US charges 193 people in $2.7bn healthcare fraud crackdown | Business and Economy News

Nearly 200 people have been charged in a sweeping nationwide crackdown on healthcare fraud schemes with false claims topping $2.7bn, the United States Department of Justice has said.

Attorney General Merrick Garland announced on Thursday charges against doctors, nurse practitioners and others across the US accused of a variety of scams, including a $900m scheme in Arizona targeting dying patients.

“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 said in a statement.

In the Arizona case, prosecutors have accused two owners of wound care companies of accepting more than $330m in kickbacks as part of a scheme to fraudulently bill Medicare for amniotic wound grafts, which are dressings to help heal wounds.

Nurse practitioners were pressured to apply the wound grafts to elderly patients who did not need them, including people in hospice care, the Justice Department said. Some patients died the day they received the grafts or within days, court papers say.

In less than two years, more than $900m in bogus claims were submitted to Medicare for grafts that were used on fewer than 500 patients, prosecutors said.

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 a judge to keep them behind bars while they await trial.

A lawyer for Gehrke declined to comment, and a lawyer for King did not immediately respond to an email from The Associated Press.

Authorities allege Gehrke and King, who got married this year, knew charges were coming and had been preparing to flee. At their home, authorities found a book titled, How To Disappear: Erase Your Digital Footprint, Leave False Trails, and Vanish Without a Trace, according to court papers. In one of their bags packed for their flight, there was a book titled Criminal Law Handbook: Know Your Rights, Survive The System, the papers say.

Gehrke and King lived lavishly off the scheme, prosecutors allege, citing in court papers luxury cars, a nearly $6m home and more than $520,000 in gold bars, coins and jewellery. Officials seized more than $52m from Gehrke’s personal and business bank accounts after her arrest, prosecutors say.

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

In another Arizona case, one woman is accused of billing the state’s Medicaid agency for substance abuse treatment services that did not serve any real purpose or were never provided, prosecutors say.

Another case alleges a scheme in Florida to distribute misbranded HIV drugs. Prosecutors say drugs were bought on the black market and resold to unsuspecting pharmacies, which then provided the medications to patients.

In some cases, patients were given bottles that contained different drugs than the label showed. One patient ended up unconscious for 24 hours after taking what he was led to believe was his HIV medication but was actually an antipsychotic drug, prosecutors say.