The latest front in the Trump administration’s effort to root out waste, fraud, and abuse across the federal government resulted in the Justice Department charging some 450 people nationwide, including 90 medical professionals, accused of participating in healthcare fraud schemes amounting to billions in stolen taxpayer funds.
As reported on Wednesday’s AM Update, Acting Attorney General Todd Blanch, Health and Human Services Secretary Robert F. Kennedy Jr, FBI Director Kash Patel, and other top officials held a joint press conference Tuesday to detail the alleged misconduct behind the coordinated crackdown.
The Fraud
AG Blanche explained 455 defendants have been charged across 56 U.S. attorney’s offices in 45 states and territories. As alleged in the various indictments, Blanche said the individuals participated in healthcare fraud schemes involving over $6.5 billion in false claims submitted to Medicare, Medicaid, and other healthcare programs.
“In total, our indictment charges 11 defendants for over $2 billion in fraudulent claims in connection to alleged wound care schemes,” Blanche noted. “The indictment also alleges that these individuals then used the taxpayer money to bankroll multimillion dollar homes; luxury vehicles, like $135,000 Maserati; jewelry, like an $865,000 Bulgari necklace; and, to top it all off, to fund the construction of a $4.6 million hotel at a beach resort in the Philippines.”
Federal Trade Commission Chairman Andrew Ferguson outlined one particularly grisly scheme involving a nurse practitioner accused bilking Medicaid for almost a billion dollars in skin-substitute allografts.
“This isn’t just filing fake claims and trying to take money out of our pockets, she was performing these skin-substitute procedures on vulnerable elderly Americans in hospices and in nursing homes, and then submitting those claims,” Ferguson alleged. “She was using human beings, American citizens, as living piggy banks, and that she took the money she got from those living piggy banks and she bought $865,000 necklaces that the department seized. She bought a almost half million dollar Ferrari that the department also seized.”
The bust marks the largest healthcare fraud takedown, by number of defendants, in DOJ history, while the $6.5 billion in alleged false claims represent the second-largest dollar amount ever charged in a single enforcement action. But Ferguson said it is about more than just historic figures.
“We’ve heard a lot about the numbers today. We’ve heard how many records have been broken by the Department of Justice’s and HHS incredible efforts today, but the numbers shouldn’t be treated as an abstraction,” he noted. “This doesn’t just affect the whole country as taxpayers. Real human beings, American citizens, are physically maimed because of this fraud.”
Sea Change at HHS
According to Secretary Kennedy, at least some of the fraud was enabled by Biden-era policies. He said HHS under the Biden administration operated under “the so-called pay and chase system,” where invoices, regardless of whether they were believed to be fraudulent, were paid and then an effort was later made to “claw back” what was lost.
“Of course, we never claw back anything,” Kennedy noted. “They said that they were told to focus on enrollment and not fraud.”
Under the Trump administration, Kennedy said HHS adopted a new approach to identifying and stopping fraud before it happens. “HHS is replacing the old ‘pay and chase system’ with a ‘detect and prevent strategy’ that identifies suspicious claims before the taxpayer dollars ever leave the Treasury,” he explained. “We are deploying advanced artificial intelligence and data analytics to identify fraudulent billing patterns in real time, stop improper payments before they occur, and strengthen oversight across federal health programs.
‘Most Wanted Fraudsters’
Tuesday’s announcement came just two weeks after the FBI launched its “Most Wanted Fraudsters” list – focused specifically on fugitives accused of major financial crimes – modeled on the agency’s traditional “Most Wanted” program.
Since then, the FBI has announced the arrest of two individuals on the list, including one man accused of turning television and internet ads for orthotic braces into a pipeline for medically unnecessary prescriptions and fraudulent Medicare claims.
Director Patel explained that scheme at the presser. “Herbert Leon Kimball was apprehended in the Philippines. He is an American citizen. He had been bilking, allegedly, the system against Medicaid for billions of dollars since 2014 – $1.2 billion in telemedicine, specifically, alone,” he said.
According to Patel, the arrest demonstrates the scope and resolve of the fraud crackdown. “This is the reach of the United States government,” he said. “This is the reach of this team, the interagency and state and local partners focused on one mission and one mission alone: To combat fraud and make sure the American public’s precious taxpayer dollars go where they’re supposed to go, to the American people that need them the most and not to these criminals who are stealing from us day in and day out.”
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