National Health Care Fraud Takedown Explained: Charges, Penalties, and Defense Options

Vikas Bajaj, Attorney at Law · Last reviewed: October 31, 2026

On June 30, 2025, the Justice Department announced its 2025 National Health Care Fraud Takedown, which it described as resulting in “criminal charges against 324 defendants, including 96 doctors, nurse practitioners, pharmacists, and other licensed medical professionals, in 50 federal districts and 12 State Attorneys General’s Offices,” involving “over $14.6 billion in intended loss” (DOJ press release).

What the Department of Justice Announced

• The government “seized over $245 million in cash, luxury vehicles, cryptocurrency, and other assets” (DOJ).
• CMS “prevented over $4 billion from being paid in response to false and fraudulent claims” and “suspended or revoked the billing privileges of 205 providers” before the Takedown (DOJ; payment suspension rules at 42 C.F.R. § 405.371).
• The Takedown was “led and coordinated by the Health Care Fraud Unit” of the Criminal Division’s Fraud Section with U.S. Attorneys’ Offices, HHS-OIG, the FBI and the DEA (DOJ; Health Care Fraud Unit).
• Telemedicine and genetic testing schemes accounted for 49 defendants and “over $1.17 billion in allegedly fraudulent claims to Medicare” (DOJ).
• 74 defendants were charged in connection with “the alleged illegal diversion of over 15 million pills of prescription opioids and other controlled substances” (DOJ; 21 U.S.C. § 841).
• 29 defendants were charged “for their roles in transnational criminal organizations alleged to have submitted over $12 billion in fraudulent claims” (DOJ).
• 170 other defendants were charged in schemes involving “over $1.84 billion in allegedly false and fraudulent claims” for services that were “medically unnecessary, provided in connection with kickbacks and bribes, or never provided at all” (DOJ; 42 U.S.C. § 1320a-7b(b)).
• Civil charges against 20 defendants and civil settlements with 106 defendants totaling $34.3 million were announced at the same time (DOJ; 31 U.S.C. § 3729).

The same release states: “An indictment, information, or complaint is merely an allegation. All defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law” (DOJ; see In re Winship, 397 U.S. 358 (1970)).

The Federal Laws Behind Health Care Fraud Takedown Charges

In court, each defendant faces specific statutes, such as 18 U.S.C. § 1347, with elements the government must prove.

• Health care fraud, 18 U.S.C. § 1347. The government must prove the person knowingly and willfully executed, or attempted to execute, a scheme to defraud a health care benefit program, or to obtain its money by false or fraudulent pretenses, in connection with the delivery of or payment for health care benefits, items, or services. The maximum is 10 years, rising to 20 years if the violation results in serious bodily injury and up to life if it results in death. The statute says the government does not need to prove the person knew of § 1347 itself or specifically intended to violate it, but it must still prove a knowing and willful scheme.
• “Health care benefit program” is broad. Under 18 U.S.C. § 24(b), it covers any public or private plan or contract affecting commerce that provides medical benefits, items, or services. Private insurers count, not only Medicare and Medi-Cal.
• Conspiracy, 18 U.S.C. § 1349. An attempt or conspiracy to commit a Chapter 63 fraud offense carries the same penalties as the completed offense.
• False statements in health care matters, 18 U.S.C. § 1035. Knowingly and willfully falsifying or concealing a material fact, or making a materially false statement or document, in connection with health care benefits or payment carries up to five years.
• Anti-Kickback Statute, 42 U.S.C. § 1320a-7b(b). Knowingly and willfully offering, paying, soliciting, or receiving any remuneration to induce or reward referrals, or the ordering of items or services, payable by a Federal health care program is a felony with a maximum fine of $100,000 and up to 10 years in prison. As with § 1347, actual knowledge of the statute is not required (§ 1320a-7b(h)). Whether a payment fits a regulatory safe harbor is often a central issue.

How Sentencing Is Calculated in Health Care Fraud Cases

Most of these offenses are sentenced under U.S. Sentencing Guidelines §2B1.1, where the offense level rises with the amount of loss. Under the guideline, loss is the greater of actual loss or intended loss. Two health-care-specific rules matter:

• When a person is convicted of a federal health care offense involving a government health care program, the total of the fraudulent bills submitted is prima facie evidence of intended loss, meaning it is enough to establish intended loss unless the defense rebuts it. Showing which claims were medically necessary, properly documented, or actually paid can change the number substantially. (USSG §2B1.1, comment. (n.3(F)(viii)))
• The same convictions add 2, 3, or 4 offense levels when the loss to the government program exceeds $1 million, $7 million, or $20 million (§2B1.1(b)(7)).

The guidelines are one factor. The judge must also weigh the person’s history and characteristics and the other factors in 18 U.S.C. § 3553(a).

Consequences Beyond the Criminal Case

A conviction for a program-related crime triggers mandatory exclusion from Medicare, Medicaid, and other Federal health care programs, and the minimum exclusion period is five years (42 U.S.C. § 1320a-7(a) and (c)(3)(B)). For a physician, pharmacist, or clinic owner, that exclusion can matter as much as the sentence, so plea terms have to be evaluated with it in mind.

If You Receive a Subpoena or a Visit From Agents

• In federal health care offense investigations, the Attorney General can issue administrative subpoenas for records under 18 U.S.C. § 3486. Calendar the return date, and do not produce or withhold records without legal review.
• Preserve everything. Altering or destroying records with intent to obstruct a federal investigation carries up to 20 years under 18 U.S.C. § 1519.
• Staff and owners may be asked for interviews. A materially false statement to a federal agent can be charged on its own under 18 U.S.C. § 1001. It is appropriate to say that counsel will respond.

Vikas Bajaj has practiced criminal defense in California since 2001 and handles federal cases in San Diego. For more on how he approaches these investigations, see the San Diego health care fraud defense page, the federal crimes defense page, and the guide on how pharmacies detect prescription drug fraud.

This article is general information, not legal advice, and does not create an attorney-client relationship. Every case depends on its own facts, and no outcome can be promised.

Takedown charges explained: statutes, penalties and process, with sources

Sources are linked inline to the statute, rule, court or agency that states each point.

The statutes

The statutory text quoted above is discussed further on our health care fraud page (18 U.S.C. § 1347).

• 18 U.S.C. § 1349 makes attempt or conspiracy “subject to the same penalties as those prescribed for the offense.”

Recognized defenses

The statutes (18 U.S.C. § 1347; 42 U.S.C. § 1320a-7b(b)) require proof that the conduct was “knowingly and willfully” done, so good-faith billing, reliance on guidance, and disputes over medical necessity or the amount of loss go to the elements and to the §2B1.1 calculation.

How the case moves in the Southern District of California

From the first appearance before a magistrate judge to sentencing, a health care fraud prosecution in federal court here follows the Federal Rules of Criminal Procedure (Fed. R. Crim. P. 5); our San Diego federal criminal defense overview walks through each step and where the hearings take place.

Contact the office to talk with Vikas Bajaj about a health care fraud investigation or charge.