The case involving the theft of $5 million in Medicaid money at the S.C. Department of Social Services has swollen to encompass enough alleged criminals - an estimated 350 at last count - to populate a small town.
"It's the biggest one I remember us prosecuting," said Acting U.S. Attorney for South Carolina Kevin McDonald.
It's bigger than an illegal Upstate marriage scheme years ago, with its 200-plus defendants. Bigger than the 95-defendant food-stamp fraud case in Newberry County in recent years.
And in a state accustomed to stunning and headline-grabbing crimes by officials - from State Treasurer Thomas Ravenel's cocaine distribution to Agriculture Commissioner Charlie Sharp's taking bribes from cockfighters - the DSS fraud is in a class by itself.
And its threads continue to unravel. Others are pleading guilty, three more so far this month. More people still could be arrested. And more about how the case was cracked is coming to light.
At the DSS fraud's center was Paul Moore, 60, the agency's former finance director. The department handles hundreds of millions in state and federal money each year and provides aid to the state's most helpless, including foster children. Moore has since pleaded guilty to federal charges including theft from an organization receiving federal funds. He has not been sentenced.
As DSS finance director, Moore made $90,446 - three times the average per capita S.C. income.
But around 2004, Moore dreamed up a scheme whereby he could siphon money from a DSS Medicaid account that helps the needy. A lot of the money he would steal - some $5.2 million from 2004 to 2008 - went to support his lifestyle, which included frequent visits to strip clubs and bars, according to the U.S. attorney's office.
Officials and records said the fraud worked this way:
First, Moore chose trusted friends, then turned to a chief lieutenant, Jonathan Moses, to recruit people to cash checks from the Medicaid account. Moore then made out checks - at an average of $7,000 a check - to individuals he or Moses chose.
That individual would then take the check to a local bank, get it cashed and deliver the money to Moses. Moses would then give some money to the check-casher, take a cut, and turn the rest over to Moore.
As time went on, people involved in the scheme recruited others. Eventually, the scheme involved hundreds of people cashing checks at different banks. It even involved drivers who drove the check-cashers to banks.
In all, some 750 illegal checks - averaging $7,000 a check - were written on the DSS account.
"It was a criminal version of multilevel marketing," McDonald said.
Moore, using spycraft techniques of "cutouts," or intermediaries, kept himself at arms' length from the most visible criminal act - cashing an illegal check at a bank.
A lucky break led law enforcement to the culprits.
"The case literally dropped in their laps," said defense attorney Johnny Gasser, who represented Moore chief lieutenant Moses.
A man who had cashed some checks for Moses got angry at Moses when he refused to go along with a drug scheme, Gasser said Tuesday. That man called the Secret Service and ratted Moses out.
With that lead, agents - both the Secret Service and SLED became involved - started tracking down cashed checks and traced them back to the DSS account.
Finding check-cashers has been time-consuming but relatively easy, since each check-casher used his or her real name and bank tellers took down identifying information - such as driver's license information - when the check was cashed.
As SLED and Secret Service investigators worked backward, they found check-cashers willing to squeal on others in the scheme.
Thus, it has been a near-perfect case: Investigators have both a clear paper trail as well as plenty of suspects willing to tell the government what they know.
Moses is now serving an eight-year federal prison term but is fully cooperating with law enforcement, Gasser said.
DSS has learned from the experience.
"DSS has made changes to prevent such a thing from happening again," said DSS general counsel Virginia Williamson. Controls have been added to financial systems and a fraud hot line and new fraud-detection procedures are in place, she said.
SLED director Reggie Lloyd said his agency has learned, too. SLED, the FBI and the Secret Service will use the DSS case as a model for joint state-federal cooperation in targeting state white-collar crime in public and private sectors.
Only the public remains the loser. Of the $5.2 million stolen, about $27,000 has been returned to DSS, the agency says.
About 60 suspects have pleaded guilty or been indicted. That leaves 290 to go.
People with information on the case can call Assistant U.S. Attorney Debbie Barbier at (803) 929-3000.