0 i will talk to a woman that says weiner and huma's problems are not private and a matter of judgment. star jones joins me tomorrow. anderson cooper starts right now. tonight a special rehab clinics filing claims for patients and you are paying for it. later it is called the largest sex trafficking bust. 76 cities, 150 ledged predators captured. we will take you inside and talk to child safety advocate and crime fighter john walsh. whoever walked in and walked out with $136 million worth of jewelry in a brazen daytime robbery. we begin keeping them honest with part one of an investigative series we are calling "rehab racket." as you will see that is what it is. we are talking about the abuse of a state sponsored, tax-funded program that looks like a noble cause on paper, clinics getting money billing for each addict that comes for counseling. they have found a system riddled with fraud and oversight from billing for phony patients to allowing convicted felons to run drug rehab centers. our investigation found it is too easy to take advantage of the people who need the most. this is no nickel and dime fraud. it is happening in california and we are talking big money. tens of millions of dollars, federal tax dollars. it is your money. drew griffin tonight keeping them honest. >> reporter: drew griffin with cnn. how are you? >> reporter: george has run a taxpayer funded drug rehab business in southern california for six years which is surprising because for the last 11 years he's been on a list of people banned from billing medicaid. convicted of student loan fraud, he should have never been allowed to even open this clinic called gb medical. >> what's going on? >> reporter: i'm asking a few questions about the drug rehab business. you seem to be at the center of fraud allegations here. >> no, no, no. >> reporter: have you been faking signatures on to sheets of paper and billing the state for the money? guess what else, he is facing felony charges for ripping off the state. allegedly paid by taxpayers to rehab drug abusers that weren't even there excuse me, sir. how can you bill for clients that don't exist? mr. aluno, one second, sir. we never saw him again. his drug rehab business here in southern california has been part of the largest medicaid program in the nation paid for with federal and state dollars. a one-year investigation by cnn and the center for investigative reporting found the rehab portion of the program called drug med cal is ripe with fraud. has operators who bill the government for made up clients and often get away with it. joy saw plenty of fraud in the nine years she spent working as a supervisor over drug med cap. >> i believe the word got out there was easy money to be made in the out patient drug free system. >> reporter: how bad is it? >> it is bad. real bad. i left state service about three years ago, and we would have one provider that would bill for over $1 million in one year that we believe was 100% questionable billing. >> reporter: that one provider was no isolated instance. over and over, we found examples of fraud. not hidden fraud. this was happening in plain sight. for example george aluno. darshay went there and it is against the law to pay clients but that didn't stop aluno. she said he paid $5 each time they signed in for group counselling. all so he could charge med cal 28 to $61 per signature. >> at first i didn't know it was illegal. i thought it was just a thing you are supposed to get paid for going there until people are like -- george is like don't speak outloud about the money. >> reporter: what did she do with the $5 given to her by the drug rehab center? she bought drugs. >> i was going to get the money to just buy weed. my whole thing was like you all was paying us to get high. >> reporter: the day after our interview, the state charged aluno and three of his employees at gb medical with grand theft in connection with more than 2,000 phony bills for rehab dating back to 2009. he pled not guilty but records show your tax dollars still paid him, even after he was arrested and out on bachlt his attorney blamed the billing practices on counselors and employees who were not well supervised. the attorney says he was a certified counselor himself, who was allowed to bill medicaid. despite that, the clinic voluntarily shut down on july 1st, without explanation. cnn and the center for investigative reporting reviewed thousands of records in california's drug med cal program, including program audits. we analyzed patient billings and even watched clinics undercover to see who was getting treatment and who wasn't. the result, we found the last two fiscal years, nearly half of the $186 million spent for drug med cal, about $94 million went to clinics that have shown questionable billing practices or signs of fraud. case and point. the man with the cigar, a convicted felon named alexander ferdman. >> >> reporter: he helped to prosecute him in 2000 for running a texas-based crime syndicate which staged car crashes ripping off big insurance companies. >> he listed his occupation as driver of an ice cream truck. >> reporter: he pled guilty to organized crime and sentenced to seven years in a texas prison. he served just one year, let out early for good behavior and end up in california. even though felons are barred from running drug med cal facilities he opened one and it has been easy money for ferdman. despite his organized crime conviction, his med-cal contract is worth $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. i'd like to ask you questions about your business. >> i don't have time right now. >> reporter: how can a guy with a record like you operate a drug rehab clinic in california? you have been convicted of a major insurance car crash scheme in texas. >> i was convicted but that is not what it seems. that is first of all and whatever happened 15 years ago what relevance does it have today. >> does the county know about your record? >> they probably do, i don't know. >> reporter: what happened in texas, ferdman told us should stay in texas. >> i was facing 99 years and picked a smaller sentence so that -- i could have it much worse. but there was no fraud and there was no record of it in any way. it's a very long story. >> reporter: that was a huge case in austin, texas, statewide actually. >> that's what they tried to bill it and that's why they pursued it and it wasn't what it seems and what they said it was. >> reporter: can you tell us how you came here and left texas how easy or hard was it? >> i don't want to talk about it right now. >> reporter: with widespread fraud in the program, former supervisor says it is not just taxpayers who are being cheated. >> i'm not the employee anymore that has to look at this every day but i'm a taxpayer that knows this is going on and it angers me and there's story after story after story about medicaid dollars cut from people who need the services. >> incredible investigation, drew and so infuriating. there's a lot of people that need help and a lot of good clinics and this gives a bad name to the industry. is the state doing anything about these? >> finally they are beginning to. the state is cracking down. once they realized the depth of our reporting, anderson and it would be aired nationally on your show the state announced a state-wide crackdown. the felon from texas clinic has been shut down. 16 others temporarily suspended and california announced a statewide review of the entire rehab clinic program, although details are sketchy. >> why did it take so long? >> that was my first question to the state of california. as we continue our reporting, i think it will be your questions and all of your viewers' question. as we will reveal tomorrow night, report after report, investigation after rooegs investigation, year after year finds the county and state investigators were finding this fraud, finding questionenable billing practices and the clinics remained open and kept billing taxpayers for it. >> that is the thing and people aren't getting the help. you can make a difference if you have a tip for drew, go to cnn.com/investigate and let us know what you think of his report. more tomorrow on this. coming up next, the fbi's biggest under cover operation yet on child prostitution and how one armed robber managed to get away with a foredmun jewels. it was originally thought to be $50 million. authorities say some $136 million in jewels was taken from this hotel to the south of france where the chase is on right now. when you're ready to take skincare to the next level you're ready for roc® new roc® multi correxion has an exclusive 5 in 1 formula it's clinically proven to hydrate dryness, illuminate dullness lift sagging diminish the look of dark spots and smooth the appearance of wrinkles together these 5 elements create ageless looking skin roc® multi correxion 5 in 1 it's high performance skincare™ only from roc®
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