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Category: Medicaid Fraud

  • Health Care Fraud Can Carry a Life Sentence When Patients Die

    Health Care Fraud Can Carry a Life Sentence When Patients Die

    Did you know? Federal health care fraud can carry a life sentence when the fraud results in a patient’s death.

    Under 18 U.S.C. § 1347, knowingly and willfully executing—or attempting to execute—a scheme to defraud a health care benefit program can ordinarily result in up to 10 years in federal prison.

    But the penalties escalate sharply when the fraudulent conduct causes physical harm.

    If the violation results in serious bodily injury, the defendant may face up to 20 years in prison.

    If the violation results in death, federal law permits a sentence of any term of years or life imprisonment, in addition to a potential fine.

    That makes § 1347 more than a statute aimed solely at protecting programs such as Medicare and Medicaid from financial loss. Congress expressly tied the severity of punishment to the human consequences of health care fraud.

    What Does 18 U.S.C. § 1347 Prohibit?

    Section 1347 makes it a federal crime to knowingly and willfully execute, or attempt to execute, a scheme:

    • to defraud a health care benefit program; or
    • to obtain money or property controlled by a health care benefit program through false or fraudulent pretenses, representations, or promises.

    The conduct must be connected to the delivery of, or payment for, health care benefits, items, or services.

    Health Care Fraud Is Not Always Just Financial Fraud

    Health care fraud cases often involve false billing, services never provided, falsified diagnoses, medically unnecessary treatment, kickbacks, fraudulent prescriptions, or other misrepresentations used to obtain payment from government health programs.

    Those same patterns also frequently appear in civil False Claims Act enforcement, where the government and whistleblowers can pursue recovery of taxpayer funds lost through false or fraudulent claims.

    But criminal health care fraud becomes considerably more serious when the scheme places patients in danger.

    For example, Find Corporate Waste previously reported on the conviction of a Brooklyn clinic owner in a $52 million health care fraud and kickback scheme. Prosecutors said patients received prescriptions from a practitioner who had not seen or spoken with them and were subjected to medically unnecessary testing while Medicare and Medicaid were billed.

    Cases like these illustrate why federal health care fraud law is not concerned only with the amount of money stolen.

    When fraudulent conduct causes serious bodily injury or death, § 1347 allows the criminal consequences to increase dramatically.

    The amount fraudulently billed therefore is not the only factor that can determine the seriousness of a federal health care fraud prosecution.

    The consequences suffered by patients can matter just as much.

    Congress Also Lowered a Potential Knowledge Barrier

    Congress amended § 1347 in 2010 to add subsection (b).

    That provision states that, for purposes of a § 1347 prosecution, a person does not need to have actual knowledge of the statute itself or a specific intent to violate that particular statutory provision.

    The government must still prove the elements of the underlying offense, including that the defendant knowingly and willfully executed or attempted to execute the fraudulent scheme.

    Why It Matters

    Federal health care fraud enforcement is often described in terms of taxpayer losses, including cases where millions or even billions of dollars are improperly billed to Medicare, Medicaid, and other health care programs.

    But § 1347 shows that Congress contemplated something more serious than financial loss alone.

    When a fraudulent scheme crosses the line from stealing health care dollars to seriously injuring or killing someone, federal criminal exposure can escalate from years in prison to life imprisonment.

    For more on fraud involving federal health care programs, see Find Corporate Waste’s coverage of Medicare fraud, Medicaid fraud, and the False Claims Act.

  • Brooklyn Adult Day Care Owner Gets 57 Months for $3.2M Medicaid Fraud

    Brooklyn Adult Day Care Owner Gets 57 Months for $3.2M Medicaid Fraud

    Brooklyn adult day care owner Eric Zhu surrendered to federal prison to begin serving 57 months for operating a $3.2 million Medicaid fraud and kickback scheme.

    According to the Department of Justice⁠, Zhu, 29, owned Prime Life Adult Day Care LLC.

    From approximately 2020 through 2025, Prime Life paid Medicaid recipients illegal cash kickbacks to enroll in its social adult day care program. The company then billed Medicaid approximately $3.2 million for services those recipients never received.

