Arizona Healthcare Fraud: Federal Criminal Defense Attorney

federal healthcare fraud

Healthcare fraud is making headlines with the recent Justice Department crackdown, charging nearly 200 individuals, including an Arizona couple, with false claims totaling $2.7 billion.


Commonly accused parties in healthcare fraud cases include doctors, nurse practitioners, and other healthcare professionals. They are often implicated in activities such as billing fraud, kickback schemes, and prescription fraud.


These cases are complex and involve severe penalties, making expert legal representation essential to protect the accused's rights.


Federal defense attorney Josh Kolsrud is well-equipped to defend against fraud charges. With extensive experience in federal criminal defense, Josh meticulously examines evidence, identifies weaknesses in the prosecution's case, and crafts strong defense strategies tailored to each client's situation.

In 2023, the DOJ's enforcement of the False Claims Act resulted in over $2.6 billion in recoveries, with $1.8 billion from the healthcare sector alone. These efforts are part of ongoing initiatives to hold accountable those who defraud federal healthcare programs like Medicare and Medicaid​

medical kickback scheme

What is HealthCare Fraud?

Healthcare fraud involves the deliberate submission of false or misleading information to obtain unauthorized benefits or payments from healthcare programs, both public and private.


This can include activities such as billing for services not provided, falsifying diagnoses to justify unnecessary tests or treatments, and accepting kickbacks for patient referrals.

federal vs state healthcare fraud

State Level Vs. Federal HealthCare Fraud

Healthcare fraud can be prosecuted at state and federal levels, with significant differences in scope, statutes, and potential penalties.


State Level Healthcare Fraud

  • Jurisdiction: In Arizona, healthcare fraud involving state programs such as AHCCCS is prosecuted under state law.
  • Relevant Statutes: A.R.S. § 13-2310 covers fraudulent schemes and practices, which can include AHCCCS fraud.
  • Penalties: State-level penalties may include fines, imprisonment, restitution, and professional sanctions. The severity of the penalties depends on the specifics of the fraud, including the amount of money involved and the defendant's criminal history.
  • Enforcement: State agencies, such as the Arizona Attorney General's Office, are responsible for investigating and prosecuting healthcare fraud at the state level.


Federal Healthcare Fraud

  • Jurisdiction: Federal healthcare fraud involves federal programs such as Medicare, Medicaid, Tricare, and federal workers' compensation.
  • Relevant Statutes: Federal healthcare fraud is governed by several laws, including the Anti-Kickback Statute, the Stark Law, and the False Claims Act.
  • Penalties: Federal penalties are typically more severe than state penalties and can include significant fines, lengthy prison sentences, and exclusion from federal healthcare programs. Convictions under the False Claims Act, for example, can result in treble damages and additional civil penalties.
  • Enforcement: Federal agencies, such as the Department of Justice (DOJ), the Office of Inspector General (OIG) for the Department of Health and Human Services (HHS), and the Federal Bureau of Investigation (FBI), are involved in investigating and prosecuting federal healthcare fraud.


Key Differences

  • Scope: Federal healthcare fraud cases generally involve larger sums of money and more complex schemes, often crossing state lines and involving multiple parties. State-level cases typically involve smaller amounts and more localized activities.
  • Investigative Resources: Federal agencies have more extensive resources and broader jurisdictional reach compared to state agencies, allowing them to handle large-scale and multi-state fraud operations more effectively.
  • Statutory Framework: The legal framework at the federal level is often more comprehensive, with specific statutes targeting various aspects of healthcare fraud, whereas state laws may be broader and less detailed.

Understanding the differences between state and federal healthcare fraud is important for anyone facing fraud accusations. The complexity and severity of charges can vary significantly depending on the jurisdiction.

Types of Federal HealthCare Fraud

Billing Fraud

Billing fraud involves the submission of false or inflated claims to federal healthcare programs such as Medicare and Medicaid. This can include


  • charging for services that were not provided,
  • using higher billing codes than appropriate (up-coding),
  • billing multiple times for the same service.
  • Phantom billing, where services are billed for non-existent patients or procedures, is also a common form of billing fraud.


  Eligibility Fraud

Eligibility fraud occurs when individuals provide false information to qualify for federal healthcare benefits. This might involve misrepresenting income, household size, or employment status to gain access to programs like Medicaid.


