1 00:00:01,840 --> 00:00:04,340 This is a CNBC original. 2 00:00:08,480 --> 00:00:12,460 In this episode of American Greed. Dr. Stokes, your reaction tonight? 3 00:00:12,880 --> 00:00:14,480 Dr. Robert Stokes. 4 00:00:14,700 --> 00:00:15,840 People call them greedy. 5 00:00:16,420 --> 00:00:17,760 People call them arrogant. 6 00:00:18,040 --> 00:00:20,960 A dermatologist obsessed with the bottom line. 7 00:00:21,300 --> 00:00:24,520 I think he just was like trying to get every last penny. 8 00:00:24,740 --> 00:00:28,040 He steals patients' money and reuses medical supplies. 9 00:00:28,480 --> 00:00:30,060 Patients are put in danger. 10 00:00:30,620 --> 00:00:32,560 I feel like he physically attacked me. 11 00:00:33,080 --> 00:00:36,860 And now you're telling me that there's a possibility that I've been exposed to 12 00:00:36,860 --> 00:00:41,260 hepatitis? For patients of Dr. Robert Stokes, what some have called the dirty 13 00:00:41,260 --> 00:00:42,680 doctor. All so Dr. 14 00:00:42,940 --> 00:00:44,780 Stokes can make more money. 15 00:00:45,100 --> 00:00:46,300 You're nothing but a paycheck. 16 00:00:47,080 --> 00:00:52,940 And later, Darlene Wooten and Charlene Corley, twin sisters, 17 00:00:53,180 --> 00:00:56,060 amassing a fortune in defense contracts. 18 00:00:56,780 --> 00:00:58,620 There was no reason to doubt. 19 00:00:59,310 --> 00:01:02,430 that they had succeeded in living the American dream. 20 00:01:02,870 --> 00:01:06,150 But behind the scenes, things are not as they seem. 21 00:01:06,570 --> 00:01:10,170 They were stealing this money from our Department of Defense and from our 22 00:01:10,170 --> 00:01:11,170 government. 23 00:01:11,190 --> 00:01:13,730 The money is taxpayer money. It's our money. 24 00:01:14,450 --> 00:01:18,390 It's a story that will ultimately end in disgrace and death. 25 00:01:18,650 --> 00:01:22,090 We're all going to have to answer to what we've done, and I'm sure they've 26 00:01:22,090 --> 00:01:23,090 lot to answer to. 27 00:01:39,400 --> 00:01:46,060 In Grand Rapids, Michigan, along a busy street, there's an ordinary 28 00:01:46,060 --> 00:01:50,520 office building housing a dermatologist, Dr. Robert Stokes. 29 00:01:50,740 --> 00:01:56,260 Few people have any reason to suspect that behind these walls, the good doctor 30 00:01:56,260 --> 00:02:01,940 is perpetrating a massive fraud and that he's doing it literally on the backs of 31 00:02:01,940 --> 00:02:02,940 his patients. 32 00:02:04,840 --> 00:02:07,820 In hindsight, you have all kinds of... 33 00:02:08,950 --> 00:02:12,770 Things that, oh, that was a red flag. Why didn't I notice that? 34 00:02:14,190 --> 00:02:20,730 In June 2006, Melissa Wedberg starts going to Dr. Robert Stokes for adult 35 00:02:21,070 --> 00:02:25,610 One night, while getting ready for bed, she sees something new on her skin. 36 00:02:26,110 --> 00:02:31,390 And I noticed a small mole on my chest. And I'd never seen it before. It was 37 00:02:31,390 --> 00:02:34,090 small like a freckle. And I thought, oh, well, since I'm going to the 38 00:02:34,090 --> 00:02:35,890 dermatologist tomorrow, I'll ask about that. 39 00:02:36,430 --> 00:02:39,590 The next morning, Dr. Stokes takes a look at the mold. 40 00:02:39,950 --> 00:02:43,810 And he said, that's got to come off. That's got to come off right away. 41 00:02:44,310 --> 00:02:46,010 The tone of his voice was alarming. 42 00:02:46,570 --> 00:02:50,610 Dr. Stokes cuts off the mold and sends it out for biopsy. 43 00:02:50,910 --> 00:02:53,170 One week later, the results are in. 44 00:02:54,110 --> 00:02:55,890 Melissa has skin cancer. 45 00:02:56,830 --> 00:02:59,990 Oh, I was 26 years old. I was completely shocked. 46 00:03:00,310 --> 00:03:03,730 I mean, I was freaked out. I thought, this is crazy. What do you mean, cancer? 47 00:03:03,970 --> 00:03:05,370 Skin cancer? I mean... 48 00:03:05,980 --> 00:03:06,980 I'm too young. 49 00:03:07,200 --> 00:03:11,940 Dr. Stokes tells Melissa she needs to come back for more extensive surgery to 50 00:03:11,940 --> 00:03:13,500 make sure the cancer is gone. 51 00:03:13,960 --> 00:03:16,340 One week later, she's back in his office. 52 00:03:16,800 --> 00:03:20,940 He came in, and he was really abrupt. 53 00:03:21,720 --> 00:03:26,760 He just came in, he started cutting, but it was just like, okay, I'm here, let's 54 00:03:26,760 --> 00:03:27,760 get this procedure done. 55 00:03:28,580 --> 00:03:31,340 Melissa describes the procedure as violent. 56 00:03:31,600 --> 00:03:34,760 At times during the surgery, she's brought to tears. 57 00:03:35,450 --> 00:03:38,250 Fortunately, she has a friend at her side to soothe her. 58 00:03:39,650 --> 00:03:42,470 My girlfriend was at the end of the table, and she was kind of rubbing my 59 00:03:42,550 --> 00:03:44,450 just trying to keep me calm. 60 00:03:44,910 --> 00:03:50,370 And it was summer in Michigan, so I had flip -flops on, and I had this little 61 00:03:50,370 --> 00:03:52,990 freckle on my third toe. 62 00:03:53,230 --> 00:03:59,310 And Nicole says, uh -oh, we better have this taken off, too. She's joking, 63 00:03:59,470 --> 00:04:02,870 trying to lighten the mood. And then the doctor says... 64 00:04:03,400 --> 00:04:06,800 Oh, that's got to come off. Schedule her to have that off and schedule a 65 00:04:06,800 --> 00:04:09,860 subcutaneous exam. We need to examine your whole body. 66 00:04:10,340 --> 00:04:14,780 So I'm like, you've got to be kidding me. I mean, that's a freckle. 67 00:04:15,120 --> 00:04:20,640 After about 20 minutes, the surgery is complete, and Dr. Stokes begins to sew 68 00:04:20,640 --> 00:04:21,640 the wound. 69 00:04:21,959 --> 00:04:24,980 I mean, I felt like I was being yanked on the table. 70 00:04:25,960 --> 00:04:30,380 That was the moment when I just knew something was off. 71 00:04:30,680 --> 00:04:33,060 So he quick stitched me up, and he left the room. 72 00:04:33,680 --> 00:04:38,220 And we paid the copay, and we left, and we walked out of the office. 73 00:04:38,760 --> 00:04:43,760 I just, I didn't feel right. I felt uneasy. I just had a bad taste in my 74 00:04:46,600 --> 00:04:52,360 In pain, bleeding, and in need of company, Melissa asks her friend to join 75 00:04:52,360 --> 00:04:53,360 for lunch. 76 00:04:53,420 --> 00:04:56,200 At a restaurant, her friend picks up a newspaper. 77 00:04:57,610 --> 00:05:01,250 She gets this, like, look of panic, and she walks over to me with the newspaper 78 00:05:01,250 --> 00:05:02,189 in her hand. 79 00:05:02,190 --> 00:05:06,290 And I look at the newspaper, and the front page of the Grand Rapids Press 80 00:05:06,290 --> 00:05:10,790 that day says, Dermatologist Indicted on Healthcare Fraud. 81 00:05:11,750 --> 00:05:13,130 And it was him. 82 00:05:13,770 --> 00:05:18,850 And I thought, you're kidding. I mean, I'm standing here with an open wound on 83 00:05:18,850 --> 00:05:19,850 my chest. 