And in Los Angeles, the City of Angels Medical Center recruited homeless people off the street to fill their empty beds, offering them cash and drugs plus clean sheets and three square meals a day, while billing Medicare tens of millions of dollars for their stay.
"We have to understand this is a major fraud area," United States Attorney General Eric Holder told Kroft.
Holder is taking a crime that has been in the backwaters of law enforcement and made it a top priority at the Justice Department.
"Why do you think it's been so attractive for the criminals?" Kroft asked.
"Because I think it's been pretty easy. I think that they have found a way in which they have been able to get pretty substantial amounts of money with not a huge amount of effort and at least until now, without the possibility of great detection," Holder explained.
The attorney general agreed that the risks are much lower. "You'll see some of these people and they'll say 'You know there is not a chance that you are going to have some other drug dealer shooting at you.' The chances of being incarcerated were lower, the amount of time you would spend in jail was smaller. All of which is different now."
"You're wakin' up every day makin' $20,000, $30,000, $40,000. Every day, almost literally. And you're like 'Wow I just won the lottery,'" a man we'll call "Tony" told Kroft.
Tony is not his real name. Before he was ratted out by a friend and brought down by the FBI, he was making Wall Street money running a string of phony medical supply companies out of a building that were theoretically providing wheel chairs and other expensive equipment to Medicare patients.
He told Kroft he stole about $20 million from Medicare. He told Kroft it was "real easy."
"And you're not exactly a criminal mastermind?" Kroft asked.
"No. No," Tony said. "No, not really. It's more like common sense."
Asked if he actually ever sold any medical equipment, Tony said, "No. Just have somebody in an office answering the phone, like we're open for business. And wake up in the morning, see how much, check your bank account and see how much money you made today."
He told Kroft he didn't have any medical equipment or real clients - all of it was fake.
"And you would just fill out some invoices and some forms and send 'em to Medicare?" Kroft asked.
"That's it. In 15 to 30 days you'll have a direct deposit in your bank account. I mean it was ridiculous. It's more like taking candy from a baby," Tony said.