Kickback Schemes

Kickback schemes involve the exchange of money or other incentives for patient referrals or for the use of specific services or products. The Anti-Kickback Statute strictly prohibits such practices. Healthcare providers who engage in these schemes can face severe penalties, including fines and imprisonment.


Prescription Fraud

Prescription fraud includes forging or altering prescriptions, obtaining prescriptions under false pretenses, and "doctor shopping" to receive multiple prescriptions for controlled substances. 


Certification Errors

Certification errors frequently occur in the home care and hospice industries. Fraudulent certification involves falsely certifying a patient’s eligibility for services, often leading to unwarranted billing to federal healthcare programs. This practice is closely monitored by federal authorities due to its potential to drain significant resources from healthcare systems.


Violations of the False Claims Act

Under the False Claims Act, submitting inaccurate or false claims to federal healthcare programs is illegal. This includes


  • billing for services not provided,
  • inflating service costs,
  • and other deceptive practices.

Violations can result in severe penalties, including treble damages and additional fines, and can trigger comprehensive federal investigations into billing practices.

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Potential Penalties for Committing HealthCare Fraud

  • Fines and Restitution

    • Individuals convicted of federal healthcare fraud can face substantial fines, often determined by the amount defrauded.
    • Under the False Claims Act, violators may owe up to three times the government's damages plus additional penalties for each false claim. Courts also frequently order restitution, requiring repayment of the defrauded amounts..

  • Imprisonment

    • Convictions for federal healthcare fraud can result in significant prison sentences.
    • For example, violations under the False Claims Act or Anti-Kickback Statute can lead to up to 10 years of imprisonment per violation.
    • In cases where fraud results in serious injury or death, sentences can be even more severe, potentially including life imprisonment.

  • Professional Consequences

    Healthcare professionals convicted of fraud face severe professional repercussions, including:

    • Loss of medical licenses and certifications
    • Permanent or temporary exclusion from federal healthcare programs like Medicare and Medicaid
    • Damage to professional reputation and career prospects
  • Civil Penalties

    In addition to criminal penalties, civil actions can result in:

    • Substantial monetary fines
    • Civil suits under statutes like the False Claims Act
    • Injunctions and mandatory compliance programs
  • Exclusion from Federal Healthcare Programs

    • One of the harshest penalties is exclusion from federal healthcare programs.
    • This means that the individual or entity cannot bill for services provided to patients covered by Medicare, Medicaid, or other federal programs, which can severely impact their ability to operate within the healthcare industry.

  • Additional Penalties

    • Other possible penalties may include probation, community service, and mandatory compliance training.

Recent Crackdown on Healthcare Fraud

A recent nationwide sweep by the Justice Department has led to charges against nearly 200 individuals, including an Arizona couple, with false claims totaling $2.7 billion.


In June 2024, Attorney General Merrick Garland announced the charges, targeting doctors, nurse practitioners, and other healthcare professionals involved in various fraudulent schemes.


These scams ranged from submitting false claims to the unlawful distribution of controlled substances. Garland emphasized that regardless of one's status, whether a drug trafficker or a medical professional, those who profit from healthcare fraud will be held accountable.


A notable case in Arizona involved a $900 million fraud scheme targeting dying patients. Two owners of wound care companies, Alexandra Gehrke and Jeffrey King, were charged with accepting over $330 million in kickbacks to fraudulently bill Medicare for unnecessary amniotic wound grafts.


These grafts were applied to elderly patients, including those in hospice care, many of whom died shortly after the procedures. The couple lived lavishly off the scheme, owning luxury cars, a $6 million home, and significant amounts of gold and jewelry. They were arrested at the Phoenix airport while attempting to flee the country.


In this recent crackdown, authorities seized more than $230 million in cash, luxury cars, and other assets from those charged. The Justice Department's efforts aim to deter other potential fraudsters by demonstrating the severe consequences of healthcare fraud.

Frequently Asked Questions: Federal HealthCare Fraud

What is health care fraud?

Health care fraud involves the intentional deception or misrepresentation to obtain unauthorized benefits from health care programs. This can include billing for services not provided, up-coding, kickback schemes, and prescription fraud.


  Who is commonly charged with health care fraud?

Doctors, nurse practitioners, and other health care professionals are often charged with health care fraud. 