84 00:05:21,550 --> 00:05:25,730 This doctor's on the front page of the Grand Rapids Press for healthcare fraud? 85 00:05:26,570 --> 00:05:28,710 You were indicted in federal court. 86 00:05:29,130 --> 00:05:34,630 And today, at 9 a .m., you're operating on me with a scalpel. 87 00:05:36,090 --> 00:05:38,830 The situation demands a second opinion. 88 00:05:39,090 --> 00:05:44,530 And just as Melissa fears, her new dermatologist says she never had cancer. 89 00:05:44,730 --> 00:05:48,090 And the surgery performed by Dr. Stokes was unnecessary. 90 00:05:49,990 --> 00:05:54,330 Melissa Wedberg is one of the last among hundreds of victims of Dr. Robert 91 00:05:54,330 --> 00:05:55,330 Stokes. 92 00:05:55,630 --> 00:06:01,210 It's a story of botched surgeries, billing fraud, and, his patients say, 93 00:06:01,330 --> 00:06:04,010 treating them like little more than a paycheck. 94 00:06:05,490 --> 00:06:11,210 It was like I never existed. I was just simply something that was there like a 95 00:06:11,210 --> 00:06:13,030 slab of meat to have a chunk taken off. 96 00:06:13,230 --> 00:06:17,150 I went in there, in and out the door like a piece of lumber. 97 00:06:19,390 --> 00:06:23,970 Greg Anderson is in charge of fraud investigations for Blue Cross and Blue 98 00:06:23,970 --> 00:06:24,970 Shield of Michigan. 99 00:06:25,600 --> 00:06:30,900 In 2001, the company's fraud hotline begins receiving tips from patients of 100 00:06:31,080 --> 00:06:32,080 Stokes. 101 00:06:32,320 --> 00:06:34,560 Patients have examined their benefit statements. 102 00:06:34,940 --> 00:06:35,960 They believe Dr. 103 00:06:36,220 --> 00:06:40,820 Stokes has charged Blue Cross Blue Shield for services the doctor did not 104 00:06:40,820 --> 00:06:41,820 perform. 105 00:06:42,060 --> 00:06:49,000 Dr. Stokes certainly isn't the largest dollar volume fraud case we've had, 106 00:06:49,120 --> 00:06:52,960 but in my experience, it's probably the most egregious disregard. 107 00:06:53,720 --> 00:06:55,240 for the safety of patients. 108 00:06:55,960 --> 00:07:01,420 As Anderson will later learn, Dr. Stokes is performing unnecessary surgeries. 109 00:07:02,920 --> 00:07:07,220 Bob May starts seeing Dr. Stokes for skin cancer in 2001. 110 00:07:08,120 --> 00:07:13,000 It started off monthly, and then biweekly, and then it was weekly. 111 00:07:13,620 --> 00:07:19,400 May is surprised by how often he's diagnosed with skin cancer, but he has 112 00:07:19,400 --> 00:07:23,040 in the doctor. His life, it seems, is in Stokes' hands. 113 00:07:24,540 --> 00:07:29,340 You just put your trust in them and you don't know what you've got because 114 00:07:29,340 --> 00:07:32,940 you're not, at least in my case, I guess I wasn't smart enough to go get another 115 00:07:32,940 --> 00:07:33,940 opinion. 116 00:07:34,560 --> 00:07:35,900 Each visit, Dr. 117 00:07:36,140 --> 00:07:39,580 Stokes cuts out lesions that he says are cancerous. 118 00:07:39,800 --> 00:07:43,540 My wife and I tried to figure out, we are sure that I've probably had a couple 119 00:07:43,540 --> 00:07:45,240 thousand done. 120 00:07:45,900 --> 00:07:50,800 Every one of those spots is something that's been done and then redone to the 121 00:07:50,800 --> 00:07:55,020 point that my skin now is to the point there's just no elastic to it anymore 122 00:07:55,020 --> 00:08:00,300 that I have to constantly use some kind of a Medicaid cream to keep the skin 123 00:08:00,300 --> 00:08:02,600 because he cut so much of it away. 124 00:08:03,940 --> 00:08:08,900 Stokes' patients believe he's performing unnecessary procedures, billing for 125 00:08:08,900 --> 00:08:10,380 surgeries he didn't perform. 126 00:08:10,910 --> 00:08:15,630 and also double -dipping, billing insurance companies twice for one 127 00:08:15,990 --> 00:08:18,150 It affords him a luxurious life. 128 00:08:19,350 --> 00:08:23,710 He lives in a five -bedroom, eight -bath mansion on the shores of Reed's Lake, 129 00:08:23,950 --> 00:08:26,510 one of Grand Rapids' most exclusive neighborhoods. 130 00:08:27,390 --> 00:08:33,809 The house has an indoor pool, a solarium with glass imported from England, and a 131 00:08:33,809 --> 00:08:34,809 photography studio. 132 00:08:35,470 --> 00:08:41,010 It was once on the market for $7 .7 million, the highest asking price in the 133 00:08:41,010 --> 00:08:42,030 history of the county. 134 00:08:42,390 --> 00:08:48,070 I think this is one of the biggest examples of pure greed to put money in 135 00:08:48,070 --> 00:08:53,550 pocket. When American greed returns, this isn't just a case of stealing from 136 00:08:53,550 --> 00:08:54,550 insurance companies. 137 00:08:54,850 --> 00:09:00,830 Greed causes Stokes to cut corners and reuse syringes and sutures, putting 138 00:09:00,830 --> 00:09:02,010 in jeopardy. 139 00:09:02,350 --> 00:09:05,790 And now you're telling me that there's a possibility that I've been exposed to 140 00:09:05,790 --> 00:09:06,790 hepatitis? 141 00:09:07,490 --> 00:09:09,930 In my mind, he's sick. 142 00:09:21,810 --> 00:09:27,510 In Grand Rapids, Michigan, Dr. Robert Stokes enjoys the good life in his Tudor 143 00:09:27,510 --> 00:09:28,510 -style mansion. 144 00:09:28,710 --> 00:09:31,170 It sits atop a hill overlooking a lake. 145 00:09:31,950 --> 00:09:37,170 Inside, there's a pool, a billiard room, and a kitchen with a custom -made 146 00:09:37,170 --> 00:09:38,850 pastry oven from Germany. 147 00:09:39,750 --> 00:09:45,030 This lifestyle is bankrolled by an extremely lucrative dermatology 148 00:09:45,390 --> 00:09:46,390 But Dr. 149 00:09:46,410 --> 00:09:48,630 Stokes' business is steeped in fraud. 150 00:09:49,170 --> 00:09:53,110 He builds insurance companies for operations that he never performed. 151 00:09:53,530 --> 00:09:57,430 And he puts his patients through the pain of unnecessary procedures. 152 00:09:57,990 --> 00:10:01,710 For patients of Dr. Robert Stokes, what some have called the dirty doctor. Dr. 153 00:10:01,830 --> 00:10:03,590 Stokes faces a mountain of charges. 154 00:10:03,970 --> 00:10:08,550 Additional complaints filed with the state against Stokes. All because he 155 00:10:08,550 --> 00:10:12,830 medical equipment that was supposed to be disposed of. Brian Sterling covers 156 00:10:12,830 --> 00:10:15,610 story for NBC affiliate Wood TV 8. 