By Terrence McCoy
By Scott Fishman
By Deirdra Funcheon
By Allie Conti
By New Times Staff
By Ryan Pfeffer
By Deirdra Funcheon
By Kyle Swenson
In 1996, Steven Steiner (who didn't use the g in his name) and other Steinger associates founded an AIDS clinic called Community Healthcare of Broward next door to the Mutual Benefits office.
And Steiner proved adept as a spokesman for the clinic, which was soon pulling in a million dollars a year in federal grants and milking Medicaid for big money. It also ran a for-profit pharmacy on the property called Commcare that dispensed AIDS medications to the clinic's patients.
The patients would be treated and then pitched on selling their life insurance policies.
To gain further credibility and reach, Steinger and his brother struck a deal with the Indiana-based Ryan White Foundation, named for the child who contracted HIV in 1984 during a blood transfusion.
With the AIDS clinics, pharmacy, and the name recognition, Mutual Benefits began giving VIP tours to potential investors, picking them up in limousines, showing them the clinic and the business, taking them to lunch, and introducing them to doctors.
"They treated me royally," says Albert Scartz, an 88-year-old Mutual Benefits investor who sank $500,000 into the company. "They showed me everything. It was an open book. But it was all a fraud."
And there were plenty of early signs that things weren't right at Mutual Benefits. The clinic, not surprisingly, was soon in turmoil and facing regulators' queries.
In 1998, the state began another investigation, this one by the Agency for Healthcare Administration, amid allegations of Medicaid fraud associated with the pharmacy. Two doctors quit the board after learning that Steinger had used their names in advertising for Mutual Benefits. And it was discovered that the clinic's director wasn't licensed in the United States.
Ryan White's mother, Jeanne, cut all ties with the brothers, telling the media in 1998, "There's nobody more greedy than the Steingers."
The state, meanwhile, would keep the Medicaid fraud investigation going for years. In 1999, the Office of Statewide Prosecution began its own investigation of Mutual Benefits as complaints about the company kept coming in. This investigation would take years — and thousands of hapless investors would be hoodwinked into putting their money into Mutual Benefits while authorities failed to take action.
The investigation was given a catchy name, "Operation Death for Dollars," and at first it centered on an unlawful practice called "clean-sheeting." That is, the holders of the policies had withheld their terminal illness — AIDS, in this case — from the insurance companies so they could get big-dollar policies, which they then offered for sale through Mutual Benefits.
The state investigation found that an estimated 20 percent of all policies Mutual Benefits was selling had been clean-sheeted and that company executives and attorneys were involved in the fraud.
It was practices like this that prompted Lt. Glen Hughes, an investigator with the Florida Department of Financial Services, to write in an email to Chief Assistant Statewide Prosecutor Lisa Porter: "Unbelievable! These guys are stealing from all sides."
It gets worse. Investigators discovered that Steinger was pulling "regular" consulting fees not only from Mutual Benefits but also more than $250,000 from Commcare Pharmacy. He had the pharmacy send the checks to one of his shell companies, the aptly named Bullmax.
In May 2001, the state got a break in its case. It learned that Steinger had hired an unlicensed doctor named James Davis to rubber-stamp bogus life expectancy statements at $200 a pop. Davis also worked at Commcare and was an early investor in the business. He told investigators that Steinger personally ordered doctors to prescribe certain drugs whether the patients needed them or not, according to state records.
One doctor who worked at the clinic and pharmacy, Ginge Brien, told investigators that he believed that too many patients were getting a certain intravenous medication called IVIg and took some of them off the treatment. "After removing the patients he stated he was taken to lunch by Joel and Steven Steiner," investigators wrote in a report. "During the lunch Brien was told by Joel that he needed to prescribe IVIg as it made them money."
Brien refused to do it and was soon fired. Brien said another doctor at the clinic, Clark Mitchell, "would do what he was told to do." Another former Steinger doctor, Joey Kenney, told investigators that several patients were secretly prescribed an AIDS drug called Serostim and that an agent with the maker of the drug, Serrano, was often on the premises. He too said he felt pressured and "intimidated" by Steinger to prescribe certain drugs.
Investigators found that Commcare had billed Medicaid an astounding $18 million for Serostim from July 1999 through January 2002. During that time, Steinger acquired another large AIDS services company, Center One. Once a respected entity, Center One would soon be consumed by scandal.
At the same time, Steinger was becoming one of the biggest drug pushers in Broward County. By 2000, Mutual Benefits was the largest viatical company in the United States.
As Mutual Benefits' empire grew, the viatical industry was being hit with a lot of bad media coverage. Company after company went down amid fraud allegations. Steinger responded to the bad publicity by having his company issue an extraordinary news release on November 10, 1999.