193 Charged in $2.7 Billion Scam in Healthcare Fraud Schemes
In a sweeping nationwide enforcement action, the U.S. Department of Justice has charged 193 individuals, including doctors, nurses, and corporate executives, for their involvement in Healthcare Fraud Schemes totaling over $2.7 billion in false claims.
Attorney General Merrick Garland announced the charges, emphasizing that no one is above the law when it comes to profiting from the unlawful distribution of controlled substances.
“It does not matter if you are a trafficker in a drug cartel or a corporate executive or medical professional employed by a healthcare company. If you profit from the unlawful distribution of controlled substances, you will be held accountable,” Garland stated.
One of the most egregious cases was a $900 million scheme in Arizona, where two owners of wound care companies were accused of accepting over $330 million in kickbacks.
They allegedly pressured nurse practitioners to apply amniotic wound grafts to elderly patients, including those in hospice care, who did not need the treatments. Tragically, some patients died shortly after receiving the unnecessary grafts.
In less than two years, the defendants submitted more than $900 million in fraudulent claims to Medicare for the wound grafts, which were used on fewer than 500 patients. The owners, Alexandra Gehrke and Jeffrey King, were arrested at the Phoenix airport as they were attempting to flee the country to London.
Authorities found evidence that Gehrke and King were preparing to disappear, including books on how to evade law enforcement and conceal their digital footprint.
The couple had also amassed a lavish lifestyle, with luxury cars, a $6 million home, and over $520,000 in gold, coins, and jewelry. Officials seized more than $52 million from Gehrke’s personal and business accounts.
Other cases included a scheme in Florida to distribute misbranded HIV drugs, where patients were unknowingly given different medications, including an antipsychotic drug that left one patient unconscious for 24 hours. In Arizona, a woman was accused of billing the state’s Medicaid agency for substance abuse treatment services that were never provided.
In total, the Justice Department’s healthcare fraud enforcement sweep resulted in the seizure of over $230 million in cash, luxury vehicles, and other assets.
These periodic crackdowns aim to deter future wrongdoing and protect vulnerable patients from exploitation by unscrupulous medical professionals and corporate executives.
The scale and audacity of these fraud schemes underscore the need for continued vigilance and strong enforcement actions to safeguard the integrity of the U.S. healthcare system.
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