157 00:10:16,250 --> 00:10:22,070 He obviously had a scheme going in which he was using fear as a manipulative 158 00:10:22,070 --> 00:10:25,510 tool to get these people to spend more money with him, to spend more time. Yet 159 00:10:25,510 --> 00:10:29,750 another procedure, another test, over and over and over again, all the time, 160 00:10:29,750 --> 00:10:31,750 patient's wondering, what's wrong with me? 161 00:10:32,650 --> 00:10:38,110 To top it all off, many patients described Stokes' bedside manner as 162 00:10:38,950 --> 00:10:43,110 He was acting very agitated. He started swearing, and I asked him, you know, 163 00:10:43,130 --> 00:10:44,210 what the problem was. 164 00:10:46,600 --> 00:10:52,360 In March 2006, Deborah Janney asked Dr. Stokes to remove a benign cyst from her 165 00:10:52,360 --> 00:10:55,920 wrist. The operation is supposed to take an hour, tops. 166 00:10:56,380 --> 00:10:58,940 But midway into the procedure, Dr. 167 00:10:59,200 --> 00:11:00,400 Stokes gets surly. 168 00:11:00,980 --> 00:11:07,740 Oh, at one point he's like, God, and then he said hell one time. He's barking 169 00:11:07,740 --> 00:11:08,740 at his nurses. 170 00:11:09,060 --> 00:11:13,180 The supposedly one -hour operation takes three hours. 171 00:11:13,920 --> 00:11:17,520 I kept asking, well, what's the problem? Why are you having so much difficulty? 172 00:11:17,880 --> 00:11:18,779 Why are you swearing? 173 00:11:18,780 --> 00:11:20,000 Why are you so angry? 174 00:11:20,640 --> 00:11:24,700 Later that night, Jannie says her wound is painful and looks infected. 175 00:11:25,300 --> 00:11:28,880 The bruising had just kept going up higher and higher. 176 00:11:29,200 --> 00:11:32,740 It's bad enough that her husband snaps these pictures. 177 00:11:33,500 --> 00:11:38,680 The way it was stitched up, it looked like a little kid had been knitting with 178 00:11:38,680 --> 00:11:39,940 it or sewing with it. 179 00:11:40,340 --> 00:11:42,740 The infection gets worse, Jannie says. 180 00:11:43,340 --> 00:11:46,200 And Dr. Stokes prescribes an antibiotic regimen. 181 00:11:46,440 --> 00:11:48,840 But here the doctor pulls a dirty trick. 182 00:11:49,080 --> 00:11:53,400 He bills both Deborah and her insurance carrier as though the infection were 183 00:11:53,400 --> 00:11:58,460 caused by something external to the surgery. When in fact, Jannie believes 184 00:11:58,460 --> 00:12:00,400 infection was caused by the surgery itself. 185 00:12:01,320 --> 00:12:06,120 She is outraged that Stokes is charging her for a condition that he caused. 186 00:12:07,480 --> 00:12:08,800 Very, very angry. 187 00:12:09,060 --> 00:12:10,060 Very angry. 188 00:12:10,780 --> 00:12:13,060 Deborah confronts the doctor at his office. 189 00:12:13,540 --> 00:12:16,480 Both of our voices were very loud. 190 00:12:16,880 --> 00:12:21,440 And he just kept saying that you're going to have to pay the money. It's an 191 00:12:21,440 --> 00:12:25,900 infection now. I kept saying, but the infection was due to your surgery. 192 00:12:26,400 --> 00:12:33,400 And he would not come to terms with us. I could not believe he was 193 00:12:33,400 --> 00:12:34,880 getting by with us. 194 00:12:35,380 --> 00:12:37,320 Horror stories abound. 195 00:12:37,910 --> 00:12:42,510 Richard Ganoudis says Stokes has him come to the office multiple times for 196 00:12:42,510 --> 00:12:46,150 procedures that his new doctor would have taken care of in one visit. 197 00:12:47,630 --> 00:12:51,630 This spot right here is the one that he said would never heal. 198 00:12:52,030 --> 00:12:54,610 There's a scar here from one of them. 199 00:12:54,870 --> 00:12:59,810 For example, if four lesions are believed to be cancerous, most 200 00:12:59,810 --> 00:13:02,090 take out all four in one visit. 201 00:13:02,390 --> 00:13:04,570 You see the length of that one and that one there. 202 00:13:05,120 --> 00:13:09,740 That's considered best practice, even though the doctor earns marginally less. 203 00:13:10,280 --> 00:13:14,340 You would be paid a full removal of the first lesion, and then you would be paid 204 00:13:14,340 --> 00:13:19,920 a lower amount for removing the second, third, and fourth lesion at that time. 205 00:13:20,280 --> 00:13:24,740 Dr. Stokes, on the other hand, strings the patient out over four separate 206 00:13:24,740 --> 00:13:27,240 visits, maximizing his profits. 207 00:13:28,100 --> 00:13:32,820 By bringing the people back, each time he was able to bill for the full amount 208 00:13:32,820 --> 00:13:33,820 of the surgery. 209 00:13:34,380 --> 00:13:37,300 totally disregarding the safety of the patient, the inconvenience to the 210 00:13:37,300 --> 00:13:41,000 patient, the risk of infection and everything else to that patient, just 211 00:13:41,000 --> 00:13:43,000 sake of putting money in his pocket. 212 00:13:43,420 --> 00:13:49,320 By 2001, Greg Anderson with Blue Cross Blue Shield of Michigan joins forces 213 00:13:49,320 --> 00:13:51,500 the FBI and the U .S. Attorney's Office. 214 00:13:52,000 --> 00:13:56,920 They interview dozens of patients and ultimately get a search warrant to seize 215 00:13:56,920 --> 00:13:58,980 records at Dr. Stokes' office. 216 00:13:59,620 --> 00:14:01,020 We were able to... 217 00:14:01,520 --> 00:14:07,800 pretty easily established that at least 40 % of his practice was fraudulent in 218 00:14:07,800 --> 00:14:10,620 nature. And it certainly could have been greater. 219 00:14:11,000 --> 00:14:16,920 The investigation shows that Dr. Stokes stole at least $1 .9 million from 220 00:14:16,920 --> 00:14:19,360 insurance companies, Medicare, and patients. 221 00:14:20,100 --> 00:14:26,980 On August 28, 2006, Stokes is arraigned in federal court on 72 felony counts of 222 00:14:26,980 --> 00:14:27,980 health care fraud. 223 00:14:28,120 --> 00:14:29,620 The next morning... 224 00:14:29,840 --> 00:14:31,700 He operates on Melissa Wedberg. 225 00:14:32,920 --> 00:14:39,240 I just thought, wait a minute, why isn't he in jail pending his trial? Why isn't 226 00:14:39,240 --> 00:14:45,820 he, his medical license on hold pending his trial? I couldn't understand why no 227 00:14:45,820 --> 00:14:47,700 one had stabbed him earlier. 228 00:14:47,960 --> 00:14:51,180 And I asked that question to the prosecutor probably a hundred times. 229 00:14:52,280 --> 00:14:56,720 But then the FBI makes a discovery that will shut Stokes down for good. 230 00:14:57,829 --> 00:15:01,570 Investigators obtain a videotape Dr. Stokes made of some of his operations, 231 00:15:02,070 --> 00:15:03,710 hoping to exonerate himself. 232 00:15:04,110 --> 00:15:05,630 It does just the opposite. 233 00:15:06,490 --> 00:15:11,110 On the tape, it appears Stokes is reusing sutures. 234 00:15:11,490 --> 00:15:15,510 Sutures are packaged with about 18 inches of thread attached to the needle. 235 00:15:16,150 --> 00:15:22,030 Dr. Stokes, it appears, sews up one patient. He then cuts off the unused 236 00:15:22,030 --> 00:15:25,230 of the thread, the part that has already passed through skin. 237 00:15:26,290 --> 00:15:28,870 and reused it on another patient. 238 00:15:29,990 --> 00:15:31,310 It just made me sick. 239 00:15:31,750 --> 00:15:37,470 Just to think, oh, my goodness. Then I flashback and think the times I did have 240 00:15:37,470 --> 00:15:42,650 to have a few sutures because he had done one over my eye and done it in my 241 00:15:42,730 --> 00:15:45,110 I said, my goodness, what have I gotten? 