FBI used spy gad­get to hunt fraud sus­pect

The Detroit News - - Front Page - BY ROBERT SNELL The Detroit News

Detroit — FBl agents got ap­proval to use a ter­ror­ism-fight­ing tool to hunt for a busi­ness­man charged with or­ches­trat­ing a $132 mil­lion health-care fraud scheme, sealed fed­eral court records show.

The records, ex­clu­sively ob­tained by The Detroit News, pro­vide a broader pic­ture of one of the largest health-care fraud in­ves­ti­ga­tions in Metro Detroit his­tory. At­tor­ney Gen­eral Jeff Ses­sions high­lighted the case July 13 while trum­pet­ing a na­tion­wide crack­down on Medi­care fraud.

Hun­dreds of pages of search war­rant af­fi­davits also fur­ther il­lus­trate the creep­ing use of a ter­ror­ism-fight­ing tool to solve a va­ri­ety of crimes, in­clud­ing im­mi­gra­tion of­fenses. In re­cent months, fed­eral agents in Detroit have used the counter-ter­ror­ism tool, a cell-site sim­u­la­tor, to find an un­doc­u­mented im­mi­grant and catch a man ac­cused of a lowlevel gun crime.

On July 10, a fed­eral mag­is­trate judge ap­proved an FBI re­quest to use the de­vice to find jet-set­ting busi­ness­man Mashiyat Rashid, 37, of West Bloom­field Town­ship. That’s the same day a sur­veil­lance team watched the ven­ture cap­i­tal­ist with­draw $500,000 from an area bank and stuff the money in a duf­fel bag, ac­cord­ing to the court records.

The court-au­tho­rized search

war­rant let FBI agents use the cell-site sim­u­la­tor, known as a Hail­storm or St­ingray, which mas­quer­ades as a cell tower. The de­vice, orig­i­nally de­signed for mil­i­tary and in­tel­li­gence agen­cies, tricks nearby phones into pro­vid­ing lo­ca­tion data and can in­ter­rupt cel­lu­lar ser­vice of all de­vices within the tar­geted lo­ca­tion.

“This demon­strates how (the de­vice) re­ally has be­come a runof-the-mill law en­force­ment tool in a whole range of in­ves­ti­ga­tions,” said Nathan Wessler, a staff at­tor­ney with the Amer­i­can Civil Lib­er­ties Union’s Speech, Pri­vacy and Tech­nol­ogy Project. “We shouldn’t as­sume or take any com­fort in the as­sump­tion that these are be­ing re­served just for vi­o­lent crimes and na­tion­alse­cu­rity in­ves­ti­ga­tions.”

Rashid’s lawyer de­clined com­ment.

As the FBI re­ceived court ap­proval to pin­point the lo­ca­tion of Rashid’s cell­phone, agents also were al­lowed to search 18 email ac­counts, phones and lo­ca­tions in Ohio and Michi­gan, the court records show. Agents searched Rashid’s home in West Bloom­field Town­ship — he was ar­rested at gun­point while wear­ing pa­ja­mas — and Detroit’s iconic Fisher Build­ing, which houses sev­eral Rashid busi­nesses.

The search war­rant af­fi­davits, out­lin­ing prob­a­ble cause to search the lo­ca­tions, were briefly un­sealed Mon­day in fed­eral court. The News ob­tained the af­fi­davits be­fore a judge re­sealed the doc­u­ments.

Lists of items that were seized dur­ing the searches are sealed in fed­eral court. Rashid’s for­mer lawyer claimed in­ves­ti­ga­tors seized all of the busi­ness­man’s money dur­ing the raids, leav­ing the busi­ness­man un­able to bankroll a de­fense.

Us­ing the de­vice was le­gal and au­tho­rized by a judge to find a wanted man who in­ves­ti­ga­tors feared would try to flee jus­tice, the U.S. At­tor­ney’s Of­fice said in a state­ment Wed­nes­day.

Use of the sur­veil­lance tool raises broad civil lib­erty con­cerns, said Dawud Walid, ex­ec­u­tive di­rec­tor of the Michi­gan chap­ter of the Coun­cil on Amer­i­can-Is­lamic Re­la­tions.

“Our or­ga­ni­za­tion has long had con­cerns about sur­veil­lance tac­tics be­ing used by the FBI and the in­tru­sive na­ture in which they have been de­ployed,” Walid said Wed­nes­day. “There have been con­cerns from some Mus­lim pro­fes­sion­als that peo­ple in the Mus­lim com­mu­nity may be get­ting ini­tially on the FBI’s radar, not due to any po­ten­tial crimes they’ve been in­volved in, but be­cause the agency is surveilling Mus­lims in gen­eral.”

