How Operation Gold Rush was planned and executed, which busted the largest health care fraud in US history

Time of India

01-07-2025

How did the fraud take place?
Live Events
How the operation was planned and executed
Tactical execution and surveillance
(You can now subscribe to our
(You can now subscribe to our Economic Times WhatsApp channel
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's 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.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't need to build a fraud operation from scratch. They bought one pre-approved, already inside the system.Fraudsters, 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.'I don't even know if [the United States] has the ability to manufacture 1 billion catheters in such a short time,' said Isaac Bledsoe, director of strategic projects and initiatives at the Department of Health and Human Services' inspector general's office, which helped lead the investigation along with the Justice Department and FBI . 'The absurdity, the brazenness of these actors is really just astounding.'The fraud ring didn't 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' identities without consent.At the heart of Operation Gold Rush's success was a fundamental shift in Medicare's fraud defense strategy.Traditionally, the Centers for Medicare & Medicaid Services (CMS) followed a 'pay and chase' 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 'massive pivot.''We didn't just catch them. We stopped the money before it moved. That's the real win here,' 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.Agents 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.'As the criminals get smarter, we get smarter,' said Chris Schrank, HHS Deputy Inspector General. 'Operation Gold Rush wasn't just about stopping one scheme. It's a new model for everything that comes next.'