242 00:15:45,910 --> 00:15:52,630 Sutures are like the most inexpensive medical equipment you can come by. I 243 00:15:52,630 --> 00:15:57,720 mean... So this made me think, if you're reusing sutures, what else are you 244 00:15:57,720 --> 00:16:03,460 reusing? At the local health department, Director Kathy Rayefsky believes the 245 00:16:03,460 --> 00:16:07,920 reuse of sutures and syringes puts patients at risk of life -threatening 246 00:16:07,920 --> 00:16:12,740 illnesses, including hepatitis B, hepatitis C, and HIV. 247 00:16:13,940 --> 00:16:19,300 The risk of transmission we felt was very low, but it wasn't zero. 248 00:16:20,250 --> 00:16:26,550 And frankly, if you're the one person who is not the zero, it's pretty serious 249 00:16:26,550 --> 00:16:29,690 for you. So it was important that we notify people. 250 00:16:30,870 --> 00:16:37,270 Letters go out to 13 ,000 patients, warning them to get tested for hepatitis 251 00:16:37,270 --> 00:16:42,470 HIV. The local media is put on alert. 252 00:16:44,620 --> 00:16:48,160 As the health department opens their emergency call -in center for concerned 253 00:16:48,160 --> 00:16:51,920 patients... Some people are, to be honest, hysterical. 254 00:16:52,540 --> 00:16:56,120 There were people that were very scared about the unknown. 255 00:16:56,320 --> 00:16:58,980 They didn't know what they had, if they had anything at all. 256 00:16:59,360 --> 00:17:04,260 You really stop and take a minute to think about it, and it's like, this 257 00:17:04,260 --> 00:17:08,920 really happen. I could get aids from this, from what this guy did. 258 00:17:09,240 --> 00:17:11,920 It had to be just so traumatic to folks. 259 00:17:12,589 --> 00:17:18,030 to realize that they could have a life -threatening disease put into them by 260 00:17:18,030 --> 00:17:20,490 someone that was just purely out for money. 261 00:17:22,089 --> 00:17:23,089 Unbelievable. 262 00:17:23,869 --> 00:17:29,170 When American greed returns, thousands of patients undergo frightening tests. 263 00:17:30,330 --> 00:17:31,990 But Dr. 264 00:17:32,190 --> 00:17:35,210 Stokes wants to clear his name and get back in business. 265 00:17:35,750 --> 00:17:37,010 Will he be stopped? 266 00:17:37,410 --> 00:17:40,410 People like that are monsters. They need to be locked up. 267 00:17:52,720 --> 00:17:59,460 In April 2007, Dr. Robert Stokes, a dermatologist, goes on trial in Grand 268 00:17:59,460 --> 00:18:00,460 Rapids, Michigan. 269 00:18:01,200 --> 00:18:06,820 Stokes is accused of 37 criminal counts of health care fraud, and his patients 270 00:18:06,820 --> 00:18:10,040 believe he's put them through unnecessary operations. 271 00:18:10,820 --> 00:18:16,220 He was trying to glean as much money as he could from the insurance companies, 272 00:18:16,420 --> 00:18:20,320 from the patients, from saving money on spending on his medical supplies. 273 00:18:20,860 --> 00:18:22,280 Right on down the line. 274 00:18:22,540 --> 00:18:27,460 The crimes that outrage the community the most are the breaches of public 275 00:18:27,780 --> 00:18:33,040 The government believes Stokes reused medical equipment, including sutures and 276 00:18:33,040 --> 00:18:37,840 syringes. For a guy that was making so much money and seemed to be so 277 00:18:37,840 --> 00:18:43,560 successful, why was he acting in a manner that suggested that he was so 278 00:18:44,880 --> 00:18:49,560 But the criminal trial of Robert Stokes will focus only on health care fraud. 279 00:18:50,110 --> 00:18:52,250 which disappoints some of Stokes' victims. 280 00:18:53,330 --> 00:18:56,930 And I'm sitting in that trial knowing that they're going after the fraud. 281 00:18:57,470 --> 00:19:00,910 And I'm thinking, but what about all the other stuff, you know? And 282 00:19:00,910 --> 00:19:06,610 unfortunately, there wasn't laws against the other stuff. There's no laws saying 283 00:19:06,610 --> 00:19:12,010 you can't use dirty sutures or you can't reuse disposable sutures. 284 00:19:12,730 --> 00:19:17,130 I don't know if that's like the caution hot on the McDonald's. 285 00:19:17,420 --> 00:19:23,440 that it's kind of obvious, so there's no law for it. But, like, there should be 286 00:19:23,440 --> 00:19:28,320 a law, because obviously not everybody follows, you know, standard procedure. 287 00:19:29,560 --> 00:19:35,000 Thousands of former patients undergo blood tests for hepatitis B, C, and HIV. 288 00:19:35,780 --> 00:19:39,480 Six patients test positive for hepatitis C. 289 00:19:39,980 --> 00:19:43,140 I believe that these six individuals did not know. 290 00:19:45,640 --> 00:19:48,480 It's impossible, however, to tell whether Dr. 291 00:19:48,680 --> 00:19:51,980 Stokes infected them or they got the disease from another source. 292 00:19:52,320 --> 00:19:56,720 All of the Stokes patients who speak with American Greed get a clean bill of 293 00:19:56,720 --> 00:19:59,960 health. The results, thank God, were negative. 294 00:20:01,240 --> 00:20:07,800 On April 26, 2007, the jury in the criminal trial of Robert Stokes reaches 295 00:20:07,800 --> 00:20:08,800 verdict. 296 00:20:09,500 --> 00:20:12,660 Guilty on 31 counts of health care fraud. 297 00:20:14,060 --> 00:20:19,360 Until he's sentenced, Stokes is free to return to his mansion on the hill. 298 00:20:21,360 --> 00:20:25,240 But the house is empty, and his marriage is ending. 299 00:20:26,020 --> 00:20:31,540 Here, in his lonely mansion, Stokes gets to work on what may be his last car, 300 00:20:31,860 --> 00:20:36,220 trying to collect every last penny from former patients. 301 00:20:37,080 --> 00:20:39,780 Then I got a letter, actually from him. 302 00:20:40,560 --> 00:20:46,080 Please be advised you have a balance due to Robert W. Stokes, DO, PC, of $135. 303 00:20:46,500 --> 00:20:52,160 At the bottom of the letter, it refers to a collection, you know, Stokes 304 00:20:52,160 --> 00:20:53,160 Collection Department. 305 00:20:53,620 --> 00:20:55,300 And the address was his home. 306 00:20:56,120 --> 00:21:02,560 In 2002, Dr. Stokes performs a procedure on Larry Broomberg that another doctor 307 00:21:02,560 --> 00:21:04,540 later says should never have been done. 308 00:21:04,880 --> 00:21:08,740 Now, five years later, Stokes is still trying to collect. 309 00:21:09,780 --> 00:21:12,640 Respectfully, Robert Stokes, final collections department. 310 00:21:13,080 --> 00:21:16,520 That really amused me. He's not only got a collections department, he has a 311 00:21:16,520 --> 00:21:17,600 final collections department. 312 00:21:18,260 --> 00:21:20,360 So I wrote here, you've got to be kidding. 313 00:21:20,760 --> 00:21:25,360 You owe me $215 for tests I had to undertake because of your procedures. 