New York Eastern District Federal Prosecutors announced on Monday (June 30) that 15 defendants have been indicted in a healthcare fraud case totaling a record-breaking $10.6 billion, marking the largest healthcare fraud scheme in history. This case is part of the nationwide crackdown on healthcare fraud in 2025, with one of the defendants, Chinese pharmacy owner Hong Yuen Mak (also known as Joe Mak), having pleaded guilty.
One of the operations under this case is codenamed “Operation Gold Rush”, involving 11 defendants linked to a massive fraud and money laundering network controlled by an international criminal group based in Russia and other regions. This group acquired durable medical equipment (DME) companies to steal identity information of over a million American citizens and fraudulently billed Medicare (the federal health insurance plan known as the Red-Blue Card) over $10.6 billion, resulting in nearly $900 million in profit.
According to the indictment, the organization acquired dozens of DME companies eligible to bill for medical insurance costs, using foreign nationals as nominees to execute these acquisitions and act as “nominal owners” of these companies in exchange for compensation. They then falsified company documents to make it appear as if they were controlled by the nominal owners while being actually operated by the organization’s foreign core members.
After gaining control of these companies, the organization rapidly submitted a large number of false and fraudulent claims to the healthcare insurance system. To achieve their goals, they stole identity and personal information from over a million Americans from all 50 states, including elderly and disabled individuals. Overall, the organization attempted to defraud over $10.6 billion in healthcare insurance reimbursement payments.
While the Department of Health and Human Services Office of Inspector General (HHS-OIG) and the Centers for Medicare & Medicaid Services successfully blocked most of the stolen funds, the scheme still led supplemental health insurance companies to pay around $900 million to DME companies, and Medicare paid around $41 million to DME.
Furthermore, the indictment states that the organization extensively abused the U.S. financial system for money laundering operations. They deposited checks and transferred funds within U.S. financial institutions, with illegal gains from the healthcare insurance system appearing to come from “legitimate sources,” making it easier to conceal.
To evade anti-money laundering checks by banks, the organization provided fake documents for nominal account holders, many of whom were illegally residing in the U.S., falsely indicating their control over the companies to hide the real beneficiaries. Additionally, opening accounts in the name of DME companies allowed the organization to disguise the origin of their funds as legitimate business income.
Once successful, the organization then transferred funds to shell companies and multiple overseas bank accounts in countries such as China, Singapore, Pakistan, Israel, Turkey, using cryptocurrencies to further conceal the flow of funds.
In order to evade law enforcement crackdown, the organization continuously adjusted its strategies: changing nominal owners, stealing new identities, acquiring new DME companies to replace those seized. They also utilized a large number of virtual private servers (VPS) to carry out fraudulent activities, effectively hiding the actual locations and network identities of their co-conspirators, expanding their global operation scale.
As part of “Operation Gold Rush,” four defendants have been apprehended in Estonia, with U.S. authorities seeking extradition, while seven individuals remain at large. Authorities have seized approximately $27.7 million in assets and are continuing to track funds flowing to China, Singapore, Turkey, and other locations.
In addition, a joint investigation into healthcare fraud cases involving multiple states has resulted in four defendants being charged. Among them, a pharmacy owner from Brooklyn, Joe Mak, stands accused of conspiring with accomplices to distribute gift cards to customers in exchange for swiping cards for non-prescription Medicare (OTC) products to fraudulently collect over $1 million. The 40-year-old Mak has pleaded guilty and will face further sentencing.
The Justice Department emphasized that this case highlights the serious damage healthcare fraud causes to U.S. medical resources and taxpayers and reiterated its commitment to collaborating with law enforcement agencies globally to combat such international crimes.