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 Healthcare Fraud Crackdown 

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Michael Santos

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Healthcare fraud is a top law enforcement priority that can ensnare people in the medical industry and can carry lengthy prison sentences



The Department of Justice (DOJ) recently charged 138 people in a massive $1.4 billion healthcare fraud crackdown across the country. The people arrested include 42 doctors, nurses, and other licensed medical professionals. Many of the schemes are intended to exploit the hardships of the COVID-19 pandemic.


The alleged criminal schemes span 31 federal districts across the country and involve approximately $1.4 billion in alleged losses, most of which are related to telemedicine fraud. The DOJ Criminal Division’s Healthcare Fraud Unit leads the prosecutions now underway.

Through a coordinated effort involving multiple government agencies, the government recently announced the charges against doctors and other healthcare professionals. Several healthcare fraud schemes are included in this most recent enforcement action, such as telemedicine fraud and pandemic relief fraud. 

Deputy Inspector General for Investigations Gary L. Cantrell of Health and Human Services, Office of the Inspector General, provided a statement regarding the crackdown that highlights the message from law enforcement in connection with this crackdown. 

“We have seen all too often criminals who engage in health care fraud – stealing from taxpayers while jeopardizing the health of Medicare and Medicaid beneficiaries,” Cantrell said. 

“Today’s announcement should serve as another warning to individuals who may be considering engaging in such illicit activity: Our agency and its law enforcement partners remain unrelenting in our commitment to rooting out fraud, holding bad actors accountable, and protecting the millions of beneficiaries who rely on federal healthcare programs,” Cantrell added.  

The DOJ’s Healthcare Unit is sending a message in an attempt to deter would-be offenders from participating in these schemes. It is also demonstrating its unwavering commitment to ensuring patient safety and the integrity of healthcare benefit programs.

The numbers associated with these alleged schemes are staggering. The government claims that the underlying criminal activity resulted in total losses north of $1.4 billion. These losses include: 

  • $1.1 billion related to telemedicine fraud; 
  • $29 million in pandemic relief fraud; 
  • $133 million involving substance abuse treatment facilities (also known as sober homes) and 
  • $160 million connected to illegal opioid distribution schemes. 

Thus, criminal schemes in the healthcare space continue to be at the top of the government’s list of enforcement priorities, especially healthcare fraud. For their part, criminal organizations remain undeterred, continuing to challenge law enforcement’s fraud detection capabilities and fraud prevention controls. Exploiting the COVID-19 pandemic through telehealth fraud has been a prevalent theme, and illegal opioid prescriptions are also a significant issue.


Telehealth Fraud Cases

Forty-three people received telemedicine healthcare fraud charges. Specifically, the government alleges they submitted false and fraudulent claims involving more than $1.1 billion. According to the DOJ, some of the accused paid doctors and nurses to order unnecessary durable medical equipment, genetic testing, other diagnostic testing, and pain medications without so much as interacting with the patients. In some cases, the doctors only had very brief communication with their alleged patients, whom they had never treated before. Most of those interactions were on the phone, an atypical situation before the pandemic.

In any event, after doctors and nurses placed their orders, durable medical equipment companies, genetic testing labs, and pharmacies then purchased those orders in exchange for illegal kickbacks and bribes. In total, the people accused in this telehealth fraud scheme requested more than $1.1 billion in false and fraudulent reimbursement claims from Medicare and other government insurers.

As is often the case, the government alleges that participants in the fraud schemes spent the proceeds from the scheme on luxury items, including vehicles, yachts, and real estate.

These telehealth charges are part of a more significant trend in healthcare fraud enforcement. Recently, the DOJ brought charges in a handful of high-profile telehealth cases, including one involving a lab owner who pleaded guilty for his role in a $73 million Medicare kickback scheme. And in February, a Florida woman agreed to pay $20.3 million after using telemedicine to shield what the DOJ described as one of the largest healthcare fraud schemes in United States history. Kelly Wolfe and her co-conspirators submitted over $400 million in fraudulent telehealth claims to Medicare and the Civilian Health and Medical Program of the Department of Veterans.  

False Healthcare Claims

Nine people were charged for various healthcare fraud schemes designed to exploit the COVID-19 pandemic. These schemes resulted in close to $30 million in false claims made to government healthcare programs.

One scheme, for example, took advantage of new regulations expanding access to telehealth services. According to DOJ, the defendants misused patient information to submit claims to Medicare for medically unnecessary and expensive lab tests, including genetic testing.

Another five people are alleged to have misused pandemic relief monies that Congress allocated for urgent medical care to people with COVID-19. In these cases, defendants allegedly used the money for extravagant personal expenses, such as gambling at a Las Vegas casino and paying a luxury car dealership.

Sober Home Fraud Cases

Totaling over $100 million in false and fraudulent claims, these cases include allegations of illegal kickbacks and bribes paid in exchange for patient referrals to substance abuse treatment facilities. 

Click here for more on federal bribery and kickbacks: Understanding Federal Bribery.

In this scheme, vulnerable patients needing substance abuse treatment repeatedly received medically unnecessary drug testing. These unnecessary tests were billed at thousands of dollars per test. Billing unnecessary therapy sessions — many of which were never delivered — was also part of the scam. 

Opioid Fraud Cases

 The government charged 19 people with the illegal prescription or distribution of opioids for prescribing over 12 million doses of narcotics, primarily opioids. These defendants submitted more than $14 million in fraudulent claims.

Medically Unnecessary Treatment Fraud

Sixty defendants face fraud charges for submitting more than $145 million in false and fraudulent claims to Medicare, Medicaid, TRICARE, and private insurance companies for medically unnecessary treatment and therapy never provided.

Healthcare Fraud Penalties

Federal healthcare fraud charges are a serious situation that can lead to lengthy prison sentences. Making a false statement concerning a Medicaid or Medicare claim can result in a 5-year prison sentence for each offense. A conviction for federal healthcare fraud can result in a 10-year sentence for each offense.


Healthcare fraud remains a crucial law enforcement priority for the DOJ. All personnel in the medical industry must remain aware of the ongoing DOJ crackdown in this industry. 

Healthcare fraud is a serious criminal offense and can lead to lengthy prison sentences, and law enforcement is devoting significant resources to uncover healthcare-related criminal activity. 

If you have any questions regarding any of the issues in this blog post, don’t hesitate to contact Prison Professors. Prison Professors, an Earning Freedom company, regularly assists clients to locate and vet experienced legal counsel to people involved in criminal investigations and court cases.

Prison Professors, an Earning Freedom company, works alongside (not in place of) civil and criminal defense counsel to help clients proactively navigate through investigations and prosecutions. Our team also helps clients prepare mitigation and compliance strategies.

If you have any questions or are uncertain about any of the issues discussed in this post, schedule a call with our risk mitigation team to receive additional guidance.

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