    Prosecutors said Medicaid paid the fraudulent claims in full. Zhu used multiple business entities to launder the proceeds and generate cash for the kickbacks. Investigators recovered some of that cash during a search of Prime Life.

    Zhu was ordered to pay nearly $3.2 million in restitution and forfeit another $1.5 million in fraud proceeds.

  • Brooklyn Adult Day Care Operators Accused in $38M Medicaid Kickback and False-Billing Scheme

    Brooklyn Adult Day Care Operators Accused in $38M Medicaid Kickback and False-Billing Scheme

    Federal prosecutors have charged eight defendants in an alleged $38 million Medicaid fraud scheme involving two Brooklyn social adult day care centers: APNA Adult Daycare and Ashiana Social Adult Daycare, according to the New York Post⁠.

    The reported indictment alleges that Medicaid recipients were paid cash kickbacks to enroll, recruiters were paid to bring in beneficiaries, and the centers then billed New York Medicaid for services that were not actually provided. Prosecutors also reportedly allege fake sign-in sheets, Pakistan-based billing support, and shell-company transfers labeled as “gifts,” “dividends,” “medicine,” or “laddu.”

    For Find Corporate Waste, the relevance is the public-funds mechanism: Medicaid claims allegedly tied to false attendance, kickback-driven enrollment, and non-rendered services.

    That is the same fraud structure FCW tracks across taxpayer-funded health care programs, including provider eligibility, billing integrity, ownership/control relationships, and public-payment exposure.

    The case also fits a broader enforcement pattern. DOJ previously announced guilty pleas in a $68 million Brooklyn adult day care fraud scheme⁠ and charged two Queens men in an alleged $120 million adult day care and pharmacy fraud scheme⁠. 

  • DOJ Sues to Stop Alleged Fraud in New York’s $10 Billion Medicaid Home-Care Program

    DOJ Sues to Stop Alleged Fraud in New York’s $10 Billion Medicaid Home-Care Program

    The Department of Justice⁠ filed suit in the Eastern District of New York against the New York State Department of Health, New York Medicaid Director Amir Bassiri, and Public Partnerships LLC over alleged fraud involving New York’s $10 billion Consumer Directed Personal Assistant Program, known as CDPAP.

    CDPAP is a Medicaid home-care program for patients with disabilities or significant medical needs.

    According to the DOJ, in 2024, New York consolidated hundreds of fiscal intermediaries into a single statewide administrator, ultimately awarding the contract to Public Partnerships LLC.

    The DOJ alleges that New York awarded PPL the CDPAP contract through a “sham bid process,” then failed to stop PPL from deviating from the financial limits and representations contained in its bid.

    The lawsuit⁠ also claims PPL and New York misled the public about whether the transition could be completed by April 1, 2025, despite allegedly knowing the timeline was unlikely to be met.

    The complaint alleges that CDPAP served more than 250,000 patients and 300,000 caregivers as of fall 2024. DOJ says the program bills approximately 350 million hours of care each year, meaning even small improper rate changes could generate tens of millions of dollars in unauthorized revenue.

    For Find Corporate Waste⁠, the case reflects the core oversight problem in federally funded health-care programs: public money can be lost not only through false claims, but also through weak contract enforcement, eligibility failures, and unchecked administrative control over taxpayer-funded payment streams.

  • Circle Medical to Pay $3.325M Over Alleged False Healthcare Claims

    Circle Medical to Pay $3.325M Over Alleged False Healthcare Claims

    San Francisco-based Circle Medical Care of California, Circle Medical Technologies, Inc., and Chief Medical Officer Dr. Nicole Tsang, D.O., agreed to pay $3,325,000 to resolve allegations that they submitted false claims to federal healthcare programs and California commercial insurers.

    According to the DOJ⁠, Circle operates an online telehealth platform offering mental health and primary care services through contract providers, including nurse practitioners and physician assistants. The government alleged that from January 1, 2018 through May 31, 2025, Circle submitted claims using the names and NPI numbers of rendering providers who did not actually provide or supervise the services billed. The claims allegedly involved programs including Medicare, Medicaid, and TRICARE.  

