Dem super PAC ad ties Romney to Medicare fraud

(CNN) - A new ad from the Democratic group Priorities USA escalates the battle over Medicare, connecting GOP presidential nominee Mitt Romney to Medicare fraud.

"Romney was director of a company that stole millions from Medicare," the narrator in the ad says. "Now, Romney's plan would end Medicare as we know it."

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It cites news reports on Damon Corporation, which indicate the firm was owned by Romney's financial firm Bain Capital and on whose board he served from 1990 to 1993, when Bain sold the company.

The candidate "personally made $473,000" off of the sale, The Boston Globe reported, and Bain made over $7 million. "Damon Corp. pleaded guilty in 1996 to a federal conspiracy charge of defrauding the government of $25 million between 1988 and 1993," the Globe reported.

The newspaper reported that Romney said he helped discover the fraud and hired a law firm to investigate, leading to "corrective action" which was taken prior to the company's sale. But the Globe said prosecutors alleged and the company acknowledged statements which "tell a different story, and reveal that the fraudulent activity occurred right up until the time Bain and other owners sold the company to Corning." The scheme involved fraudulently billing for a "bundle" of services when only one service, such as blood testing, had been performed.

This ad is "one more recycled desperate attack by a discredited ally of the President," Romney campaign spokeswoman Michele Davis said in a statement.

"He has kicked the can down the road and refused any serious discussion of entitlement reform," Davis continued, speaking of Obama. "Mitt Romney will protect Medicare for today's seniors and ensure that the program is preserved and strengthened for future retirees."

The Damon story was previously raised this year by a super PAC supporting one of Romney's primary opponents, former House Speaker Newt Gingrich as well as the labor group AFSCME. "While Romney was a director of the Damon Corporation, the company was defrauding Medicare of millions," went the AFSCME ad.

The fact checking website Politifact rated the claim "mostly true," noting the ad made no mention that Romney was not personally accused of being involved in the fraud.

The Priorities ad also makes no mention that Romney was never personally accused.

Obama's campaign pushed hard at Romney over his tenure with Bain Capital, especially in the summer months, charging that the GOP candidate was responsible for outsourcing jobs and profiting from closing companies.

The ad asks viewers to "connect the dots" between Romney and Gov. Rick Scott of Florida, who is not on the ballot this year.

He was CEO of the health care company Columbia/HCA, which later paid $1.7 billion in fines and pleaded guilty to 14 felony charges for fraudulently billing the federal government. Scott was never personally charged, and said during his 2010 campaign that he learned from the experience and became a better leader.

"Scott ran a company that paid a record fine for committing Medicare fraud," the ad says. "Then, as governor, Scott cut millions from healthcare."

Again urging viewers to "connect the dots," it says, "If Mitt Romney wins, the middle class loses."