Speaker 1: This is the face of health care fraud in America. A Miami businessman smiling as he counts stolen Medicare money in this video secretly recorded by a government informant. From sham storefronts to empty offices billing the government for Medicare. What is this business? To buried millions in cash. The business of stealing Medicare and Medicaid dollars has never been as brazen. What are we talking, a hundred billion dollars?

Speaker 2: That's probably a conservative number.

Speaker 1: Why Medicare fraud?

Speaker 3: It's easy. It's unbelievable. It's very easy.

Speaker 1: We're in South Florida today at the headquarters of the agents charged with investigating Medicare and Medicaid fraud. And today they're taking us on location to show us how those schemes work. Behind the steering wheel for this rare ride along is Omar Perez Aibar, Florida's special agent in charge of the investigation. So Omar, give me a sense of where you're taking me.

Speaker 2: So today we're going to head down south portion of Florida.

Speaker 1: He's one of some 450 special agents nationwide from the Office of Inspector General who fight a health care fraud battle every day. Annually, estimated Medicare and Medicaid fraud tops 100 billion dollars. Around the world, it's known for its postcard perfect beaches. But to federal investigators, Florida's famous for its fraud. Massive theft from the government's health care benefits far more than anywhere else in the nation.

Speaker 2: We're going to head over to a durable medical equipment company which unfortunately has been one of the lines of business that is really keeping us busy here.

Speaker 1: Durable medical equipment, DME. Think braces and wheelchairs. Fraudsters buy lists of patients and doctors so they can steal from the government.

Speaker 2: And with those two key pieces of information, it can sit at a place that is open Wi-Fi and just start submitting claims to Medicare.

Speaker 1: In South Florida alone, Perez Ibar says about 90 percent of the DME companies are fraudulent. He had two businesses here?

Speaker 2: He had two businesses set up here. So we're at 241. But if you can notice, this is kind of the business. It looks so nondescript. It is and that's purposeful. And they try to, they want to try to keep us off their trail.

Speaker 1: A storefront once used to build the government out of 48 million dollars in a single year. Run by the guy counting the money.

Speaker 2: He thought he was a CEO when in fact he was just a crook.

Speaker 1: His name is Jesus Garces. Back on the road, we head to the home where Garces stashed his stolen money. This is where agents armed with a search warrant say they made a startling discovery. Garces had hidden some 2.5 million dollars in cash in 12 PVC pipes under his home. And where were the pipes?

Speaker 2: So he had buried them in the foundation of the home. There was a portion of the home that they were remodeling and so he put the PVC pipes in the ground.

Speaker 1: Was it just loose cash stuffed into the pipes?

Speaker 2: They had saran wrapped them or packaged them. They almost looked like bricks of cocaine. So hand would go in, a pipe would come out. Hand would go in, a pipe would come out. And it really was for us an indication of how brazen this DME fraud is.

Speaker 1: Garces pled guilty to health care and wire fraud and was sentenced to 12 and a half years in prison. Back at headquarters, Perez Ibar shows me how bold these health care schemes have become.

Speaker 2: The fraudsters here in South Florida are getting so brazen that even in our own building they decided to set up a fraudulent DME company.

Speaker 1: So they don't even care that agents in charge of investigating this Medicare fraud are in the same building.

Speaker 2: They're in our face and we're just as brazen back.

Speaker 1: Investigators shut down this operation but the fraud is flourishing. Why do the fraudsters even need to set up a storefront?

Speaker 2: It is Medicare regulations that you have to have a business, especially in this case for durable medical equipment.

Speaker 1: We're at the Miami Merchandise Mart, which federal agents tell us is a hotbed for these fake companies set up to build Medicare for products and services they never deliver. In this maze of tiny shops in a kind of indoor flea market, we find exactly what investigators describe. There's a desk, perhaps there's a bit of a curio with one or two different types of braces

Speaker 2: they'll have the manuals that Medicare requires and usually there's some type of partition. If let's say we're talking about orthotics because the patient is supposed to come in and actually get fitted, that's the DME company. Most times we show up there's nobody there or if there is someone there, they have no clue what business they are representing or how it even operates. Agents shut one down and new ones pop up.

Speaker 1: In this business, which has been billing Medicare for durable medical equipment, we find a young woman sitting alone at a desk. Hi, how are you? I'm Contessa Brewer. I'm with CNBC. What is this business? The woman says it's a medical supply store, but she has nothing to do with the actual business and the only thing she can show us right now is a brace. She gives us a business card for the owner. I call the number, but it rings at the same time. I call the number, but it rings at the desk inside. Hi, this is Contessa Brewer from CNBC. We just talked a minute ago. This is the number you gave me to call to talk to Antonio. I leave a message for the owner who we eventually reach weeks later. He says all the durable medical equipment is ordered through another company after the patient sees a doctor. He refuses to give more information, but government records show the company has billed more than $2 million to Medicare, mostly for wound care. That doesn't surprise this man. We'll call him Julio because he wants to conceal his identity. Julio admits he knows a lot about stealing from Medicare because it was his entire life for many years in Miami. Why Medicare fraud? Like, why was that alluring to you as compared to other ways, maybe even illicit ways to make money? Did someone teach you how to game the system? Are there a lot of people who are willing to break the law? Is there a lot of money to be made? How much? How did that stack up, the risk versus the reward?

Speaker 3: Reward, it was excellent.

Speaker 1: There is still risk. Fraudsters get caught. The cases against them fill this massive evidence room.

Speaker 2: So we do search warrants, secure evidence, make sure we have to keep it in this type of pristine condition. So this is drawer upon drawer full of fake documents. This is evidence that we seized during one of the search warrants.

Speaker 1: I look around here and this is one warehouse in one county in Florida. How big is this problem?

Speaker 2: South Florida, without question, is the ground zero for health care fraud. But it's only one state. There are 49 others in territories where these types of schemes are occurring.

Speaker 1: The Office of the Inspector General says of every $100 spent by Health and Human Services in 2021, only two cents was spent on oversight and enforcement. Yet its return on investment? $12 for every dollar it spends on enforcement. We asked the federal centers for Medicare and Medicaid services about the widespread fraud. They told us we continuously work to safeguard taxpayer dollars and strengthen program integrity in our operations by identifying vulnerabilities in the system. What I was told was that what we need is investigators. And we need a lot of them. Why?

Speaker 2: It's hard for us to keep up with the amount of fraud that is occurring. We just can't keep up. We need some additional resources.