    The settlement allocates $475,000 to the United States and $2.85 million to California. The matter began as a qui tam whistleblower case filed by Jason Vellen, who will receive $80,750 from the federal recovery and $997,500 from California.  

    This case fits the broader Find Corporate Waste focus on healthcare payment integrity: claims data, provider identifiers, supervision rules, and federal program billing requirements can expose recoverable taxpayer losses. 

  • Ahold Delhaize USA to Pay $40M Over Allegedly Inflated Pharmacy Prices

    Ahold Delhaize USA to Pay $40M Over Allegedly Inflated Pharmacy Prices

    Ahold Delhaize USA Inc.⁠, the parent company behind supermarket pharmacy brands including Giant, Hannaford, Stop & Shop, Food Lion, and others, has agreed to pay $40 million to resolve False Claims Act allegations involving prescription drug pricing.

    According to the DOJ⁠, Ahold Delhaize allegedly reported inflated “usual and customary” prices on claims submitted to Medicare Part D, Medicaid, and TRICARE. Prosecutors said the company operated prescription savings programs that offered discounted prices to enrolled customers, but allegedly failed to report those discounted prices as the pharmacies’ usual and customary prices.

    That distinction matters because usual and customary prices can operate as ceiling prices in federal health care reimbursement formulas. The government alleged that by reporting higher prices, Ahold Delhaize caused federal health care programs to pay more than they should have paid on pharmacy claims.

    Of the $40 million settlement, $32.9 million represents the federal share, with the remainder going to participating states.

    The case began as a whistleblower action filed by Lawrence LaBenne, a Pennsylvania pharmacist at an Ahold Delhaize supermarket.

    He will receive $6,083,587 from the federal recovery.

    The settlement is another example of how pricing representations, claim-level billing data, and insider knowledge drive many False Claims Act recoveries.

    For Find Corporate Waste⁠, the case fits the broader enforcement pattern: federal programs rely on accurate certifications and truthful claim data, and public money can be recovered when those representations are allegedly false.

  • Brooklyn Clinic Owner Convicted in $52M Health Care Fraud and Kickback Scheme

    Brooklyn Clinic Owner Convicted in $52M Health Care Fraud and Kickback Scheme

    A federal jury in the Eastern District of New York convicted Tony Brown-Arkah, 78, owner of American Medical Centers, a Brooklyn clinic that purported to provide substance abuse treatment, for his role in a $52 million health care fraud, narcotics, and kickback scheme.

    According to the Department of Justice, Brown-Arkah’s clinic illegally prescribed Suboxone, a Schedule III narcotic used to treat opioid use disorder, while allowing drug diversion activity to operate around the clinic. Witnesses testified that patients were directed to sell prescriptions outside the facility, including to a van near the clinic.

    The DOJ said many patients received prescriptions signed by a nurse practitioner in Florida who did not see or speak with them. Patients were also subjected to medically unnecessary testing, while Medicare and Medicaid were billed for services that were not provided or not legitimate.

    Brown-Arkah was also convicted of paying patient kickbacks and receiving laboratory kickbacks tied to unnecessary testing referrals. Prosecutors said he used a shell company and sham contract to conceal the payments.

    The case reflects the DOJ’s continued focus on health care fraud involving addiction treatment, laboratory testing, controlled substances, and federal program billing.

    DOJ Press Release — Clinic Owner Convicted for $52M Health Care Fraud, Illegal Narcotics Distribution, and Kickback Scheme

    DOJ Health Care Fraud Unit

    Find Corporate Waste — False Claims Act

  • Minnesota Medicaid Fraud Takedown Charges 15 Defendants in Alleged $90M Scheme

    Minnesota Medicaid Fraud Takedown Charges 15 Defendants in Alleged $90M Scheme

    The DOJ announced a major Minnesota health care fraud takedown on May 21, 2026, charging 15 defendants in alleged schemes involving more than $90 million in intended loss.

