Federal law enforcement officials Thursday announced indictments against two Ohio state employees and two co-conspirators in connection with an alleged $30 million Medicaid billing fraud scheme involving children’s behavioral health services that were never provided.
Speaking at a press conference in Ohio, acting Attorney General Todd Blanche said the Medicaid fraud case was among several unsealed over the past week targeting approximately $50 million in fraud, including a separate case involving a $1.4 million COVID-19 loan fraud scheme.
All four defendants turned themselves in to authorities this week, a source familiar with the investigation told CBS News.
Investigators seized 14 vehicles as part of the probe, including a Maserati, a Mercedes, a Bentley and a McLaren, the source said.
Fourteen luxury cars seized by authorities in a fraud investigation are seen in a photo combination provided by the Justice Department.
The defendants allegedly billed for therapeutic behavioral services and psychotherapy for children and young adults attending summer camps, church groups and recreational programs — services the government says were never actually delivered.
The alleged ringleaders diagnosed every recipient with a behavioral adjustment disorder — a tactic that allowed them to profit off vulnerable children, the source said. No assessment testing was ever conducted, the behavioral services never took place, and the children received no care whatsoever.
Participants were required to complete “intake packets” and supply their Medicaid recipient numbers, which are necessary to bill for services. A medical assessment was also required, but according to the source, the defendants never performed a single test.
Thursday’s announcement came from the Justice Department, state officials and other members of President Trump’s Task Force to Eliminate Fraud, led by Vice President JD Vance as part of a broader push to combat fraud against federal and state government programs.
A spokesperson for Vance called the Medicaid fraud allegations disgusting in a statement to CBS News.
“It is disgusting that fraudsters were allowed to deprive essential developmental services from American children in need,” the spokesperson said. “Countless lives could have been made better by the millions of tax dollars stolen, but instead they were used to purchase luxury cars. This is another example of the type of fraud the Vice President’s task force is putting a stop to.”
Republicans and Democrats have continued trading barbs over who bears responsibility for creating conditions that enable fraud — and who is doing more to address it.
CBS News has been investigating multiple forms of fraud for months. One investigation into hospice fraud examined the business and financial records of every hospice currently operating in Los Angeles County, applying the same indicators identified by state auditors as potential red flags for fraud. The analysis found that more than 700 of the roughly 1,800 hospices in Los Angeles County trigger multiple state-defined red flags for fraud.
Fraud in Minnesota has also drawn the Trump administration’s attention. CBS News investigated the state’s largest fraud scheme to date and interviewed the alleged mastermind, 45-year-old Aimee Bock.
In an exclusive jailhouse interview, Bock defended her conduct, expressed regrets and argued that state officials she worked with should share some of the blame. It marked the first time Bock spoke publicly since her arrest for her alleged role in what prosecutors describe as a $250 million COVID-era scheme to defraud a federal program designed to feed hungry children.
In a separate series of cases, the Justice Department secured indictments against several individuals accused of involvement in romance fraud schemes targeting older Americans on dating websites and social media platforms.
“It is the mission of this Department of Justice every single day to be relentless in the pursuit of law and order. Americans deserve to live free of violence and fraud,” said Blanche, whom President Trump was expected to formally nominate as permanent attorney general as soon as Thursday.
At the news conference, FBI Director Kash Patel unveiled a new list identifying what he called the “most wanted fraudsters.”
A poster from the FBI shows a group of people who the bureau says are the most wanted fugitives accused of fraud.
“It is live, officially on the FBI website,” he said. “I want all Americans to take a look at these most wanted individuals and look at the amounts — the tens of millions and billions of dollars in fraud that they have decimated our societies from.”
The Trump administration has focused on pursuing fraud targeting a range of government programs, including Medicaid, Medicare and small business loans.
As part of that effort, the Justice Department separately created a new National Fraud Enforcement Division, merging several department offices including its healthcare fraud section.
Colin McDonald, the assistant attorney general who leads the division, announced Thursday that his office and the Ohio secretary of state had signed a new data-sharing agreement giving the Justice Department access to corporate registration data.
“This data will be used in proactive data analysis to quickly identify ownership links between plants, labs, and billing entities that fraudsters use and hide behind to obscure control over healthcare fraud and other fraud schemes,” McDonald said.
At the same time, task force members Thursday accused some Democratic-led states of failing to crack down on fraud and cooperate with federal partners.
Federal Trade Commission Chairman Andrew Ferguson announced that the federal government was formally decertifying Hawaii’s Medicaid Fraud Control Unit, alleging it had received “millions and millions of dollars to fight fraud, and has consistently been one of the lowest performing fraud units in the country.”
“This morning, the inspector general, in coordination with the task force, exercised his statutory obligation to end the grants being paid to Hawaii to make sure that money that goes out the door to the states is going to actually fight fraud,” he said.
Hawaii’s Medicaid Fraud Control Unit pushed back Thursday in a statement: “We strongly disagree with any suggestion that Hawaiʻi has failed to take Medicaid fraud seriously. The Department will continue working to strengthen enforcement efforts, protect public resources, and ensure accountability for those who abuse the Medicaid program.”
“We recognize the seriousness of the HHS’s concerns and are treating this matter with the urgency it deserves,” the department said. “The Department has mobilized additional personnel and resources from across multiple divisions to conduct a comprehensive review of the findings, prepare a formal response, and pursue all available avenues to preserve and strengthen Hawaiʻi’s Medicaid fraud enforcement efforts. We intend to seek reconsideration of HHS’s decision and will continue working closely with our federal partners to address concerns and demonstrate the full scope of the Medicaid Fraud Control Unit’s work.”
Blanche also accused Minnesota of failing to cooperate.
“We’re seeing that in Minnesota,” he said, adding that Gov. Tim Walz claims to be working with the Justice Department. “The truth is, he’s suing us. He’s not cooperating with us, OK?”
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