Losses more than $1.62 billion in major US health fraud, Latest World News - The New Paper

Losses more than $1.62 billion in major US health fraud

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WASHINGTON One of the largest healthcare frauds in American history caused more than US$1.2 billion (S$1.62 billion) in losses after hundreds of thousands of patients were lured into the scheme, US investigators said, announcing charges against 24 people.

The alleged scheme involved the provision of wrist, knee and other braces to elderly and/or disabled patients who did not need them, but who were covered by the Medicare public insurance system.

They were lured by an international telemarketing network involving call centres in the Philippines and Latin America, the Department of Justice (DOJ) said.

The defendants allegedly paid doctors to prescribe the braces without meeting patients.

"Proceeds of the fraudulent scheme were allegedly laundered through international shell corporations and used to purchase exotic automobiles, yachts and luxury real estate in the United States and abroad," DOJ said in a statement.


Medicare got the bills, which allegedly reached more than US$1.7 billion in claims.

Those charged in the multi-state operation included CEOs and other executives with telemedicine companies, the owners of dozens of medical equipment firms, and doctors.

DOJ said the schemes involved "more than US$1.2 billion in loss".

Administrative penalties were also issued against 130 orthopaedic equipment suppliers, DOJ said.

"Today, one of the largest healthcare fraud schemes in US history came to an end," said Mr Robert Johnson, assistant director of the FBI, one of several agencies involved.

US Attorney Sherri Lydon, of South Carolina, added that white collar crime is not victimless.

"All taxpayers will endure the rising cost of healthcare premiums and out-of-pocket costs as a result of fraud on our Medicare system," Ms Lydon said. - AFP