314 00:21:25,920 --> 00:21:31,960 If my credit should suffer any negative result from your mindless attempt to 315 00:21:31,960 --> 00:21:37,400 collect fees for botched services, I shall sue both your agency and D .O. 316 00:21:37,400 --> 00:21:38,580 in or out of prison. 317 00:21:39,150 --> 00:21:43,170 Many other patients received similar collection letters from the Stokes 318 00:21:43,170 --> 00:21:46,070 Collection Agency, including Melissa Wedberg. 319 00:21:46,830 --> 00:21:51,050 Stokes left Melissa with a three -inch scar from an operation that her new 320 00:21:51,050 --> 00:21:53,190 doctor believes should never have been performed. 321 00:21:53,510 --> 00:21:58,770 And now he's trying to ding her for $1 ,392. 322 00:21:59,650 --> 00:22:01,890 I mean, what else do you want from me? 323 00:22:03,200 --> 00:22:07,980 You did every kind of harm I can imagine. You harmed me physically, 324 00:22:08,340 --> 00:22:09,840 mentally, and financially. 325 00:22:10,100 --> 00:22:11,480 Now you want to send me to collection. 326 00:22:11,780 --> 00:22:12,780 I mean, really? 327 00:22:13,700 --> 00:22:17,560 Needless to say, Larry and Melissa refused to pay the bills. 328 00:22:18,600 --> 00:22:23,720 On December 27, 2007, Robert Stokes goes up for sentencing. 329 00:22:24,280 --> 00:22:27,360 Victims have a chance to speak their minds to Dr. 330 00:22:27,560 --> 00:22:28,560 Stokes directly. 331 00:22:28,940 --> 00:22:33,520 He took our respect away. He took our ability to feel good about ourselves. 332 00:22:33,920 --> 00:22:39,820 I think for a long time, it scarred me to the point of, oh, I don't look as 333 00:22:39,820 --> 00:22:40,820 as I used to look. 334 00:22:41,100 --> 00:22:45,820 And this man made money and made me look this way. 335 00:22:47,080 --> 00:22:51,860 When Melissa testifies at the sentencing hearing, Stokes' defense attorney shows 336 00:22:51,860 --> 00:22:55,080 the jury a letter Melissa's father has written to Stokes. 337 00:22:55,660 --> 00:23:00,160 In the last line, it reads, my hope for you is that you rot in hell. 338 00:23:00,840 --> 00:23:05,020 Melissa believes the defense attorney is trying to suggest she has a personal 339 00:23:05,020 --> 00:23:06,680 vendetta against Stokes. 340 00:23:07,960 --> 00:23:11,160 He said, how do you feel about that? 341 00:23:11,480 --> 00:23:13,060 And I said, I hope he rots in hell. 342 00:23:13,820 --> 00:23:17,560 And I think they thought that I would say, well, you know, I don't hate him. I 343 00:23:17,560 --> 00:23:19,440 don't. But I did. 344 00:23:19,820 --> 00:23:20,820 And I do. 345 00:23:21,890 --> 00:23:26,070 Robert Stokes is sentenced to ten and a half years in federal prison. 346 00:23:26,790 --> 00:23:31,810 The sentence is actually below the federal guidelines of 12 to 15 years. 347 00:23:32,950 --> 00:23:38,010 The prosecutors were looking for even more time in prison for just breaching 348 00:23:38,010 --> 00:23:41,490 public trust the way he did. The judge didn't see it that way and sentenced 349 00:23:41,490 --> 00:23:45,210 Stokes to just ten and a half years. So I think there was a little frustration 350 00:23:45,210 --> 00:23:48,870 on behalf of some of the patients who felt that he deserved a lot more. 351 00:23:50,440 --> 00:23:55,980 I would have liked to have been much more, but being at his age, I thought we 352 00:23:55,980 --> 00:23:56,980 stopped him. 353 00:23:57,200 --> 00:23:58,940 They took away what he had. 354 00:23:59,780 --> 00:24:01,880 So he's going to pay the price now. 355 00:24:02,200 --> 00:24:06,920 In March 2010, in response to the Stokes case, Michigan Governor Jennifer 356 00:24:06,920 --> 00:24:11,740 Granholm signs a law prohibiting the reuse of single -use medical devices. 357 00:24:12,540 --> 00:24:17,560 Next, two sisters steal $20 million of your money. 358 00:24:32,200 --> 00:24:33,860 Lexington, South Carolina. 359 00:24:34,100 --> 00:24:38,740 It's a place where traditions and philosophies have lasted for 360 00:24:39,500 --> 00:24:46,480 Lexington County is a small county, population -wise, but we're in a 361 00:24:46,480 --> 00:24:47,480 county. 362 00:24:48,080 --> 00:24:51,660 Churches and schools are the center of the community. 363 00:24:52,880 --> 00:24:54,600 It's a law -abiding county. 364 00:24:56,590 --> 00:25:02,310 It is into this tradition that in 1960, twin sisters Darlene and Charlene Shuler 365 00:25:02,310 --> 00:25:07,430 are born, where they would marry and raise families, and where they would 366 00:25:07,430 --> 00:25:12,150 a business, like many who came before them. But it's a tradition they will 367 00:25:12,150 --> 00:25:13,370 ultimately betray. 368 00:25:15,130 --> 00:25:17,890 Their early years are unremarkable. 369 00:25:18,830 --> 00:25:24,010 Like many of their peers, they graduate from local airport high school and move 370 00:25:24,010 --> 00:25:25,710 on to nearby Clemson University, 371 00:25:26,440 --> 00:25:27,860 Before joining the workforce. 372 00:25:28,560 --> 00:25:33,280 You know, Charlene and Darlene did not have a history of being a savvy business 373 00:25:33,280 --> 00:25:34,280 people. 374 00:25:34,420 --> 00:25:37,160 Charlene worked at the South Carolina Budget and Control Board. 375 00:25:37,640 --> 00:25:40,100 She had a very limited work experience. 376 00:25:41,220 --> 00:25:43,180 Darlene was a school teacher. 377 00:25:44,840 --> 00:25:46,900 But they have bigger things in mind. 378 00:25:47,200 --> 00:25:50,060 In 1991, they decide to join forces. 379 00:25:50,820 --> 00:25:54,940 Charlene and Darlene form a business called C andD Distributors. 380 00:25:55,480 --> 00:26:00,460 The company sells small hardware components, bolts, washers, plumbing 381 00:26:00,820 --> 00:26:04,240 In the beginning, it's a modest operation at best. 382 00:26:04,640 --> 00:26:06,980 It was not a significant business at all. 383 00:26:07,480 --> 00:26:13,100 And then it seemed that they learned of how a mom -and -pop or a sister -and 384 00:26:13,100 --> 00:26:16,960 -sister business could become defense contractors. 385 00:26:18,860 --> 00:26:20,660 That's exactly what they do. 386 00:26:21,130 --> 00:26:25,110 In 1993, they began distributing hardware items to the military. 387 00:26:26,310 --> 00:26:30,950 But even with the government contracts, the business essentially treads water 388 00:26:30,950 --> 00:26:31,950 for years. 389 00:26:32,430 --> 00:26:39,230 In the black, I guess somebody would say, profitable but not, you know, used 390 00:26:39,230 --> 00:26:41,190 Honda profitable, not new Mercedes profitable. 391 00:26:41,770 --> 00:26:44,150 These were very low -dollar items. 392 00:26:44,650 --> 00:26:48,650 They were hardware items, you know, nuts, bolts, screws, light bulbs. 