WATCH - Operation Gold Rush: Justice Dept. announces largest health care fraud takedown ever

Russian-led scammers bought out legitimate U.S. medical companies, stole the identities of more than 1 million Americans and submitted $10.6 billion in bogus claims under their names, federal authorities revealed Monday in announcing what they called the largest medical fraud takedown in American history.

Medicare managed to stop most of the payments, but the scammers walked away with nearly $1 billion in fraudulent payments from Medicare and “Medigap” insurers, prosecutors charged in an indictment handed up in federal court in New York.

The Russia-based operation also used temporary visitors and illegal immigrants in the U.S. to open accounts at American banks to help move the money without triggering anti-laundering controls. The money was funneled to accounts in places such as China, Pakistan and Israel.

The takedown, which authorities dubbed Operation Gold Rush, was part of a larger campaign against medical fraud that led to charges against 324 people.

Investigators detailed degrading decisions such as prescribing and delivering needless skin grafts to people receiving end-of-life treatment and then billing Uncle Sam or the insurers for the costs.

The scams totaled more than $14.6 billion in bogus claims and $2.9 billion in payouts.

Of the 324 people charged, 25 were doctors. Dozens more had other medical licenses.

“These criminals didn’t just steal someone else’s money. They stole from you,” said Matthew Galeotti, head of the Justice Department’s criminal division. “Every fraudulent claim, every fake billing, every kickback scheme represents money taken directly from the pockets of American taxpayers who fund these essential programs through their hard work and sacrifice.”

He said scams have grown increasingly sophisticated. Gold Rush targets found ways to avoid U.S. controls established specifically to detect foreign ownership and money laundering.

Officials said the defendants include domestic and foreign operators. Although most involved were in it for pure greed, some raised national security “concerns.”

The officials declined to elaborate, but experts tied some Russian and Chinese fraudsters during the COVID-19 crisis to government-backed operations that plowed the money into nefarious anti-U.S. operations.

The Russian-led operation was the most brazen.

Authorities said it took control of more than 30 U.S. durable medical equipment firms that could bill for claims. It then used the stolen identities to submit claims for items such as glucose monitors and urinary catheters that the individuals did not need or want.

More than 400,000 Americans had reported odd notifications of equipment requests submitted in their names, authorities said.

All told, 19 people were charged in Operation Gold Rush and 12 have been arrested, including four in Estonia. Seven others were arrested in the U.S., either at an airport or as they made their way to the U.S.-Mexico border, hoping to escape federal agents who were closing in.

In another scam, 49 people were charged with submitting about $1.2 billion in fraudulent claims from telemedicine and genetic testing.

Dozens of medical professionals have been charged with illegally diverting prescription opioids. Prosecutors said five people in one Texas pharmacy were charged with distributing more than 3 million opioid pills to street-level dealers.

Six fraud cases were brought in the Washington area, five of them against Metro employees, including one train operator. Authorities said they combined to steal hundreds of thousands of dollars in bogus health care claims.

In Atlanta, five people were charged with attempting to manipulate prices and deliver skin grafts to people who didn’t need them. The FBI said that scam totaled $760 million.

In addition to Medicare, authorities said scammers targeted Tricare, the military’s health care program; Medicaid, the federal-state medical program for the poor; food stamps; workers’ compensation; and the three big pandemic relief programs for small businesses and the unemployed.

The Justice Department said it pursued some companies for civil damages. That included several transportation companies accused of overbilling the government for Medicaid transportation services.

Three Florida residents were charged with operating six plastic surgery clinics and then stealing their patients’ information to submit bogus claims.

Officials said Medicare and Medicaid were obvious targets because of the amount of money available: $1.7 billion annually.

“It’s a big target,” said Dr. Mehmet Oz, head of the Centers for Medicare & Medicaid Services.

He said the key is to stop payments before they go out the door. Once the money is gone, “it’s already offshore, somewhere in some foreign country’s vaults.”

“Foreign leaders are rejoicing in the fact that they took advantage of the American people,” he said.

He said it’s not just fraud but also money being misspent. As much as 25% of CMS’s spending is wasteful, he said.

The $14.6 billion is more than double the previous record of $6 billion for annual health care fraud takedowns, the department said. The Russian operation accounted for most of that.