Largest Healthcare Fraud Enforcement Action in DOJ History Results in Charges Against 601 Individuals

Topics: Financial Crime, Government, Government Fraud Blogs

Court Technology

On June 28, the US Department of Justice (DOJ) and the US Department of Health and Human Services (HHS) announced the largest ever healthcare fraud enforcement action in DOJ history. The action resulted in criminal charges against 601 defendants in 58 federal districts, including 165 doctors, nurses and other licensed medical professionals for their alleged roles in healthcare fraud schemes involving more than $2 billion in false claims.

Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing opioids and other narcotics.

The criminal charges targeted schemes that billed Medicare, Medicaid, TRICARE and private insurance companies for prescription drugs and compounded medications that were not medically necessary and often were not purchased and/or distributed to patients at all. The charges also focused on individuals who were contributing to the opioid epidemic, including medical professionals involved in the unlawful distribution of opioids and other prescription narcotics.

According to the US Centers for Disease Control and Prevention (CDC), approximately 115 Americans die every day of an opioid-related overdose.

In many of the healthcare fraud schemes, patient recruiters, beneficiaries and other co-conspirators are allegedly paid cash kickbacks in return for supplying Medicare beneficiary information to providers so the providers can then submit fraudulent claims to Medicare.

DOJ & HHS Enforcement Action Highlights

Highlights from the enforcement action include:

  • In the US District Court for the Southern District of Florida, 124 defendants were charged for their roles in various fraud schemes involving more than $337 million in false claims for services, including home healthcare and pharmacy fraud. In one Florida case, an owner, medical director and two employees of a sober-living facility were charged with conspiracy to commit healthcare fraud, wire fraud and money laundering. According to the indictment, the sober-living facility engaged in a scheme to illegally recruit patients, pay kickbacks and defraud government-funded programs for widespread fraudulent urine testing. As part of the scheme, the facility submitted more than $106 million in false claims for substance abuse treatment services.
  • In the Central District of California, 33 defendants were charged for their roles in schemes to defraud insurance programs out of more than $660 million. In one California case, the indictment in a compounding pharmacy case alleges an attorney/marketer paid kickbacks and offered inducements such as prostitutes and expensive meals to two podiatrists in exchange for prescriptions written on pre-printed prescription pads without regard to the medical necessity for the prescriptions. After the prescriptions were filled, members of the conspiracy submitted approximately $250 million in false claims to federal, state and private insurers for the compounded drugs.
  • In the Southern District of Texas, 48 individuals were indicted on charges involving more than $291 million in alleged healthcare fraud. In one case, the defendants included a pharmacy chain owner, managing partner and lead pharmacist who were charged in a drug and money laundering conspiracy. The co-conspirators allegedly used fraudulent prescriptions to fill bulk orders for more than 1 million pills of hydrocodone and oxycodone, which the pharmacy then sold to drug couriers for millions of dollars.
  • In the Eastern District of Michigan, 35 defendants were charged for their alleged roles in healthcare fraud, kickback, money laundering and drug-diversion schemes involving approximately $197 million in false claims.
  • In the Northern District of Illinois, 21 individuals were charged for various fraud schemes involving home health and dental services that allegedly involved $54 million in false claims.
  • In the Eastern District of New York, 13 individuals were charged with participating in various schemes including kickbacks, services not rendered, identify theft and money laundering involving more than $38 million in false claims.
  • In the Middle District of Florida, 21 individuals were charged with participating in various schemes involving more than $21 million in false claims.
  • A joint operation in Louisiana and Mississippi resulted in charges against 42 defendants for healthcare fraud, drug diversion and money laundering schemes involving more than $16 million in false claims. One indictment alleges that three pharmacy owners and a nurse practitioner conspired to unlawfully dispense controlled substances involving $12 million in false claims.

Exclusion and Deterrence are Main Objectives 

According to the DOJ, aggressively pursuing corrupt medical professionals not only results in their exclusion from federal healthcare programs (thereby eliminating the chance for them to further defraud the government and beneficiaries), but also has the result of deterring other medical professionals from committing similar crimes.

From July 2017 to the present, HHS has excluded 2,700 individuals from participating in Medicare, Medicaid and all other federal healthcare programs. Of the 2,700 individuals excluded, 587 providers where excluded specifically for conduct relating to opioid diversion and abuse.

Thirty state Medicaid Fraud Control Units (MFCUs) also participated in the arrests.


Learn more about current healthcare fraud schemes in the United States here.