393 00:26:49,690 --> 00:26:55,250 Typically not the things dreams are made of. Until July 2000, when a small 394 00:26:55,250 --> 00:26:57,510 accounting error changes everything. 395 00:26:58,630 --> 00:27:02,890 It looked like they had made a mistake on one of their invoices at some point. 396 00:27:03,310 --> 00:27:08,390 And that the invoice number had been plugged into the block for shipping 397 00:27:08,810 --> 00:27:10,170 And that had been paid. 398 00:27:11,110 --> 00:27:16,530 A simple mistake by the twins and $5 ,000 lands right on their doorstep. 399 00:27:17,280 --> 00:27:21,480 The sisters pay the money back, but the temptation for these church -going women 400 00:27:21,480 --> 00:27:23,160 is too much to resist. 401 00:27:24,280 --> 00:27:29,620 You never know what goes through somebody's mind, but for some reason, 402 00:27:29,620 --> 00:27:31,720 made the decision to try to do it on purpose. 403 00:27:32,560 --> 00:27:33,560 It works. 404 00:27:33,800 --> 00:27:38,060 Without knowing how or why, the sisters have discovered a loophole in the 405 00:27:38,060 --> 00:27:40,380 Department of Defense's automated payment system. 406 00:27:41,360 --> 00:27:44,980 It seems they can charge almost any price for shipping. 407 00:27:45,340 --> 00:27:47,460 and the Department of Defense will pay it. 408 00:27:47,780 --> 00:27:52,380 All of the bids were submitted electronically, and that was one of the 409 00:27:52,380 --> 00:27:56,020 it was allowed to occur, because there weren't a set of human eyes that were 410 00:27:56,020 --> 00:28:02,620 reviewing these bids. In a nutshell, government contractors submit a 411 00:28:02,620 --> 00:28:08,480 billing invoice really for the product itself and for the shipping. The pot of 412 00:28:08,480 --> 00:28:11,180 money to pay for a specific good. 413 00:28:12,110 --> 00:28:15,810 It is segregated or separate from shipping costs. Shipping just comes out 414 00:28:15,810 --> 00:28:16,529 another pot. 415 00:28:16,530 --> 00:28:19,850 And those costs are never reconciled before being paid. 416 00:28:20,290 --> 00:28:25,510 It is the beginning of a $20 million fraud perpetrated on the United States 417 00:28:25,510 --> 00:28:26,510 government. 418 00:28:27,190 --> 00:28:31,990 There's a sense that they were emboldened the longer they were able to 419 00:28:31,990 --> 00:28:34,310 and the longer that it worked. So it's like, oh, 420 00:28:35,130 --> 00:28:37,970 $100 ,000 went through. Why not $200 ,000? 421 00:28:38,890 --> 00:28:42,270 We get to the point where September of 06, we're talking million dollar 422 00:28:42,270 --> 00:28:43,270 invoices. 423 00:28:44,810 --> 00:28:49,850 I just I don't know where their consciences would have kicked in and 424 00:28:49,850 --> 00:28:50,850 would have said enough. 425 00:28:51,250 --> 00:28:53,290 But clearly it wasn't before they got caught. 426 00:28:53,990 --> 00:29:00,370 Next on American Greed, Charlene and Darlene put 20 million of your tax 427 00:29:00,370 --> 00:29:01,370 to work. 428 00:29:15,500 --> 00:29:20,940 In Lexington, South Carolina, twin sisters Charlene Corley and Darlene 429 00:29:20,940 --> 00:29:23,860 have found a glitch in the Department of Defense payment system. 430 00:29:25,800 --> 00:29:29,840 Through a minor bookkeeping error, they have discovered that their humble 431 00:29:29,840 --> 00:29:35,500 hardware distributorship can charge virtually any price for shipping, and 432 00:29:35,500 --> 00:29:37,520 Department of Defense will pay it. 433 00:29:38,180 --> 00:29:43,220 What they were doing is submitting bids, and they were inflating the shipping 434 00:29:43,220 --> 00:29:44,640 costs for those items. 435 00:29:45,230 --> 00:29:48,490 It was a pretty simple scheme. 436 00:29:49,070 --> 00:29:53,910 A simple scheme that eventually puts more than $20 million in the twins' 437 00:29:54,090 --> 00:29:55,090 pockets. 438 00:29:55,530 --> 00:30:00,250 It comes as the result of an automated payment system the Department of Defense 439 00:30:00,250 --> 00:30:04,750 has set up to get supplies to the front lines as quickly as possible. 440 00:30:05,290 --> 00:30:10,150 Because we were at war, if these guys have a piece of equipment that's not 441 00:30:10,150 --> 00:30:14,030 working, we want to get them that equipment as fast as we can. 442 00:30:14,590 --> 00:30:19,810 We want to give suppliers an incentive to get it there as fast as we can. 443 00:30:20,210 --> 00:30:24,970 Anything considered high priority, including bolts and screws, is paid 444 00:30:24,970 --> 00:30:29,850 automatically. Human eyes never verify shipping charges before they are paid. 445 00:30:30,330 --> 00:30:35,590 So the objective was to get these people paid, to make them want to do business 446 00:30:35,590 --> 00:30:39,810 with the government, and also to keep the troops safe and well supplied. 447 00:30:42,330 --> 00:30:44,530 Anyone would agree that's an admirable goal. 448 00:30:45,730 --> 00:30:48,290 Not everyone accepts the excuse. 449 00:30:48,790 --> 00:30:49,930 I don't buy it. 450 00:30:51,130 --> 00:30:57,190 We have a system that declares a single nut, a single lock washer, to be some 451 00:30:57,190 --> 00:30:58,230 kind of an emergency. 452 00:30:58,930 --> 00:31:02,450 We have to ship it to the United States to get it there. What a screwy system. 453 00:31:03,530 --> 00:31:07,990 Winslow Wheeler is a part of the Center for Defense Information, a group that 454 00:31:07,990 --> 00:31:11,070 keeps tabs on the way the Department of Defense conducts business. 455 00:31:12,000 --> 00:31:13,860 This kind of thing has been going on for decades. 456 00:31:14,840 --> 00:31:20,480 It's basically a system under the pretense of being streamlined 457 00:31:20,480 --> 00:31:27,280 made itself unaccountable. These two sisters were the outsiders exploiting a 458 00:31:27,280 --> 00:31:30,400 system that invited people to exploit it. 459 00:31:30,660 --> 00:31:32,600 And exploit it they did. 460 00:31:33,020 --> 00:31:37,540 Once they determined that this inflated shipping cost would be paid. 461 00:31:38,730 --> 00:31:42,410 They went with it, and some would say drove a Mack truck through it. 462 00:31:43,030 --> 00:31:48,630 The first overcharges are for tens of thousands of dollars, but soon they grow 463 00:31:48,630 --> 00:31:50,430 to hundreds of thousands. 464 00:31:52,490 --> 00:31:56,490 So the price of the good is $3 .99. 465 00:31:56,910 --> 00:31:59,830 Totally. And then the shipping that was charged for it was what? 466 00:32:00,550 --> 00:32:03,450 $401 ,999 to ship. 467 00:32:03,870 --> 00:32:06,390 They submitted almost $72 million. 468 00:32:07,550 --> 00:32:12,710 in fraudulent shipping costs, and a little over $20 million were paid. 469 00:32:14,170 --> 00:32:18,630 They are living very well with the money that they're getting out of this. 470 00:32:19,750 --> 00:32:22,570 The sisters are driving matching Mercedes Coupes. 