    The charges target owners of child care centers, autism-service providers, housing-support operators, and other Medicaid-linked providers accused of exploiting public programs designed for vulnerable children, disabled adults, seniors, and low-income families.

    According to the DOJ, the largest case involves Minnesota’s Early Intensive Developmental and Behavioral Intervention program, known as EIDBI, which provides services for people under 21 with autism spectrum disorder.

    Two defendants were charged in connection with an alleged $46.6 million scheme involving kickbacks to parents, medically unnecessary autism diagnoses, and billing for autism services that were not actually provided.

    The growth of the program is staggering. The DOJ said EIDBI claims rose from more than $600,000 in 2018 to more than $400 million by 2025. That kind of explosion is exactly why health care fraud enforcement increasingly depends on data analytics, billing-pattern review, and cross-agency scrutiny.

    The takedown also includes first-of-their-kind criminal prosecutions involving Minnesota’s Integrated Community Supports and Individualized Home Supports programs. In the ICS case, prosecutors allege a defendant billed Medicaid for services that were not provided as represented, including for a vulnerable recipient who required 24-hour care and was later found deceased. In the IHS case, two defendants allegedly concealed financial interests in more than 20 residences while billing Medicaid for services tied to adults with disabilities.

    The DOJ also charged eight defendants in alleged Housing Stabilization Services fraud totaling approximately $15.7 million. That program was created to help people with disabilities, seniors, and people with mental health or substance-use disorders find and maintain housing. But prosecutors said low barriers to entry and minimal documentation requirements made the program vulnerable to fraud. Minnesota eventually shuttered the program on October 31, 2025, after fraud concerns overwhelmed its integrity.

    This announcement is not just about Minnesota. The DOJ also announced funding for 15 new Trial Attorney positions to expand Medicaid fraud enforcement nationwide. The department said these prosecutors will support existing strike forces in states including California, Florida, New York, and Texas, while also expanding rapid-response enforcement across the country.

    For Find Corporate Waste, the message is clear: Medicaid fraud is not a paperwork problem. It is a taxpayer-integrity problem. These programs exist to serve people with serious needs, but weak controls, loose provider entry standards, shell-provider structures, and explosive billing growth can turn public benefits into private revenue machines.

    The DOJ also emphasized that its Health Care Fraud Section’s Data Fusion Center used advanced data analytics to identify and support the Minnesota cases. That matters. Public records, provider data, corporate filings, exclusion lists, addresses, ownership patterns, billing spikes, and program-growth anomalies can reveal serious fraud signals long before a prosecution is announced.

    This is the kind of enforcement environment where public-interest data mining matters. Find Corporate Waste tracks fraud, waste, abuse, and False Claims Act enforcement because taxpayers deserve to know how public money is being spent, who is exploiting weak oversight, and our country will not survive the looting of our government for personal gain.

  • Children’s Medicaid Program Hit With $15.2M False Claims Judgment

    Children’s Medicaid Program Hit With $15.2M False Claims Judgment

    The operators of a children’s day treatment program have agreed to a $15,248,240.66 civil judgment in favor of the United States to resolve allegations that they defrauded the Kentucky and Ohio Medicaid programs, according to the U.S. Attorney’s Office for the Eastern District of Kentucky. 

    The settlement involves Recovery Center of Kentucky, LLC, Recovery Center of Ohio, LLC, Recovery Center of Maryland, LLC, Recovery Center of USA, and CEO Dr. Warrick Stewart. The government alleged that the entities violated the False Claims Act, which prohibits submitting false claims for payment to government programs such as Medicaid.

    At issue was the Aspire Day Program, which served children with behavioral and mental health needs in Elizabethtown, Lexington, Louisville, and Radcliff, Kentucky, as well as Cincinnati, Ohio. These programs may include therapy and behavioral health services, sometimes alongside school or other activities.  

    The government alleged that, from August 2022 through June 2025, the Recovery Centers billed Medicaid for children’s time spent on education, recreation, and lunch breaks, even though Kentucky and Ohio Medicaid only covered time spent receiving behavioral health services.  

