Twenty-nine defendants were charged for their roles in transnational criminal organizations, alleged to have submitted more than $12 billion in fraudulent claims to America’s health insurance programs.
For instance, a nationwide investigation known as Operation Gold Rush resulted in the largest loss amount ever charged in a health care fraud case brought by the Justice Department.
Those charges were announced in New York, Illinois, California, Florida and New Jersey against 19 defendants. Twelve of the defendants have been arrested, including four who were apprehended in Estonia as a result of international cooperation with Estonian law enforcement, and seven defendants who were arrested at U.S. airports and the U.S. border with Mexico, cutting off their intended escape routes as they attempted to avoid capture.
The organization allegedly used a network of foreign “straw” owners, including individuals sent into the United States from abroad, who, acting at the direction of others using encrypted messaging and assumed identities from overseas, strategically bought dozens of medical supply companies located across the United States.
They then rapidly submitted $10.6 billion in fraudulent health care claims to Medicare for urinary catheters and other durable medical equipment by exploiting the stolen identities of more than one million Americans spanning all 50 states and using their confidential medical information to submit the fraudulent claims.
The organization exploited the U.S. financial system by laundering the fraudulent proceeds and deploying a range of tactics to circumvent anti-money laundering controls to transfer funds into cryptocurrency and shell companies located abroad. The arrests also include a banker who facilitated the money laundering of fraud proceeds on behalf of the organization through a U.S.-based bank.
The Health Care Fraud Unit’s Data Analytics Team and its partners detected the anomalous billing through proactive data analytics, and the Health and Human Services Office of Inspector General and the Centers for Medicare and Medicaid Services successfully prevented the organization from receiving all but approximately $41 million of the approximately $4.45 billion that was scheduled to be paid by Medicare. HHS and CMS intend to seek to return the $4.41 billion in escrow to the Medicare trust fund for needed medical care.
The scheme nonetheless resulted in payments of approximately $900 million from Medicare supplemental insurers. To date, law enforcement has seized approximately $27.7 million in fraud proceeds as part of Operation Gold Rush.
In another action involving foreign influence, charges were filed in the Northern District of Illinois against five defendants, including two owners and executives of Pakistani marketing organizations, in connection with a $703 million scheme in which Medicare beneficiaries’ identification numbers and other confidential health information were allegedly obtained through theft and deceptive marketing.
Fake recordings created with AI The defendants are accused of using artificial intelligence to create fake recordings of Medicare beneficiaries purportedly consenting to receive certain products. According to court documents, the beneficiaries’ confidential information was then illegally sold to laboratories and durable medical equipment companies, which used this unlawfully obtained and fraudulently generated data to submit false claims to Medicare.
Certain defendants controlled dozens of nominee-owned durable medical equipment companies and laboratories that are accused of submitting fraudulent claims for products and services the beneficiaries did not request, need or receive. Certain defendants also allegedly conspired to conceal and launder the fraud proceeds from bank accounts they controlled in the United States to bank accounts overseas.
In total, those defendants caused approximately $703 million in fraudulent claims to Medicare and Medicare Advantage plans, which paid approximately $418 million of the claims. The government seized approximately $44.7 million from various bank accounts related to this case.
Finally, a defendant based in Pakistan and the United Arab Emirates who owned a billing company allegedly orchestrated a scheme to prey upon vulnerable individuals in need of addiction treatment by conspiring with treatment center owners to fraudulently bill Arizona Medicaid approximately $650 million for substance abuse treatment services.
According to court documents, some of the services billed were never provided, while other services were provided at a level that was so substandard it failed to serve any treatment purpose.
As part of the conspiracy, treatment center owners allegedly paid illegal kickbacks in exchange for the referral of patients recruited from the homeless population and Native American reservations. The defendant received at least $25 million of ill-gotten Arizona Medicaid funds as a result of the conspiracy and is charged with a money laundering offense for his alleged use of those funds to purchase a $2.9 million home located on a golf estate in Dubai.
Fraudulent wound care Charges were filed in Arizona and Nevada against seven defendants, including five medical professionals, in connection with approximately $1.1 billion in fraudulent claims to Medicare and other health care benefit programs for amniotic wound allografts.
As alleged, certain defendants targeted vulnerable elderly patients, many of whom were receiving hospice care and applied medically unnecessary amniotic allografts to these patients’ wounds. Many of the allografts allegedly were applied without coordination with the patients’ treating physicians, without proper treatment for infection, to superficial wounds that did not need this treatment, and to areas that far exceeded the size of the wound.
Some defendants allegedly received millions in illegal kickbacks from the fraudulent billing scheme.
'Every dollar we prevent from going to fraudsters is a dollar that stays in the system to serve legitimate beneficiaries,” CMS Administrator Dr. Mehmet Oz said. Opioid trafficking Seventy-four defendants, including 44 licensed medical professionals, were charged across 58 cases in connection with the alleged illegal diversion of more than 15 million pills of prescription opioids and other controlled substances.
For example, five defendants associated with one Texas pharmacy were charged with the unlawful distribution of more than three million opioid pills. The defendants allegedly conspired to distribute massive quantities of oxycodone, hydrocodone and carisoprodol, which were subsequently trafficked by street-level drug dealers, generating large profits for the defendants.
The Drug Enforcement Administration also announced that in the last six months, the agency charged 93 administrative cases seeking the revocation of pharmacies, medical practitioners and companies authority to handle and/or prescribe controlled substances.
“We’re targeting the entire ecosystem of fraud, from pill mills in Texas to kickback clinics exploiting Native communities,” said Robert Murphy, acting administrator of the DEA.
Other health care fraud schemes In “Takedown,” 49 defendants were charged with submitting more than $1.17 billion fraudulent claims to Medicare resulting from telemedicine and genetic testing fraud schemes.
In other cases, 170 defendants were charged with various other health care fraud schemes involving more than $1.84 billion in allegedly false and fraudulent claims to Medicare, Medicaid, and private insurance companies for diagnostic testing, medical visits, and treatments that were medically unnecessary, provided in connection with kickbacks and bribes, or never provided at all.
For example, in the Western District of Tennessee, prosecutors charged three defendants, including business owners and a pharmacist, with a $28.7 million scheme to defraud the Federal Employees’ Compensation Fund by allegedly billing for medications for injured U.S. Postal Service employees that were never prescribed by a licensed practitioner and largely were not dispensed as claimed.
And in Washington and California, prosecutors charged medical providers with allegedly stealing fentanyl and hydrocodone that was meant for the providers’ patients, including child patients in need of anesthesia.