Be­fore the raids, Rashid had a mul­ti­mil­lion dol­lar for­tune. The Mus­lim busi­ness­man, who moved to the United States from Bangladesh and is a U.S. ci­ti­zen, was build­ing a $7 mil­lion man­sion in Franklin, leased a pri­vate jet for a golf va­ca­tion up north, spent hun­dreds of thou­sands of dol­lars on court­side NBA tick­ets, drove a Rolls-Royce and stuffed se­cret stor­age units with cash, ac­cord­ing to fed­eral court records and prose­cu­tors.

The money came from a nearly decade-long scheme, fed­eral prose­cu­tors say.

In all, Rashid trans­ferred $10 mil­lion into his per­sonal bank ac­counts and made $6.6 mil­lion worth of in­vest­ments, the gov­ern­ment al­leged.

Prose­cu­tors say the con­spir­acy in­volved re­cruit­ing home­less peo­ple as pa­tients, send­ing phony bills to Medi­care, sub­ject­ing drug ad­dicts to un­nec­es­sary back in­jec­tions and pre­scrib­ing pow­er­ful pain med­i­ca­tion that ended up be­ing sold on the street.

The in­dict­ment against Rashid and six others was un­sealed July 12, two days af­ter FBI agents re­ceived per­mis­sion to use the cell-site sim­u­la­tor. He is be­ing held with­out bond and is con­sid­ered by prose­cu­tors a flight risk with over­seas ties and ac­cess to vast sums of money.

Since his ar­rest, the gov­ern­ment has frozen Rashid’s bank ac­counts, de­fense lawyer Wal­ter Pis­cza­towski wrote in a re­quest for bond Wed­nes­day.

The lawyer also chal­lenged in­for­ma­tion from a gov­ern­ment source that Rashid had money hid­den in stor­age units.

“Ad­mit­tedly, Rashid has a stor­age locker in Com­merce Town­ship,” Pis­cza­towski wrote. “In it is a 2006 Range Rover.”

The lawyer wants Rashid re­leased on bond with sev­eral pos­si­ble con­di­tions, in­clud­ing house ar­rest and a GPS tether.

Rashid is not a flight risk and has no in­cen­tive to flee if re­leased on bond, the lawyer wrote. Rashid needs to be out of jail to help care for a spe­cial needs son, the lawyer added.

Rashid faces up to life in fed­eral prison if con­victed of crimes in­clud­ing health-care fraud con­spir­acy, money laun­der­ing and re­ceiv­ing kick­backs.

In­ves­ti­ga­tors are armed with a va­ri­ety of ev­i­dence, in­clud­ing recorded con­ver­sa­tions, text mes­sages, med­i­cal records and bills, sur­veil­lance pho­tos and pic­tures from Rashid’s Face­book page, ac­cord­ing to one court fil­ing.

Agents also have ev­i­dence from co­op­er­at­ing wit­nesses and others, in­clud­ing Com­merce Town­ship res­i­dent Glenn Saper­stein, a pain man­age­ment doc­tor who the FBI says par­tic­i­pated in the health-care fraud con­spir­acy.

Saper­stein’s in­volve­ment in the con­spir­acy is re­vealed in the search war­rant doc­u­ments ob­tained by The News.

Saper­stein, 53, se­cretly reached a plea deal with prose­cu­tors on an un­known date, ad­mit­ting he par­tic­i­pated in a health-care fraud con­spir­acy in­volv­ing Rashid and others, ac­cord­ing to the search war­rant af­fi­davits.

As part of his plea deal, Saper­stein out­lined the con­spir­acy, FBI Spe­cial Agent Stephen Oster­ling wrote in one search war­rant af­fi­davit.

While work­ing at Rashid’s com­pany, Tri-County Physi­cian Group, Rashid or­dered doc­tors, in­clud­ing Saper­stein, to pre­scribe med­i­cally un­nec­es­sary drugs to Medi­care pa­tients, “many of whom were ad­dicted to nar­cotics,” the FBI agent wrote.

Saper­stein also ad­mit­ted billing Medi­care for in­jec­tions that were not nec­es­sary, doc­u­mented or per­formed, Oster­ling wrote.

The doc­tor also recorded con­ver­sa­tions with Rashid, ac­cord­ing to the FBI.

In one record­ing, Rashid said the back in­jec­tions were the “meat of our busi­ness,” ac­cord­ing to one search war­rant af­fi­davit.

“Rashid also dis­cusses the spe­cific codes that should be used to en­sure that Medi­care is billed $1,000 for each pa­tient visit, a strat­egy that does not de­pend on the spe­cific med­i­cal con­di­tion of the ben­e­fi­ciary,” the FBI agent wrote.

From 2011 to 2016, Rashid’s busi­ness billed Medi­care for $42 mil­lion worth of back in­jec­tions and was paid $14 mil­lion — tops among all med­i­cal prac­tices na­tion­wide, the FBI al­leges.

In all, the Medi­care scheme cheated Medi­care out of al­most $132 mil­lion, fed­eral prose­cu­tors say.

Rashid

Face­book

Prose­cu­tors say Mashiyat Rashid, right, spent hun­dreds of thou­sands to travel by jet and to build a house. His as­sets have been seized.

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