The Law: Uncle Strikes Back

The bust took 18 months of sleuthing. Starting with a tip in late 1974, federal investigators painstakingly pieced together the facts of an intricate $20 mil lion Medicaid scheme and indicted 16 people in Chicago two weeks ago. By last week six of them had pleaded guilty, and one indicted doctor had committed suicide. The case is the latest example of the fastest-growing form of white-collar crime: ripping off Uncle Sam's multibillion-dollar social-welfare programs. But with the Chicago indictments, Uncle also served notice that he is finding new ways to strike back.

After an Illinois public aid worker first reported his suspicions,...