471 00:32:23,250 --> 00:32:27,830 They're taking very lavish vacations, taking their friends on these vacations. 472 00:32:28,490 --> 00:32:33,970 There's a nice beach south of here, Edisto Beach, where over time they 473 00:32:33,970 --> 00:32:35,210 four different beach houses. 474 00:32:35,930 --> 00:32:39,790 They have these boats and jet skis, and they're living large. 475 00:32:40,150 --> 00:32:46,290 They were stealing money to go to New York and buy hundreds of thousands of 476 00:32:46,290 --> 00:32:47,530 dollars of custom jewelry. 477 00:32:47,810 --> 00:32:54,030 They were stealing money to go on Caribbean cruises and going to Las 478 00:32:54,030 --> 00:32:58,310 they bought gifts for people. They bought cars for people. 479 00:32:58,870 --> 00:33:00,150 One of the expenditures. 480 00:33:00,920 --> 00:33:05,260 Identified was a $250 ,000 box seat purchased at Clemson Stadium. 481 00:33:06,260 --> 00:33:09,820 They certainly gave the impression of doing very well economically. 482 00:33:10,840 --> 00:33:15,080 Ted Stamboulidis owns a restaurant and a small shopping center in town. 483 00:33:15,560 --> 00:33:19,720 With all the money rolling in, the twins decide they want a taste of something 484 00:33:19,720 --> 00:33:21,860 more in line with their guilty pleasures. 485 00:33:22,500 --> 00:33:25,700 They approach Stamboulidis about renting out a space. 486 00:33:27,150 --> 00:33:33,630 Charlene and Darlene had wanted to open up a national recognized 487 00:33:33,630 --> 00:33:34,630 cookie store. 488 00:33:34,810 --> 00:33:38,990 They invested in a Nestle Toll House cookie franchise. They call it Dillon 489 00:33:38,990 --> 00:33:42,590 Cookie LLC, which we always thought was for Darlene and Charlene. 490 00:33:42,870 --> 00:33:47,490 The exuberance they demonstrate in their new venture is clear, perhaps too 491 00:33:47,490 --> 00:33:53,110 clear, as they soon incur another cost at the taxpayer's expense, gastric 492 00:33:53,110 --> 00:33:55,230 surgery for them and their husbands. 493 00:33:56,410 --> 00:34:00,790 But before long, it appears that the cookie store is little more than a 494 00:34:01,350 --> 00:34:05,290 I don't think it was doing that great, not nearly as lucrative as the 495 00:34:05,290 --> 00:34:06,290 of Defense business. 496 00:34:07,610 --> 00:34:12,489 Then in the early fall of 2006, the twins suddenly shut the store down. 497 00:34:12,969 --> 00:34:17,449 They just shut it down without any notice of any kind, just a phone call, 498 00:34:17,449 --> 00:34:18,449 closing the store. 499 00:34:19,110 --> 00:34:20,989 Thank you, bye. And that was it. 500 00:34:21,900 --> 00:34:26,080 The sweet life for the twins is about to run out in more ways than one. 501 00:34:27,940 --> 00:34:32,580 In Columbus, Ohio, the Department of Defense's Payment Center has discovered 502 00:34:32,580 --> 00:34:35,199 discrepancy in one of C andD's contracts. 503 00:34:35,780 --> 00:34:40,980 After more than six years of fleecing the U .S. government of $20 .5 million, 504 00:34:41,400 --> 00:34:44,139 the twins have finally gone too far. 505 00:34:44,440 --> 00:34:47,679 They submit two shipping invoices for the same contract. 506 00:34:48,190 --> 00:34:51,889 And even the government's generous payment system won't abide it. 507 00:34:52,730 --> 00:34:56,870 That actually kicked it out of the computer system and caused it to land on 508 00:34:56,870 --> 00:34:57,870 somebody's desk. 509 00:34:58,330 --> 00:35:03,570 It's the most outrageous charge attempted yet. And the Department of 510 00:35:03,570 --> 00:35:04,610 looking right at it. 511 00:35:05,290 --> 00:35:10,070 It's a contract for two lock washers, billed at 19 cents each. 512 00:35:10,330 --> 00:35:11,330 The shipping charge? 513 00:35:12,710 --> 00:35:14,170 $998 ,000. 514 00:35:14,910 --> 00:35:16,470 They have the audacity. 515 00:35:17,230 --> 00:35:21,910 to send those to the Department of Defense, where the money is coming out 516 00:35:21,910 --> 00:35:22,910 pockets. 517 00:35:23,090 --> 00:35:27,930 They have the audacity to bill almost a million dollars to send those two 518 00:35:27,930 --> 00:35:34,270 washers. And you can imagine, with an error of that magnitude, that it got 519 00:35:34,270 --> 00:35:35,270 everybody's attention. 520 00:35:35,550 --> 00:35:41,510 In September 2006, the Department of Defense fires a warning shot. They send 521 00:35:41,510 --> 00:35:46,930 certified letters to C andD distributors, wanting answers for the more than $20 522 00:35:46,930 --> 00:35:49,430 million in excess shipping costs. 523 00:35:50,250 --> 00:35:54,830 They realized that the game was up, and I'm quite sure that there were some 524 00:35:54,830 --> 00:35:57,290 words of prayer and some nervous people that night. 525 00:35:57,950 --> 00:36:02,590 To try to make amends, Darlene sends the government a check for $4 .5 million. 526 00:36:03,900 --> 00:36:07,520 It's a reasonable deduction from her actions that she was trying to say, 527 00:36:07,620 --> 00:36:11,200 we can make it better, we'll pay you back, and we'll be good from now on. 528 00:36:11,940 --> 00:36:13,800 But it's only wishful thinking. 529 00:36:14,280 --> 00:36:17,100 There are no bank robbers on the way out of the bank with the money. They get to 530 00:36:17,100 --> 00:36:18,760 turn around and hand it back, and everything's fine. 531 00:36:19,920 --> 00:36:24,620 When American Greed returns, the circle closes in around the twins. 532 00:36:25,200 --> 00:36:26,600 Will they face the music? 533 00:36:28,040 --> 00:36:30,220 You never know why somebody takes that step. 534 00:36:31,280 --> 00:36:34,740 But certainly the writing was on the wall, and I think she was fully aware of 535 00:36:34,740 --> 00:36:37,640 that on October 2nd when the agents left. 536 00:36:50,620 --> 00:36:55,980 In Lexington, South Carolina, the Department of Defense has uncovered a 537 00:36:55,980 --> 00:36:59,660 million fraud being perpetrated on the United States government. 538 00:37:00,460 --> 00:37:04,500 Twin sisters Charlene Corley and Darlene Wooten have been selling the Department 539 00:37:04,500 --> 00:37:09,420 of Defense common, low -cost hardware, then collecting millions in shipping 540 00:37:09,420 --> 00:37:12,220 fees. I mean, we really are talking odds and ends. 541 00:37:12,600 --> 00:37:15,840 Lock washers, bolts, light bulbs. 542 00:37:16,480 --> 00:37:21,880 To put it in context, the amount of the fraud was about $20 .5 million. 543 00:37:22,540 --> 00:37:28,080 The total cost of the goods for that $20 .5 million was about $150 ,000. 544 00:37:28,920 --> 00:37:34,620 The twins have paid a fraction of the money back, $4 .5 million, but it's not 545 00:37:34,620 --> 00:37:35,620 nearly enough. 