US charges 11 people in Russia-based scheme to bilk Medicare of $10bn

On Friday, U.S. federal prosecutors announced the indictment of 11 individuals involved in a sophisticated scheme that defrauded Medicare, the national health insurance program for the elderly and disabled, out of an estimated $10.6 billion. The defendants are part of a transnational criminal organization that executed a multi-billion-dollar healthcare fraud and money laundering operation. This operation involved the acquisition of numerous medical equipment companies, which had been legitimate prior to the takeover, and utilized these entities to submit fraudulent billing claims for expensive medical devices that were never actually provided. The indictment, dated June 18, highlights that over one million Medicare recipients had their personal information stolen and exploited by the defendants to file false claims, leading to significant financial losses for both Medicare and supplemental insurers. Prosecutors noted that Medicare alone paid approximately $41 million as a result of these fraudulent submissions, while supplemental insurers are estimated to have disbursed an additional $900 million between the years 2022 and 2024.

The orchestrator of this elaborate scheme, Imam Nakhmatullaev, is based in Russia and is reported to have managed a network of co-defendants located in various countries including Estonia, the Czech Republic, and the United States. The scheme came to light after numerous Americans raised alarms regarding their Medicare accounts, reporting they received explanation of benefits forms for medical equipment they had neither ordered nor received. These alerts prompted further investigation into the fraudulent activities. The organization reportedly laundered its illicit proceeds through a network of shell companies and bank accounts in various countries, including Singapore, Pakistan, and Israel, using cryptocurrency to obscure the origins of the funds. This case underscores the ongoing challenges faced by Medicare and other health insurance programs in combating fraud and protecting the personal information of beneficiaries against malicious exploitation.