"Naturally, the public expected a return on its investment.... The extravagant claims of enthusiasts—that new treatments were highly effective, that all future potential victims of mental illness and their families would be spared the suffering, that great economies of money would soon be realized—were allowed to pass unchallenged by the professional [psychiatric] side of the professional-political leadership. Promising more than could reasonably be delivered became a way of life for this [American Psychiatric Association] leadership."

Henry Foley and Steven Sharfstein
Madness and Government


Each year in America, the mental health industry defrauds between $20 and $40 billion. Already, insurance companies have issued warnings to be on guard for fake claims filed in the wake of the recent attacks and tragedy. "Companies will be vigilant in spotting and prosecuting insurance fraud," declared John Edgar, the National Association of Independent Insurers' director of claims services.62

One area that will be scrutinized is "mental anguish claims" suffered by witnesses to the tragedy who are allegedly suffering from PTSD.63 And with good reason.

For example, on April 15, 1997, New York psychologist Viola Wiegand was convicted of billing Medicare for $2.5 million in services she never provided. Wiegand and four others concocted a scheme whereby "patients" were solicited to participate in disability insurance fraud by feigning car and workplace accidents. Wiegand issued reports stating the individuals suffered from PTSD, then billed repeatedly to treat their nonexistent illnesses. Eventually they would qualify for Social Security disability and Medicare and she would sometimes bill for seeing as many as 35 of them in a day for 60- to 90-minute treatments. Over a 2-year period Wiegand submitted more than 10,000 false Medicare claims, then gave a 25% kickback to the patients.64

In 2000, the University of Pennsylvania Health System agreed to pay $12 million to settle a civil law suit over charges that a medical center had billed Medicare for psychological counseling and therapy that consisted of "watching television and attending birthday parties."65

In 2001, the Center for Health and Human Services, Inc. agreed to pay a $500,000 civil settlement to the Federal Government and the state of Massachusetts for filing fraudulent Medicare/Medicaid claims for mental health counseling and substance abuse treatments. It also agreed to plead guilty to one count of mail fraud in connection with submitting a fraudulent payment voucher.66

The largest health care fraud suit in America's history involved the smallest sector of health care—mental health. After the FBI and other federal agencies raided the offices and facilities of National Medical Enterprises, the company paid out $1.1 billion in criminal penalties, fines and to settle suits.

Taking a sample of 400 convictions of mental health practitioners over a five year period for crimes ranging from drug dealing, sexual abuse of patients, and fraud, more than $581 million was paid in criminal fines, restitution and penalties and their combined jail sentences stretched 2,700 years.

For a detailed account of these and other fraudulent aspects of today's mental health industry, see Psychiatry: Committing Fraud at

"TALK TO AUNT TILLY" - continued