546 00:37:36,180 --> 00:37:42,000 On October 2, 2006, federal investigators show up at C andD's front 547 00:37:43,100 --> 00:37:47,040 Darlene requested that they come back the following day, said she needed to 548 00:37:47,040 --> 00:37:51,980 gather some papers, gather her thoughts, and that implied, at least, that it 549 00:37:51,980 --> 00:37:55,460 would be a more productive discussion the next day. 550 00:37:56,330 --> 00:38:00,130 But Darlene has no intention of meeting again with investigators. 551 00:38:00,770 --> 00:38:06,430 She approached one of the employees, said she wanted to borrow his pistol, 552 00:38:06,430 --> 00:38:09,850 handgun. Said she wants to go out and shoot it or at least look at it, that 553 00:38:09,850 --> 00:38:11,910 she's thinking about buying it or something like that. 554 00:38:13,410 --> 00:38:17,690 The young person has no reason to believe that what's about to take place 555 00:38:17,690 --> 00:38:20,090 coming. And so he gives her his gun. 556 00:38:22,350 --> 00:38:24,550 We know now that she drove out to the lake. 557 00:38:25,230 --> 00:38:30,250 Agents then called her sister Charlene, pushing a bit harder for a meeting. But 558 00:38:30,250 --> 00:38:32,590 Charlene doesn't know where her sister is. 559 00:38:33,090 --> 00:38:38,410 And at that point, I think Charlene and other family members started to try to 560 00:38:38,410 --> 00:38:39,770 reach her and couldn't. 561 00:38:41,510 --> 00:38:46,690 Ultimately, Charlene went out to a trailer that was out of the lake. 562 00:38:49,450 --> 00:38:53,750 When she arrived, she was the one who discovered. 563 00:38:54,170 --> 00:38:55,830 her sister and that her sister killed herself. 564 00:39:00,010 --> 00:39:04,730 Despite the tragedy, the feds move to gather as much evidence as they can. 565 00:39:05,250 --> 00:39:08,890 Charlene hires an attorney and quickly takes up a defense. 566 00:39:09,370 --> 00:39:15,070 They argue that it was Darlene who headed the entire operation and that 567 00:39:15,070 --> 00:39:17,330 simply turned a blind eye. 568 00:39:18,050 --> 00:39:24,080 I think one of the really unfortunate things in the whole case was that when 569 00:39:24,080 --> 00:39:29,000 Darlene took her life, it enabled this defense. 570 00:39:29,440 --> 00:39:36,040 And it was a tad offensive to me in that, you know, 571 00:39:36,040 --> 00:39:42,180 here's your sister's memory, and this is what the impression that you want to 572 00:39:42,180 --> 00:39:45,380 leave people with regarding her role in this. 573 00:39:45,980 --> 00:39:50,920 Still, it's a plausible defense, and the central eyewitness to Charlene's 574 00:39:50,920 --> 00:39:52,740 involvement is now gone. 575 00:39:53,040 --> 00:39:59,500 And so as the investigation continued, our interest was discovering how 576 00:39:59,500 --> 00:40:02,240 Charlene was on the C andD distributor side. 577 00:40:02,980 --> 00:40:08,420 To prosecutors, the evidence points to only one possible conclusion, that 578 00:40:08,420 --> 00:40:10,860 Charlene was well aware of the fraud. 579 00:40:11,280 --> 00:40:13,340 From Charlene, signed by Charlene. 580 00:40:14,120 --> 00:40:18,720 Her name is actually on the Department of Defense's record for the 38 -Cent 581 00:40:18,720 --> 00:40:20,700 Washers. It's not Darlene's name that's on there. 582 00:40:21,380 --> 00:40:26,020 Her name is on all of these pieces of paper that are associated with hundreds 583 00:40:26,020 --> 00:40:29,480 thousands of dollars and millions of dollars of shipping costs. 584 00:40:29,820 --> 00:40:34,700 We came to the inescapable conclusion that she had knowledge of what was going 585 00:40:34,700 --> 00:40:37,200 on and that she needed to be prosecuted. 586 00:40:38,100 --> 00:40:43,360 Eventually, prosecutors sit down with Charlene and her attorney and show her 587 00:40:43,360 --> 00:40:44,360 the evidence. 588 00:40:44,720 --> 00:40:46,880 Charlene's response was that she pled guilty. 589 00:40:47,600 --> 00:40:54,340 On August 16, 2007, Corley pleads guilty to two counts of conspiracy, one 590 00:40:54,340 --> 00:40:56,880 for wire fraud and one for money laundering. 591 00:40:57,380 --> 00:41:01,200 It sets off a storm of reactions across Lexington County. 592 00:41:02,060 --> 00:41:05,740 She was threatened. Her family was threatened. 593 00:41:07,160 --> 00:41:10,440 There were people who were angry that she had stolen this money from our 594 00:41:10,440 --> 00:41:11,440 country. 595 00:41:12,520 --> 00:41:16,880 At sentencing, prosecutors point out the betrayal within the crime. 596 00:41:17,600 --> 00:41:21,220 This was money that was being diverted away from our troops and the Department 597 00:41:21,220 --> 00:41:22,220 of Defense. 598 00:41:22,320 --> 00:41:26,040 So not only is it the taxpayer, but it's the American soldiers who were 599 00:41:26,040 --> 00:41:27,200 victimized by this. 600 00:41:28,600 --> 00:41:32,400 And that's the way we viewed it. We thought it was an anti -American crime. 601 00:41:33,240 --> 00:41:35,700 Corley gets a chance to address the court. 602 00:41:36,330 --> 00:41:40,790 When Charlene was given the opportunity to speak for herself, she was extremely 603 00:41:40,790 --> 00:41:44,870 brief. She said that she had messed up and that she was sorry. 604 00:41:46,870 --> 00:41:52,610 And it was a bit striking to me. I've heard people who have stolen, you know, 605 00:41:52,630 --> 00:41:58,350 far less money, far less money, $5 ,000, you know, express more remorse. 606 00:41:59,170 --> 00:42:03,930 The judge is not impressed and sentences Corley to six and a half years in 607 00:42:03,930 --> 00:42:04,930 prison. 608 00:42:05,100 --> 00:42:09,080 In the wake of the case, the Department of Defense says that they fixed the 609 00:42:09,080 --> 00:42:10,980 loophole that facilitated this crime. 610 00:42:11,660 --> 00:42:15,380 But government watchdog Winslow Wheeler is still skeptical. 611 00:42:16,460 --> 00:42:19,080 Maybe they did, maybe they didn't. We don't really know. 612 00:42:19,300 --> 00:42:22,580 We don't have an evaluation or an audit of their fix. 613 00:42:23,020 --> 00:42:27,280 In the end, the residents of Lexington County are left to make sense of a 614 00:42:27,280 --> 00:42:28,740 betrayal to their values. 615 00:42:29,120 --> 00:42:33,300 What happened right here with C andD and Corley's is something that takes away 616 00:42:33,300 --> 00:42:34,300 from our country. 617 00:42:34,480 --> 00:42:36,300 and takes away from supporting our soldiers. 618 00:42:36,800 --> 00:42:41,600 And that is the worst thing to do in our country, especially when we're at war. 619 00:42:42,980 --> 00:42:47,160 In the final analysis, when it's all said and done, we're all going to be 620 00:42:47,160 --> 00:42:50,680 our maker, and we're all going to have to answer to what we've done, and I'm 621 00:42:50,680 --> 00:42:51,880 sure they've got a lot to answer to.