Federal Agencies Intensify Crackdown on Welfare and Healthcare Fraud

Federal agencies have launched significant initiatives to combat fraud in welfare and health-care systems, a pressing issue for taxpayers. Recent investigations reveal extensive fraud schemes that siphon millions of dollars intended for vulnerable communities. A recent operation in the Greater Boston area exemplifies this heightened effort, with the US Secret Service leading a crackdown on electronic food stamp fraud.

During a three-day operation from September 23 to September 25, 2023, investigators confiscated 17 illegal card skimming devices from various businesses, averting an estimated fraud loss of $16.7 million to the government. The sweep involved over 700 businesses and targeted illegal payment-card skimming and Electronic Benefit Transfer (EBT) fraud. According to the US Secret Service, this type of fraud is increasingly prevalent, particularly harming the nation’s most vulnerable populations.

The statement from the Secret Service noted, “EBT fraud targets the nation’s most vulnerable communities. Each month, money is deposited into government assistance accounts intended to help families pay for food and other basic items.” Criminals exploit these systems by stealing card information and timing their fraudulent activities around monthly deposits.

The enforcement teams, comprising 12 Secret Service analysts, collaborated with local and state law enforcement agencies to search for and remove skimming devices from ATMs, gas pumps, and point-of-sale terminals. These illegal devices clone information from debit, credit, and EBT cards, leading to significant financial losses. The Secret Service estimates that skimming costs financial institutions and consumers over $1 billion annually.

In an effort to educate businesses about recognizing skimming devices, investigators provided information on identifying warning signs. They also advised consumers to be vigilant about card readers that appear loose, damaged, or otherwise suspicious. Using tap-to-pay technology or chip-enabled cards can further enhance security during transactions.

On the health-care front, the US Department of Justice has also ramped up efforts to tackle fraud. On September 23, the department announced the expansion of its Health Care Fraud Unit’s New England Strike Force into Boston. This initiative aims to enhance federal enforcement resources in one of the country’s key health-care and life sciences hubs.

The specialized prosecutors involved in this strike force will work closely with the FBI, IRS, and various federal and state agencies to expedite the detection and prosecution of complex fraud schemes. Last fiscal year, the US Attorney’s Office recovered over $450 million in funds obtained through fraudulent means, underscoring the scale of the problem.

Massachusetts US Attorney Leah Foley expressed confidence in the new partnership’s potential, stating that the office has been a national leader in health-care fraud enforcement. Foley noted, “The office has cracked down on fraud committed by pharmaceutical companies and medical device manufacturers, as well as unethical doctors and corporate executives who put greed ahead of patient safety.”

Recent cases highlight the serious nature of health-care fraud. In April, local emergency medicine physician Le Thu agreed to plead guilty to defrauding Medicare by submitting claims for genetic testing services that were never provided. This fraud resulted in approximately $35.5 million in claims, with Medicare paying out around $25.3 million based on falsified documentation.

According to Ted E. Docks, Special Agent in Charge of the FBI’s Boston Division, “Health-care fraud costs taxpayers tens of billions of dollars every year, whether it is through the unlawful diversion of federal program funds or powerful prescription drugs.”

Despite the scale of the bureaucracy dealing with welfare benefits and health-care services, the recent actions from federal and state agencies indicate a serious commitment to combating fraud. The combination of crackdown operations and enhanced investigative resources aims not only to recover lost funds but also to deter future fraudulent activities. These developments signal a proactive approach to safeguarding taxpayer dollars and ensuring that assistance reaches those who genuinely need it.