Investigators say they’ve linked to the group more than 400,000 complaints from people who received notice of equipment ordered in their names, prescribed by doctors they’d never visited, and issued from businesses they’d never heard of.
Though Medicare was able to flag many of the improper benefit claims before they were paid out, the indictment says, the group still managed to collect nearly US$1b in illegal proceeds over three years.
Court records describe the 11 defendants as citizens from countries including Russia, Estonia and the Czech Republic.
They face charges of conspiracy, healthcare fraud and money laundering that could send them to prison for years. It was not clear from public court dockets whether any of them had retained or been assigned lawyers.
The Washington Post revealed the existence of the federal investigation last year and noted that authorities had zeroed in on claims submitted by seven companies operating out of Connecticut, Florida, Kentucky, New York and Texas that were believed to be behind a surge of bills submitted to Medicare for catheters across the prior two years.
Though many of the businesses were accredited to work with Medicare, allowing them to bill the health insurance programme, in some cases the accreditation was linked to a person who had since left the company.
A Washington Post examination of state and federal records found links among the businesses, such as a matching address and offices listed at multiple organisations.
Six of the seven companies had critical reviews on Yelp, the Better Business Bureau, Facebook or other sites complaining of Medicare fraud involving catheters.
Among those charged was Imam Nakhmatullaev, who the indictment described as a Russia-based top supervisor of the organisation.
The indictment accuses him and others of recruiting people to serve as owners of the medical equipment companies through which the group allegedly perpetuated its fraud.
He and others are also accused in the indictment of using encrypted messaging apps to direct others on how to move the proceeds of fraudulent billing through shell companies to overseas bank accounts in countries like China, Singapore, Pakistan, Israel and Turkey.
Prosecutors say Nakhmatullaev and the organisation’s other conspirators singled out the medical equipment business at the heart of their scheme because of their pre-existing clearances to bill Medicare and supplemental insurance companies.
After gaining control of the companies, the organisation allegedly installed new owners to perpetuate the fraudulent billings - many of whom were foreign nationals not lawfully present in the US, the indictment said.
As the Centres for Medicare and Medicaid Services began to catch on to a large number of billings emerging from companies now linked to the group, the organisation’s leaders allegedly instructed those owners to flee the country and installed new ones.
It was unclear whether any of those charged had been taken into custody.
A spokesperson for the US Attorney’s office for the Eastern District of New York did not immediately return requests for comment.
- Lauren Weber and Dan Keating contributed to this report.
