdman told us, should stay in texas. because i was facing 99 years and i chose to, you know, pick a much smaller sentence without any of it because, you know, i could have a much worse but there was no fraud and there was no record of it in any way. it s a very long story. how could you say that? that was a huge case in austin, texas, statewide, actually. that s what they tried to build it, but and that s why they pursued it, but it wasn t what it seems and what they said it was. could you tell me real
can a guy with a record like you be operating a drug rehab clinic here in california? you ve been convicted of a major insurance car crash scheme in texas? i was convicted, but it s not what it seems. that s first of all. second, whatever happened, i don t know, 15 years ago, what relevance does it have to today. reporter: does the county know about your criminal record? they probably do. i don t know. reporter: what happened in texas, ferdman told us, should stay in texas. because i was facing 99 years. i chose to, you know, pick a much smaller sentence. i could have a much worse. but there was no fraud and there was no record of it in any way. it s a very long story. reporter: how could you say that? that was a huge case in austin, texas. statewide, actually. yeah. that s what they tried to build it. but that s why they pursued