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TIL CreativesFederal agents uncover $10.6 billion Medicare scam in Operation Gold Rush, the largest health care fraud bust in US history
US federal agents launched Operation Gold Rush in the early months of 2023, a top-secret crackdown that would ultimately dismantle the largest health care fraud scheme in American history. Over two years of silent tracking and coordinated stings culminated in the exposure of a $10.6 billion conspiracy, one so vast that it touched over a million Medicare beneficiaries, impersonated thousands of doctors, and manipulated America鈥檚 largest health care safety net with chilling efficiency.Nineteen individuals have been charged, and more are expected. But the real legacy of Operation Gold Rush may be its playbook for how the government stopped fraud in its tracks, before the damage was done.How did the fraud take place?The criminal playbook was clear: purchase small, legitimate medical supply companies already enrolled in Medicare, then use them as shells to submit floods of fake claims for durable medical equipment, especially urinary catheters and glucose monitors. By acquiring over 30 such companies across the US, the perpetrators didn鈥檛 need to build a fraud operation from scratch. They bought one pre-approved, already inside the system.Live EventsFraudsters, primarily from Estonia, Russia, and Kazakhstan, submitted claims for inexpensive, low-scrutiny medical items. In one instance, over 1 billion urinary catheters were billed to Medicare, far more than the US could manufacture in that time.鈥淚 don鈥檛 even know if [the United States] has the ability to manufacture 1 billion catheters in such a short time,鈥 said Isaac Bledsoe, director of strategic projects and initiatives at the Department of Health and Human Services鈥 inspector general鈥檚 office, which helped lead the investigation along with the Justice Department and FBI. 鈥淭he absurdity, the brazenness of these actors is really just astounding.鈥漈he fraud ring didn鈥檛 just invent fake patients. Instead, they stole the identities of more than 1.2 million real Americans, often buying Medicare numbers on illicit marketplaces like Craigslist and LinkedIn. With those, they forged claims under real names, often using doctors鈥 identities without consent.How the operation was planned and executedAt the heart of Operation Gold Rush鈥檚 success was a fundamental shift in Medicare鈥檚 fraud defense strategy.Traditionally, the Centers for Medicare & Medicaid Services (CMS) followed a 鈥減ay and chase鈥 model: pay the claim, then investigate. But in early 2023, as anomalies in catheter billing volumes surged, CMS teamed up with the HHS Inspector General, the FBI, and the Justice Department, building real-time flagging systems and placing suspicious claims in escrow before payment.Isaac Bledsoe, director of strategic projects at HHS-OIG, called it a 鈥渕assive pivot.鈥濃淲e didn鈥檛 just catch them. We stopped the money before it moved. That鈥檚 the real win here,鈥 he said.The fraud teams used artificial intelligence, virtual private server tracing, subpoenaed bank trails, and even airport surveillance. Several conspirators were caught as they attempted to flee the US, while others were arrested abroad in cooperation with Estonian authorities.Tactical execution and surveillanceAgents executed undercover inspections, documented the interiors of supposed businesses, and found empty shelves, no supplies, no patients, just paperwork and billing terminals. One Kentucky office had billed Medicare for $667 million while visibly housing no medical equipment.US prosecutors later said some companies were run entirely by overseas actors who had never set foot in the United States. US-based office managers, hired online, were instructed only to collect mail and deposit checks.Over 400,000 Medicare beneficiaries filed complaints about being charged for products they never received. Over 7,000 physicians found their identities stolen to legitimize false prescriptions.Yet, despite the scale, federal agents froze over $5.5 billion in payments, allowing only a fraction to be withdrawn. The Justice Department unveiled the full extent of Operation Gold Rush on June 30, 2025, calling it a watershed moment in fraud enforcement. A new Health Care Fraud Data Fusion Center is now under development, designed to use AI and cloud analytics to detect fraud in real time, mirroring the success of this operation.鈥淎s the criminals get smarter, we get smarter,鈥 said Chris Schrank, HHS Deputy Inspector General. 鈥淥peration Gold Rush wasn鈥檛 just about stopping one scheme. It鈥檚 a new model for everything that comes next.鈥(You can now subscribe to our Economic Times WhatsApp channel)
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