Nationwide crackdown results in 455 prosecutions

A two-week healthcare fraud crackdown has resulted in criminal charges against 455 people that Justice Department officials say involved more than $6.5 billion in false claims submitted to insurers.

A Justice Department press release said that cases are being prosecuted by the Health Care Fraud Unit’s National Rapid Response teams in 45 states and territories, including the middle district of Tennessee. No names were mentioned from the immediate area.

A report by the Associated Press said that among those charged is a nurse practitioner accused in Texas of billing Medicare for medically unnecessary wound-care procedures and using the proceeds for fancy jewelry and luxury cars; a mental health company owner who prosecutors say targeted the homeless by billing for crisis stabilization services they did not receive; and a hospice owner alleged to have paid kickbacks to a funeral home employee for information about deceased Medicare beneficiaries.

Meanwhile, a heart doctor is charged in Florida in an $89 million healthcare fraud scheme, accused of billing insurers for medically unnecessary cardiovascular screening tests for college student-athletes and then rubber-stamping the results as normal without personally reviewing them, according to the Associated Press.

The doctor, Jason Finkelstein, 53, faces charges of healthcare fraud and conspiracy in what prosecutors describe as a years-long scheme that preyed on the fears of athletes that they could die on playing fields or courts of sudden cardiac arrest, the AP report said. Athletes with no preexisting conditions who were concerned about being cleared to compete were administered tests they did not need and, in one case, a patient whose results were falsely certified as normal later died after his significant heart problems were undetected, the indictment says.

Charges were filed against 11 defendants, including a company executive and eight medical professionals, across six districts in connection with billions of dollars in fraudulent claims for amniotic wound allografts, the press release said.

In the District of Arizona, the vice president of sales for a company that sold allografts was charged in a nationwide illegal kickback and healthcare fraud scheme. From approximately December 2021 through June 2024, providers billed Medicare over $4 billion for this company’s allografts, resulting in over $2 billion in payments, the press release said.

This significant spike in allograft billings was alleged to have been driven not by medical necessity, but by a kickback scheme that generated substantial profit margins and lavish lifestyles for marketers and providers who participated. The company did not manufacture allografts and instead acquired allografts from tissue banks and relabeled them for sale at a 2,000 percent markup, charging up to $1,450 per square centimeter, the press release said.

The defendant is alleged to have paid illegal kickbacks of approximately 40 percent of that amount, allowing marketers and medical providers to pocket approximately $500-600 per square centimeter. These lucrative kickbacks allegedly caused the defendant and others to target hospice patients and apply the allografts 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, according to the press release.

The defendant received over $24 million from the company, which he used to purchase multi-million-dollar houses, million-dollar life insurance policies, luxury vehicles, including a $135,000 Maserati, and luxury watches. This follows 15.5- and 14-year sentences obtained last year in connection with the scheme, the press release said.

Healthcare fraud has been a long-running Justice Department priority, and news conferences announcing roundups and crackdowns have been common occurrences across the years.

The Trump administration has made a point of emphasizing enforcement over the last year, including through the appointment of a new assistant attorney general, Colin McDonald, to help oversee healthcare fraud prosecutions at a Justice Department that operates multiple specialized task forces.

“Today’s cases allege more than the theft of taxpayer dollars. Many allege the theft of human dignity,” McDonald said at a news conference announcing this year’s crackdown, which covers cases charged or unsealed since June 8. “Our sick, needy and elderly placing their faith in the gift of medicine were neglected, ignored and used for personal profit,”

U.S. Department of Health and Human Services Secretary Robert F. Kennedy Jr. echoed McDonald’s assessment.

“Healthcare fraud steals from taxpayers, exploits vulnerable patients and puts lives at risk,” he said “Today’s historic enforcement action sends a clear message: if you use our healthcare system to enrich yourself at the expense of patients or the American people, we will find you, we will prosecute you, and we will hold you accountable. HHS will continue working with our law enforcement partners to protect patients, safeguard taxpayer dollars and restore integrity to our healthcare system.”

Department of Homeland Security Secretary Markwayne Mullin said that the crackdown was combined government effort.

“The coordination in the healthcare fraud takedown reinforces the Trump administration’s efforts to end the crimes of bad actors who have ripped off U.S. taxpayers,” he said, adding later: “Our message is clear: if you steal from American taxpayers, you will face the consequences.”

FBI Director Kash Patel said the results of this nationwide healthcare takedown were historic.

“Under the leadership of President Trump, Vice President Vance and the White House Task Force to Eliminate Fraud, this FBI worked alongside our DOJ partners to arrest and charge over 450 people, including almost 100 medical professionals, for over $6 billion in alleged healthcare fraud schemes – showing the enormous amount of work done by our interagency law enforcement team over the last month and beyond,” he said. “While today’s announcement is one of the largest on record, every arrest is a continued message to criminal actors who rob American taxpayers that you will not get away with your crimes.”

Sam Cowan
Sam Cowan
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