Reuters is running a series of articles on corporate secrecy and today they have a doozey on Medicare fraud carried out by people who create shell corporations and then bill Medicare for services that weren't performed.

Michel De Jesus Huarte, a 40-year-old Cuban-American, hadn't simply avoided arrest. He had hatched a plan to steal millions more from Medicare by forming at least 29 other shell companies - paper-only firms with no real operations. Each time, he would keep his name out of any corporate records. Other people - some paid by Huarte, some whose identities had been stolen - would be listed in incorporation papers.

The shells functioned as a vital tool to hide the Medicare deceit - and not only for Huarte. Hundreds of others have used the veil of corporate secrecy to help steal hundreds of millions of dollars from one of the nation's largest social service programs, a Reuters investigation has found.

Huarte is now behind bars and did not respond to requests for comment. But basic checks by Reuters of Medicare providers in one city - Miami - suggest shell companies remain prime tools in perpetrating fraud. Simply by reviewing the incorporation records of Medicare providers in two buildings there, reporters uncovered information that one government official said could prompt "a serious criminal investigation" of some of the companies.

The fraud rings merge stolen doctor and patient data under the auspices of a shell company and then bill Medicare as rapidly as possible. Other shell companies are often layered on top to camouflage the fraud, law enforcement officials say.

Some of the shells purport to be billing companies; they form a buffer between the sham clinics and Medicare. Others pay kickbacks to doctors and patients who sign off on bogus medical claims or sell their Medicare ID numbers to enable the shell company to bill the government. Still other shells act as fronts to launder the profits.

The key to this kind of fraud, known as a "bust-out" scheme, is for each of the fake companies to bill as much as possible before authorities catch on. Shell companies become a tool that helps keep the crooks ahead of the cops.

It's estimated that there is $48 billion in Medicare fraud out there - that's more than 10% of the total amount spent ($447 billion in FY 2010). For crooks, the ease with which they steal from the taxpayer is negligence on the part of Congress and HHS. The lack of oversight is appalling and considering the dire straits the program will be in over the next decade, something better be done to curb the fraud or it will only make the necessary reforms that much more painful.