RTA says it was victim of multi-million dollar scam

CLEVELAND - More than a week after a FOX 8 I-Team investigation revealed that RTA's own auditors questioned $1.8 million in prescription payments, the transit agency says it was the victim of a multi-million dollar scam that impacted both public and private organizations nationwide.

The agency said it already terminated ten employees as a result of what it had found.
RTA declined to do an interview before our initial story to explain what happened. It now says it was the victim of a nationwide scam.

"We found it. We investigated. We reported it and we took decisive action," said RTA CEO and General Manager Joe Calabrese, in remarks attributed to him in a statement from the agency.
"Now," Calabrese continued, "we're in the process of working with an insurance consultant to get our money back through our crime insurance policy."

But, the I-Team has learned, one of the agencies investigating what went on has closed its investigation without filing any criminal charges.

"After reviewing relevant facts and documents, this Office determined that there was insufficient evidence of intent to defraud by the employees," said the Cuyahoga County Prosecutor's Office in a statement.

The statement added that "the portion of the case concerning pharmacy and prescribing doctors was referred by RTA to the FBI. We have no information on the status."

The FBI has declined to comment on the investigation. The U.S. Attorney's office will neither confirm nor deny an investigation.

RTA says it was victimized by a scheme where people identified only as "marketers" recruited several RTA employees to order prescriptions to their homes through unidentified doctors. RTA says employees got paid hundreds of dollars a month to do so.

The agency says some unidentified pharmacies took advantage of loopholes in how certain types of drugs were coded, and billed huge amounts to the companies that handled RTA's prescription benefits.

Those costs were passed onto RTA, which is self-insured. So that means the costs were passed onto taxpayers.

In the most alarming example, RTA paid for 103 prescriptions of Flonase at a total cost in excess of $1.5 million.

Cleveland City Councilman Mike Polensek says he respects RTA's leadership, and hopes they can recover the money.

But he added, "You don't get the support of the public by paying 14 grand for Flonase."
A federal investigation reportedly continues, and finding evidence that someone intended to defraud RTA will be critical.

That's because just charging a lot of money - even $14,000 for Flonase - does not, by itself, mean someone committed a crime.

"You may be paying more then it's worth, but that's not fraud," says Michael Benza, a senior instructor of law at Case Western Law School.

Benza was not commenting on the facts of the RTA case, but just in general on the state of the law regarding the pricing of items.

In a statement released to FOX 8 Monday, RTA says the county prosecutor has discretion to prosecute, and all RTA can do is refer the results of its investigation to them.

The transit agency added that, because of the severity of its own findings, it also referred the matter to federal authorities, and those investigations continue.

RTA added that its insurance policy does not require someone to be found guilty of a crime before RTA can recover insurance money.

Read more, here.