    The government also alleged that Recovery Center of Kentucky misrepresented staff qualifications to obtain higher Medicaid reimbursements. In some cases, services allegedly performed by lower-level staff were billed as if they had been provided by higher-level licensed professionals. In other cases, the government alleged that certain employees were not qualified to provide day treatment services at all.

    This case began as a qui tam lawsuit under the False Claims Act, meaning private whistleblowers helped bring the alleged misconduct to light. The docket information is United States ex rel. Harned, et al. v. Aspire Day School, LLC, et al., Case No. 3:23-cv-41-GFVT.

    As part of the resolution, Recovery Center entered into a five-year Corporate Integrity Agreement with HHS OIG, requiring strengthened compliance obligations going forward. The civil judgment will be satisfied under terms based on the defendants’ ability to pay.

    Find Corporate Waste tracks cases where taxpayer-funded health care dollars may have been misused through false billing, ineligible recipients, weak oversight, or improper certifications.

     If you have credible information about Medicaid, Medicare, PPP, Provider Relief Fund, or other government-funded health care fraud, your information may help expose waste and recover public money.

  • Takeda to Pay $13.6M Over False Claims Act Allegations Tied to Physician Payments

    Takeda to Pay $13.6M Over False Claims Act Allegations Tied to Physician Payments

    Takeda Pharmaceuticals U.S.A. Inc. has agreed to pay $13,670,921 to resolve False Claims Act allegations involving improper payments to physicians who prescribed Trintellix, an antidepressant medication marketed for major depressive disorder. The Department of Justice said the alleged conduct caused false claims to be submitted to Medicare and other federal health care programs.  

    The settlement centers on the federal Anti-Kickback Statute, which prohibits offering or paying anything of value to induce referrals or prescriptions covered by Medicare, Medicaid, TRICARE, and other federal health care programs.

    DOJ alleged that from January 2014 through October 2020, Takeda paid improper remuneration to health care providers, including speaker honoraria and meals at high-end restaurants, to encourage prescriptions of Trintellix.  

    According to the government, Takeda selected certain providers for its Trintellix speaker bureau and gave them paid speaking opportunities with the intent that those payments and related benefits would influence prescribing decisions.

    The DOJ also alleged that some prescribers attended multiple programs on the same topic, received meals and drinks, and gained no real educational value from repeated attendance.  

    The case is important because it shows how False Claims Act liability can arise even when the drug itself is legitimate and the prescription may appear ordinary on paper. The issue is not simply whether a medication was dispensed. The issue is whether federal health care dollars were tainted by payments, perks, or side benefits that improperly influenced medical judgment.

    Assistant Attorney General Brett Shumate said that the DOJ remains committed to pursuing False Claims Act violations arising from illegal kickbacks, warning that such conduct can undermine patient trust and increase drug costs for taxpayers. The Eastern District of California, HHS-OIG, and the Defense Criminal Investigative Service also participated in the investigation.  

    This settlement also fits into DOJ’s broader enforcement posture. The release specifically ties the case to the Administration’s Task Force to Eliminate Fraud and the National Fraud Enforcement Division, both aimed at fraud, waste, and abuse in federal programs. DOJ emphasized that False Claims Act enforcement remains central to recovering taxpayer dollars and holding wrongdoers accountable.

    The Takeda settlement is another example that shows how federal fraud may not always look like a fake business or a forged invoice. Sometimes it involves more sophisticated schemes like a polished compliance program, a speaker event, a catered dinner, or a repeat “educational” session that quietly changes prescribing incentives.

    Find Corporate Waste exists to help taxpayers, whistleblowers, and concerned insiders spot the patterns others miss.

    If you have information about improper billing, kickbacks, false certifications, pandemic relief abuse, or corporate conduct that may have caused taxpayer money to be wasted, we want to hear from you. Federal fraud often hides behind paperwork that looks clean on the surface. The more people come forward, the harder it becomes for corporations to treat public money like private profit.