The high-profile federal raid on a South Florida ophthalmologists office was more about potential Medicare fraud than about U.S. Sen. Bob Menendez, a longtime friend of Dr. Salomon Melgen.
Joining FBI agents on the two-day raid at the doctors West Palm Beach eye center: a team of investigators from the U.S. Department of Health and Human Services, which investigates Medicare wrongdoing.
The FBI is separately examining the ties between Menendez, a New Jersey Democrat, and Melgen in a parallel corruption investigation launched last year, The Miami Herald has learned.
FBI agents are investigating the allegations of a shadowy tipster who claimed the doctor flew Menendez on his plane to the Dominican Republic.
Earlier this month, Menendez quietly sent a $58,500 personal check to Melgens company to reimburse the cost of two flights to and from the Dominican Republic, the senators office confirmed Wednesday.
The tipsters most explosive charge: that the two allegedly hired underage prostitutes.
Menendez strenuously denied the accusation and blamed it on an election-year conspiracy involving the conservative website, the Daily Caller, which stands by its reporting.
Any allegations of engaging with prostitutes are manufactured by a politically motivated right-wing blog and are false, Menendezs office said in a statement Wednesday, following the raid on Melgens clinics in West Palm Beach and two other South Florida locations.
The ethics watchdog group that brought the tipster to the FBIs attention also suspected that a partisan, political motive underpinned the allegation about the prostitutes.
The information was pushed just months before Menendezs successful reelection in November.
What has transpired since is a web of political recriminations, big money, sex, hard-ball investigations and a public-relations nightmare for a powerful politician and his longtime friend, Melgen, who couldnt be reached for comment.
BOXES AND BOXES
The raids on Melgens eye centers involved dozens of agents with the FBI and HHSs Office of Inspector General hauling away boxes of financial documents, patient records and other materials that will be used for their joint Medicare fraud investigation into the doctors business.
In South Florida, the two agencies routinely join forces to investigate allegations of fraud, such as false claims submitted by healthcare providers to the taxpayer-funded Medicare program for the elderly and disabled.
Agents began their raid late Tuesday and continued their search into Wednesday at the doctors West Palm Beach office. At one point Wednesday, agents escorted a locksmith onsite.
Agents conducted the raid primarily to investigate possible fraudulent billing activities by Melgens business. But they could use any evidence they find for the parallel corruption investigation concerning the prostitutes, trips Menendez took on the doctors private plane and the senators gift disclosures.
Menendezs office said he flew only three times on Melgens plane: two personal trips in August and September of 2010 that did not need to be publicly reported and a May 2010 trip that was reimbursed by the Democratic Senatorial Campaign Committee, which Menendez chaired at the time.
During Menendezs tenure, records show, Melgen and his wife contributed $60,400 to the group.
Since 1998, Melgen and his family have contributed another $33,200 to Menendezs various campaigns out of nearly $358,000 in political donations they gave to him and other candidates and causes. Most recipients are Florida Democrats.
Melgens contributions appear typical for a mid-range to large political donor. The FBI is examining whether Melgen gave any unreported or impermissible gifts.
The FBI also is investigating the allegations involving hiring prostitutes, some of whom the tipster said were minors. Sex with a minor is a U.S. federal crime even if it occurs with a child in another country. Menendez has called the allegations of illicit sex fallacious.
The Senate Ethics Committee chairwoman, Barbara Boxer, said her committee couldnt comment on any pending complaint and said it wouldnt act in the short term.
If you go back to the way weve handled it in prior cases, if there is a Justice Department investigation going on, then theres normally a deferral until theyve completed that investigation, said Boxer, D-Calif..
Sen. Charles Schumer of New York, the No. 3 Senate Democrat, responded angrily when asked about the Menendez matter.
I am not going to comment, Schumer snapped at a reporter.
Neither would Florida Sen. Marco Rubio, a Republican and member of the bipartisan immigration-reform group that includes Schumer and Menendez.
News of the two-day raid sent shockwaves from the Dominican Republic to Washington to New Jersey. The search and seizure at Melgens office happened just as Menendez becomes a national figure for his leadership in the immigration debate and as he assumes the chairmanship of the Senate Foreign Relations Committee.
Just before Menendez took over the chairmanship, anonymous sources began circulating a batch of emails between the FBI and the tipster discussing allegations that Menendez had sex with Dominican Republic prostitutes at Melgens Casa de Campo estate.
The emails between the FBI and the tipster, who went by the name Peter Williams and used a Yahoo! email account, indicated that an FBI agent became frustrated with his elusiveness in recent months.
He refused to call the lead FBI investigator, Miami-based agent Regino Chavez, or meet with him personally. All correspondence was by email.
Early on, Chavez told the tipster that we have been able to confirm most of the information he provided. But its not clear what that information was at the time. And over the months, the tipster kept dodging him and failing to provide information, according to a dossier of the emails sent to reporters anonymously.
Chavez was given the tipsters email account in August by the group Citizens for Responsibility and Ethics in Washington, called CREW.
CREWs executive director, Melanie Sloan, said the group made sure the FBI investigated the case after the FBI failed to follow up on another inquiry years before involving then-Congressman Mark Foley, a Republican from West Palm Beach.
Still, Sloan had concerns.
It didnt seem credible, she said. The tipster said he wanted justice done but also suggested he knew about this activity since 2008, she said. But he decides to hold off on telling anyone until the spring when Menendez is up for re-election and the control of the Senate is at stake? It doesnt make sense.
But the story was sensational and when the information made it to the Daily Caller, the publication was able to interview two women it identified as the prostitutes. It then ran a story before the November election, which Menendez won anyway.
Melanio Figueroa, a Dominican lawyer who represented the women, told The Miami Herald in the Dominican Republic on Wednesday that he no longer represents the two alleged prostitutes.
Figueroa said his former clients had not returned his calls for months. Im no longer in contact with those girls, he said. Thats what I told the [FBI] investigator, too.
Figueroa said he found their interviews with the Daily Caller credible. I have no reason to believe it was politically motivated, he said. It wasnt like that.
Figueroa said he believes the same fear pushed his clients into hiding. I think theyre afraid, he said. Thats why they are not coming forward.
Miami Herald staff writer Carli Teproff in West Palm Beach, special correspondent Ezra Fieser in the Dominican Republic and James Rosen of the McClatchy Washington Bureau contributed to this report.