O'Keefe's Latest Sting Is A Fraud

James O'Keefe's latest “evidence” of “Medicaid fraud” not only fails to show any such fraud, it fully exposes O'Keefe as a dissembler who should not be treated as a legitimate news source.

According to O'Keefe, his latest video shows officials in Indiana “caught in [a] Medicaid fraud sting” involving a “wealthy Russian drug smuggler.”


But at no point in either of two visits documented by O'Keefe does the so-called undercover reporter identifying himself as “Sergei” claim to be a drug smuggler. Not once.

During the first visit, a man identifying himself as Sergei claims that he employs his father, who needs to apply for Medicaid benefits. “Sergei” claims to pay his father $200 per month and insinuates that his father might be a babysitter. He also claims to have “people who work for us,” “girls that work for us,” and “shipment under floorboard.”

“Sergei” never claims to be a drug smuggler.

During the second visit, the man who identifies himself as Sergei again claims to be inquiring about Medicaid benefits for his father. “Sergei” says that he and his brother give his father $200 each month “because he's our father,” that his father “works for me and my brother,” that his father is “not really” working anymore, and that his father might “sometime deliver.”

Again, the man calling himself Sergei never claims to be a drug smuggler.

Yet here is how O'Keefe presented his latest sting video:

The reporter indicates that he is a drug dealer who receives “shipment in floorboard.”

That's not true. It's demonstrably false simply by watching the video. And it's perfectly consistent with O'Keefe history of dishonesty.

Moreover, O'Keefe once again has failed to show any Medicaid fraud in his Medicaid fraud sting.

During the first visit, “Sergei” claims he is applying for Medicaid for his father. After “Sergei” asks about declaring his father's income and assets, a Medicaid worker makes clear that at this point, Medicaid officials only need to know an applicant's name, address, Social Security Number, and date of birth in order to begin the application process.

She also makes clear that Medicaid officials will eventually need to verify an applicant's income and assets:

Right at the moment, we're not looking at that. You're just doing the application right now for him, and that application has not been processed yet. So don't worry about none of that information yet.

Just fill the application out, and then we'll process it, and then he'll have an interview, and they'll need him to verify some information. But they'll send that out in the mail.

The Medicaid official explains that as his father's employer, “Sergei” would need to “give a statement saying he is working for you” and that his father “gets paid such and such.”

At this point, “Sergei” asks whether Medicaid officials “inspect our home,” making perfectly clear that the home he claims to own legally belongs to him and not his father - the fictional Medicaid applicant. “Sergei” again asks if Medicaid will inspect the home that he himself claims does not belong to his father.

The Medicaid worker effectively says that Medicaid officials do not inspect homes that are not the legal assets of Medicaid applicants.

No forms are filled out. No health services are delivered. Quite simply, no fraud is demonstrated.

In the second video, “Sergei” again claims to be applying for Medicaid for his father, identified here as “Viktor.” “Sergei” asks a Medicaid worker whether he will need to disclose assets that his father doesn't own - including a house that “Sergei” claims to own, cars that “Sergei” claims that he and his brother own, and watches.

Again “Sergei” is informed that Medicaid applicants are not responsible for assets that they don't own. He is also told:

You have to provide verification of income he gets. We have to count income for him. But if he doesn't have any bank accounts in his name, then no we don't count that as an asset for him.

Again, the visit showed no Medicaid fraud and no evidence of public employees knowingly helping drug smugglers engage in Medicaid fraud.

Instead of admitting his failure to uncover even a hint of Medicaid fraud, O'Keefe fixated on a portion of the video that he claimed shows a Medicaid official explaining how to transfer a home “from father to son, so that the father is eligible for Medicaid.”

The video shows no such thing.

In the relevant section, a Medicaid worker explained that even if the father owned the home, it could not be used to deny him Medicaid under Indiana law since it is his family home. She went on to explain:

Say the house was under his name, he went into a nursing home, and you and your brother live with him all his life, you would be able to quick claim [sic] it to you or your brother because you lived in the house with him, all his life. So it would be no problem.

It's important to note that asset transfers are not without restriction for purposes of long-term care asset testing. In this case, the explanation was purely hypothetical and in no way related to the fictional scenario presented by “Sergei.” Even in the made-up world presented in O'Keefe's home movie, there was no possibility of transferring property to the son - the son already claimed to be the owner of the house.

Medicaid fraud is a serious problem. In March, the Government Accountability Office estimated that Medicare and Medicaid made more than $70 billion in improper payments during the last fiscal year.

While media has a role bringing to light abuse in the system, activists like James O'Keefe simply add waste into the system as state officials divert limited public dollars to investigating his deceptive claims, which have proven once again to be fraudulent.