What are the penalties for health care fraud under federal law?

Penalties for health care fraud under federal law can include substantial fines, imprisonment, restitution, and exclusion from federal health care programs. The severity of penalties depends on the specifics of the fraud.


How can a fraud defense attorney help with health care fraud charges?

A fraud defense attorney can help by examining the evidence, identifying weaknesses in the prosecution's case, developing strong defense strategies, and representing you in court to ensure your rights are protected.


  What is the Arizona Health Care Cost Containment System (AHCCCS)?

The Arizona Health Care Cost Containment System (AHCCCS) is Arizona's Medicaid program, providing health care coverage to eligible Arizona residents. Fraud involving AHCCCS can include submitting false claims and providing inaccurate information to receive benefits.


What constitutes Medicaid fraud?

Medicaid fraud involves falsifying information or engaging in deceptive practices to obtain unauthorized benefits from Medicaid. This can include billing for services not provided, misrepresenting eligibility, and receiving kickbacks for patient referrals.


How does the prosecution prove health care fraud?

Prosecutors must prove that the defendant knowingly engaged in deceptive practices with the intent to defraud health care programs. This involves presenting evidence of false claims, fraudulent billing practices, or illegal kickback schemes.


What is white collar crime, and how does it relate to health care fraud?

White collar crime refers to financially motivated, non-violent crimes committed by individuals, businesses, or government officials. Health care fraud is a type of white collar crime involving deceptive practices to gain unauthorized health care benefits.


How long can an investigation into health care fraud take?

The duration of a health care fraud investigation can vary significantly, ranging from several months to years, depending on the complexity of the case, the amount of evidence, and the involvement of multiple parties.


Can health care fraud charges be dropped?

Health care fraud charges can be dropped if the defense can prove that there is insufficient evidence, lack of intent, or procedural errors in the investigation. A skilled fraud defense attorney can work to have charges reduced or dismissed.


What is the False Claims Act, and how does it relate to health care fraud?

The False Claims Act is a federal law that imposes liability on individuals and companies who defraud governmental programs. In the context of health care, it is used to prosecute fraudulent claims submitted to federal health care programs like Medicare and Medicaid.


How does the Anti-Kickback Statute affect health care professionals?

The Anti-Kickback Statute prohibits offering, paying, soliciting, or receiving any form of remuneration in return for referrals of services covered by federal health care programs. Violations can result in severe criminal and civil penalties.


  What is Stark Law, and what does it prohibit?

Stark Law, also known as the Physician Self-Referral Law, prohibits physicians from referring patients to entities with which they have a financial relationship for certain designated health services covered by Medicare and Medicaid, unless specific exceptions apply.


  Can health care providers be sued for fraud and abuse?

Yes, health care providers can be sued for fraud and abuse. These civil suits can result in substantial financial penalties, exclusion from federal health care programs, and damage to the provider's professional reputation.


What role do whistleblowers play in health care fraud cases?

Whistleblowers are critical in exposing health care fraud by reporting fraudulent activities to authorities. Under the False Claims Act, whistleblowers may receive a portion of the recovered funds as a reward for their information.


Contact a Federal Defense Attorney

If you face healthcare fraud charges, contact Josh Kolsrud of Kolsrud Law Offices, an expert in federal criminal defense.


With extensive experience in defending against complex fraud cases, Josh Kolsrud provides a thorough examination of evidence, identifies weaknesses in the prosecution's case, and develops strong defense strategies. 


For more details on how Josh Kolsrud can assist with your case, or to schedule a free initial consultation, you can contact him directly at the Kolsrud Law Offices. He is available via phone at (602) 638-3790.

An award-winning criminal defense attorney Since 2006

Why Choose Josh Kolsrud

With over 100 trials to his name, and years of experience as a state and federal prosecutor, Josh understands the law, the legal process, and your rights. Josh is also committed to representing every client with utmost integrity and dedication



Josh has prosecuted major crimes on the state and federal level, led a successful anti-human sex trafficking operation that saved lives, and argued before countless juries and justices for his clients



Josh is an expert in both Arizona and federal criminal law, and is ready to put that expertise to work for you.



As a prosecutor, Josh saw far too many defendants lose their livelihood due to poor representation. Josh will always give every client his complete attention and effort

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