Justice Department charges nearly 200 people in $2.7 billion health care fraud schemes

FILE – Attorney General Merrick Garland speaks at the Justice Department in Washington on Aug. 11, 2023. The Justice Department has charged nearly 200 people in a sweeping crackdown on healthcare fraud schemes across the country that involved more than $2.7 billion in false claims. Garland announced the charges Thursday, June 27, 2024, against doctors, nurse practitioners and others across the U.S. who are accused of a variety of scams, including a $900 million scheme that targeted dying patients in Arizona. (AP Photo/Stephanie Scarbrough, File)

WASHINGTON (AP) — Nearly 200 people have been charged in a nationwide crackdown on health care fraud schemes that involved false claims worth more than $2.7 billion, the Justice Department said Thursday.




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Attorney General Merrick Garland announced charges against doctors, nurse practitioners and others across the U.S. who are accused of a variety of scams, including a $900 million scheme in Arizona that targeted dying patients.

“It doesn’t matter whether you are a trafficker for a drug cartel or a corporate executive or a medical professional employed by a health care company, if you profit from the illegal distribution of controlled substances, you will be held accountable,” Garland said in a statement.

In the Arizona case, prosecutors accused two owners of wound care companies of taking more than $330 million in bribes that were part of a scheme to fraudulently bill Medicare for amniotic wound grafts, which are dressings to help wounds heal.

The Justice Department said nurse practitioners were pressured to place wound grafts on elderly patients who did not need them, including those in hospice care. Some patients died the same day they received the grafts or within a few days, court documents said.

Prosecutors said more than $900 million in fraudulent claims were submitted to Medicare in less than two years, applied to fewer than 500 patients.

The owners of the wound care companies, Alexandra Gehrke and Jeffrey King, were arrested this month at the Phoenix airport as they were boarding a flight to London, according to court papers urging the judge to keep them behind bars while they await trial. An attorney for Gehrke declined to comment, and an attorney for King did not immediately respond to an email from The Associated Press.

Authorities allege that Gehrke and King, who were married this year, knew they were being charged and were preparing to flee. According to court papers, at their home authorities found a book titled “How to Disappear: Erase Your Digital Footprint, Leave a False Trail and Vanish Without a Trace.” According to the papers, one of the bags they packed for their flight contained a book titled “Criminal Law Handbook: Know Your Rights, Escape the System.”

Prosecutors alleged Gehrke and King profited handsomely from the scheme, citing in court documents luxury cars, a nearly $6 million home and more than $520,000 in gold bars, coins and jewelry. Prosecutors say authorities seized more than $52 million from Gehrke’s personal and business bank accounts after his arrest.

In total, 193 people were charged in a series of separate cases brought over about two weeks in the nationwide healthcare fraud operation. Authorities seized more than $230 million in cash, luxury cars and other assets. The Justice Department periodically carries out these sweeping healthcare fraud efforts, with the goal of helping deter other potential wrongdoers.

In another Arizona case, a woman is accused of billing the state Medicaid agency for substance abuse treatment services that served no real purpose or were never provided, prosecutors say.

Another case in Florida alleges a scheme to distribute misbranded HIV medications. Prosecutors say the drugs were purchased on the black market and then sold to unsuspecting pharmacies, who then dispensed the drugs to patients.

In some cases, patients were given bottles that contained drugs different from what was stated on the label. Prosecutors say one patient was unconscious for 24 hours after receiving what he was told was HIV medication but was actually an anti-psychotic drug.

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