In a sweeping nationwide crackdown, the Department of Justice (DOJ) has charged 193 individuals, including doctors, nurse practitioners, and other licensed medical professionals, for their roles in various healthcare fraud schemes. These schemes, which spanned across 32 federal districts, are said to have resulted in over $2.7 billion in intended losses. The announcement was made by Attorney General Merrick Garland on Thursday.
The two-week operation involved numerous law enforcement agencies and led to the seizure of more than $231 million in cash, luxury vehicles, gold, and other assets. “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. “The Justice Department will bring to justice criminals who defraud Americans, steal from taxpayer-funded programs, and put people in danger for the sake of profits.”
The defendants were accused of conducting a variety of schemes involving millions of dollars in fraudulent claims, wire fraud, healthcare fraud, and money laundering. One of the most egregious cases was in Arizona, where five cases were filed in federal court, including a $900 million scam targeting elderly and terminally ill patients.
Earlier this month, federal authorities arrested and charged the founding CEO and clinical president of a major telehealth company. Prosecutors accused the company of illegally distributing Adderall and other medications. On Thursday, Garland announced that an additional five defendants were charged for allegedly participating in the scheme to distribute more than 40 million “medically unnecessary pills.”
In Florida, corporate executives were involved in a $90 million fraud scheme that distributed adulterated and misbranded HIV drugs across the country. Other scams included targeting Native Americans with fraudulent sober living homes, illegally prescribing or distributing opioids, and medical professionals committing telemedicine and laboratory fraud.
In a separate announcement, the Center for Program Integrity of the Centers for Medicare and Medicaid Services revealed that it had taken adverse administrative actions against 127 medical providers for their alleged involvement in healthcare fraud over the past six months.
One of the most shocking cases involved four individuals in Arizona who allegedly submitted $900 million in false and fraudulent claims for amniotic wound grafts used on elderly Medicare patients, many of whom were terminally ill in hospice care. The victims were targeted through several wound care companies owned by Alexandra Gehrke, 38, and Jeffrey King, 49. Gehrke and King were charged with various counts of conspiracy, healthcare fraud, receiving kickbacks, and money laundering.
Prosecutors alleged that two nurse practitioners were also involved in the scheme. “The defendants caused unnecessary and extremely expensive amniotic grafts to be applied to these vulnerable patients’ wounds indiscriminately, without coordination with the patients’ treating physicians, without proper treatment for infection, to superficial wounds that did not need this treatment, and in sizes excessively larger than the wound,” according to the DOJ. Some patients died the same day or within days after their graft application.
Gehrke and King received over $330 million in illegal kickbacks in exchange for buying grafts that were billed to Medicare. Federal authorities seized over $70 million, including four luxury vehicles, gold, jewelry, and cash. Medicare has paid more than $1 million per patient due to the unnecessary grafts, totaling over $600 million in 16 months.
In Florida, three owners of a wholesale pharmaceutical company were accused of distributing adulterated and misbranded HIV drugs. Adam Brosius, 59; Patrick Boyd, 43; and Charles Boyd, 46, were charged in connection to their alleged wire fraud scheme. The pharmaceutical company allegedly bought over $90 million of “heavily discounted and diverted” prescription drugs from five black-market suppliers and resold them to pharmacies across the country. The drugs were distributed with falsified documentation that concealed their original sourcing. One patient passed out and was unconscious for 24 hours after taking an anti-psychotic drug that he believed was his prescribed HIV medication.
In another case, four people were charged in Arizona and Florida for allegedly filing false and fraudulent claims for patients seeking treatment for drug or alcohol addiction. The schemes resulted in more than $146 million in false and fraudulent claims. Rita Anagho, 52, was accused of paying kickbacks in exchange for the referral of vulnerable patients from the homeless population and Native American reservations. Anagho owned an outpatient treatment center in Arizona, which was enrolled as a provider in the state’s Medicaid agency. She allegedly fraudulently billed Arizona Medicaid for substance abuse treatment services that were either never provided or were provided at a substandard level.
“The defendant is charged with money laundering offenses for her lavish purchases with the fraud proceeds, as well as obstruction of justice for allegedly falsifying records in response to a grand jury subpoena for documents,” the DOJ said.
The DOJ’s sweeping healthcare fraud efforts aim to deter other potential wrongdoers and bring justice to those who exploit vulnerable populations and taxpayer-funded programs for profit.
Source: Department of Justice, Associated Press, WUSF Public Media
