Massive Medicare Fraud Scheme Uncovered in Brooklyn

News Summary

Federal prosecutors have charged 11 individuals in a major Medicare fraud scheme that involved stealing identities and submitting over $10 billion in fraudulent claims. Kevin Valdhans, owner of G&I Ortho Supply, is accused of orchestrating this extensive operation while exploiting the Medicare system, leading to identity theft for over a million Americans. Authorities indicate that this fraud network persisted until September 2024 and involved billing for products that beneficiaries never ordered. This operation raises urgent concerns about the need for stronger oversight within Medicare to protect legitimate beneficiaries.

Brooklyn, NY – In one of the largest Medicare fraud operations uncovered to date, federal prosecutors have charged 11 individuals in connection with a scheme that reportedly involved stealing identities and submitting over $10 billion in fraudulent claims to Medicare. Central to this operation is Kevin Valdhans, the owner of G&I Ortho Supply, who is accused of orchestrating one of the most extensive fraud networks in U.S. history.

The indictment alleges that Valdhans and his associates collected taxpayer dollars for catheters billed under the names of Medicare beneficiaries who never actually ordered the products. This fraudulent activity exploited the Medicare system, leading to the theft of identities of over one million Americans.

According to investigators, Valdhans purchased G&I Ortho Supply using a fraudulent Texas ID. Allegations against him highlight that, shortly after acquiring the business, he billed Medicare $7 million for catheters in a single week. Furthermore, Valdhans supposedly is part of an Eastern European criminal organization that has acquired more than 30 legitimate companies to facilitate these fraud schemes.

The Scope of the Fraud

In total, the organization submitted approximately $10.6 billion in fraudulent claims and received around $41 million from Medicare, as well as an estimated $900 million from Medicare Supplemental Insurers. The illicit operation reportedly persisted until September 2024. Eight of the individuals indicted are Estonian citizens, while one is a U.S. citizen, and Valdhans is a national of the Czech Republic.

Investigative Findings

The extensive fraud network became a focus of federal investigations after CBS News New York aired reports concerning complaints about Valdhans and G&I Ortho Supply as early as the previous year. Investigative reporter Tim McNicholas found that there were numerous claims made against a Queens business that shared a similar fraudulent billing pattern, with allegations dating back to the same month the report aired.

The fraudulent claims involved billing Medicare for medical equipment that beneficiaries did not request, showcasing a systematic abuse of the Medicare system. Other complaints relating to the Queens business involved recent fraud claims, indicating a potential continuing risk to the Medicare program.

Background Context

This operation is particularly alarming given the significant impact such fraud can have on Medicare’s resources, potentially jeopardizing care for legitimate beneficiaries. The Medicare system relies on the honesty of providers and the cooperation of patients to ensure that funds are reserved for those who truly require medical assistance. The revelation of this scheme adds urgency to calls for stronger oversight and improved safeguards within the Medicare program to prevent future abuses.

As this case continues to unfold, federal authorities are likely to employ various strategies to combat similar fraudulent activities in the future, reinforcing the importance of regulatory vigilance. This major bust serves as a warning that systemic abuses can lead to severe legal repercussions for those who attempt to defraud the healthcare system.

Deeper Dive: News & Info About This Topic

HERE Resources

Massive Medicare Fraud Scheme Uncovered in New York
Queens Company Under Investigation for Medicare Fraud

Additional Resources

• CBS News: Medicare Fraud Bust
• Wikipedia: Medicare
• New York Times: Medicare Fraud Charges
• Google Search: Medicare Fraud
• CBS News Video: Medicare Fraud Bust
• Encyclopedia Britannica: Health Care
• Hoodline: Brooklyn Business Owner Indicted
• Google News: Brooklyn Medicare Fraud