Justice Department launches West Coast health-care fraud strike force and unveils $300 million grant program

Colin MacDonald, assistant attorney general for the Department of Justice's National Fraud Enforcement Division, announced the creation of a West Coast Health Care Fraud Strike Force and said the department will ‘‘find the spoils of your fraud, take it from you and give it back where it belongs with the American people.’’

MacDonald said the new regional strike force will be staffed by at least ten prosecutors from the Fraud Division’s Health Care Fraud section and will operate in close coordination with U.S. attorney’s offices, the FBI, DEA and the Department of Health and Human Services’ Office of Inspector General. He described a recently announced $300 million grant program that will allow state and local prosecutors to join the department’s effort.

"Where there are more agents and where there are more prosecutors, there is more fraud discovered, more fraud investigated, and more fraudsters put in prison," Craig Mesoarchean, the United States attorney for the Northern District of California, said, welcoming the strike force to the Bay Area and tying the expansion to local prosecutorial priorities.

Officials cited a series of large prior cases as evidence of the need for more resources. MacDonald referenced a prior prosecution that involved a $1.2 billion wound-graft scheme, seizures of ‘‘126 million in assets, including cash, luxury vehicles and gold bars,’’ and other high-dollar cases that prosecutors say victimized vulnerable patients and taxpayers. "Health care fraud steals from American taxpayers," MacDonald said, adding that fraud schemes also "put patients at risk."

Timothy Courchaine, U.S. Attorney for the District of Arizona, said the district’s demographics — including a large senior population and growing Medicaid caseloads — have produced widespread targets for fraudsters. He noted that his office has resolved cases "worth several hundred million dollars" this year and pointed to long prison terms secured in recent wound-care prosecutions.

Sejal Chadha, first assistant U.S. attorney for the District of Nevada, stressed Nevada’s vulnerability to hospice and behavioral-health fraud because of rapid population growth and an older population share, and cited roughly $94 million in recent indictments tied to wound-allograft cases.

In a question-and-answer session, officials told local reporters that some of the operations referred to in their remarks have occurred in the Bay Area and that active investigations are already underway. When asked how the frauds typically operate, officials said that schemes often involve billing for services that were not provided, false clinical documentation, kickbacks and other misrepresentations; they said data analytics are being used to identify anomalous billing patterns and investigative targets.

Department officials encouraged state and local prosecutors to apply for grant funding and to join joint investigations. MacDonald said the department’s new strike force will use ‘‘data analytics across district regional coordination and every available legal tool’’ to pursue cases, concluding the briefing with a warning: "And we will be knocking on your door soon."