National Health Care Fraud Takedown Results in Charges Against 601 Individuals Responsible for Over $2 Billion in Fraud Losses

Attorney General Jeff Sessions and Department of Health and Human Services (HHS) Secretary Alex M. Azar III, announced the largest ever health care fraud enforcement action involving 601 charged defendants across 58 federal districts, including 165 doctors, nurses and other licensed medical professionals, for their alleged participation in health care fraud schemes involving more than $2 billion in false billings.  Of those charged, 162 defendants, including 76 doctors, were charged for their roles in prescribing and distributing more than 13 million illegal dosages of opioids and other dangerous narcotics.  Thirty state Medicaid Fraud Control Units also participated in the arrests.  In addition, HHS announced that from July 2017 to the present, it has excluded 2,700 individuals from participation in Medicare, Medicaid, and all other Federal health care programs, which includes 587 providers excluded for conduct related to opioid diversion and abuse. 

United States Attorney for the District of South Dakota, Ron Parsons, announced that two of the people indicted as part of the 2018 Health Care Fraud Takedown were charged in the District of South Dakota:

Robert Fox, Jr., 35 of Wagner, South Dakota, was indicted in the District of South Dakota on June 6, 2018, on two counts of obtaining controlled  substances by fraud.  The charges allege that Fox acquired and obtained and attempted to acquire and obtain hydrocodone by misrepresentation, fraud, forgery, deception, and subterfuge, and that Fox has a previous conviction for the same offense.  This case is being handled by Assistant U.S. Attorney Ann Hoffman.

Kristin Deboer, 49 of Caldwell, Idaho, was indicted in the District of South Dakota on June 25, 2018, on one count of Wire Fraud.  The charges allege that Deboer fraudulently conducted a wire transfer from a banking account belonging to the Oglala Sioux Tribe, to an account belonging to All Around Sports, L.L.C., at Idaho Central Credit Union in the State and District of Idaho.  The amount of the wire transfer was $54,000.  This case is being handled by Assistant U.S. Attorney Jeremy R. Jehangiri.

The national enforcement actions were led and coordinated by the Criminal Division, Fraud Section’s Health Care Fraud Unit in conjunction with its Medicare Fraud Strike Force (MFSF) partners, a partnership between the Criminal Division, U.S. Attorney’s Offices, the FBI and HHS-OIG.  In addition, the operation includes the participation of the DEA, DCIS, IRS-CI, Department of Labor, other various federal law enforcement agencies, and State Medicaid Fraud Control Units.  

The charges announced aggressively target schemes billing Medicare, Medicaid, TRICARE (a health insurance program for members and veterans of the armed forces and their families), and private insurance companies for medically unnecessary prescription drugs and compounded medications that often were never even purchased and/or distributed to beneficiaries.  The charges also involve individuals contributing to the opioid epidemic, with a particular focus on medical professionals involved in the unlawful distribution of opioids and other prescription narcotics, a particular focus for the Department.  According to the CDC, approximately 115 Americans die every day of an opioid-related overdose.   

According to court documents, the defendants allegedly participated in schemes to submit claims to Medicare, Medicaid, TRICARE, and private insurance companies for treatments that were medically unnecessary and often never provided.  In many cases, patient recruiters, beneficiaries and other co-conspirators were allegedly paid cash kickbacks in return for supplying beneficiary information to providers, so that the providers could then submit fraudulent bills to Medicare.  Collectively, the doctors, nurses, licensed medical professionals, health care company owners and others charged are accused of submitting a total of over $2 billion in fraudulent billings.  The number of medical professionals charged is particularly significant, because virtually every health care fraud scheme requires a corrupt medical professional to be involved in order for Medicare or Medicaid to pay the fraudulent claims.  Aggressively pursuing corrupt medical professionals not only has a deterrent effect on other medical professionals, but also ensures that their licenses can no longer be used to bilk the system.

The cases announced are being prosecuted and investigated by U.S. Attorney’s Offices nationwide, along with Medicare Fraud Strike Force teams from the Criminal Division’s Fraud Section and from the U.S. Attorney’s Offices in the Southern District of Florida, Eastern District of Michigan, Eastern District of New York, Southern District of Texas, Central District of California, Eastern District of Louisiana, Northern District of Texas, Northern District of Illinois, Middle District of Louisiana, and the Middle District of Florida; and agents from the FBI, HHS-OIG, DEA, DCIS, IRS-CI, Department of Labor, other various federal law enforcement agencies, and state Medicaid Fraud Control Units.

A complaint, information, or indictment is merely an allegation, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Additional documents related to this announcement are available here: https://www.justice.gov/opa/documents-and-resources-june-28-2018

This operation also highlights the great work being done by the Department of Justice’s Civil Division.  In the past fiscal year, the Department of Justice, including the Civil Division, has collectively won or negotiated over $2 billion in judgements and settlements related to matters alleging health care fraud.