The US Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) issued an Advisory urging financial institutions to be vigilant about fraud schemes targeting government healthcare benefit programs such as Medicare and Medicaid. This follows Secretary of the Treasury Scott Bessent’s trip to Minnesota earlier this year, where he announced numerous steps that Treasury is implementing to detect and stop government benefits fraud across the country. Separately, FinCEN issued a proposed rule paving the way to pay whistleblowers for actionable tips, further protecting the US financial system from illicit activity.
FinCEN’s Advisory highlights how TCOs exploit Federal and state healthcare benefit programs through complex schemes that file false and fraudulent claims for reimbursement, including nonexistent, exploitative, substandard, or unnecessary medical care. As part of these schemes, the TCOs send non-resident aliens into the United States to serve as straw owners of recently established or purchased healthcare providers or suppliers registered with Federal or state healthcare benefit programs. The TCOs illicitly obtain the names and identification numbers of beneficiaries enrolled in these programs, using that information to file false and fraudulent claims for reimbursement. This is often facilitated through kickbacks and bribes to complicit medical professionals. Once the claims are paid to the bank accounts owned by the shell companies, the TCOs launder the ill-gotten reimbursements through the US and international financial systems via wire transfers, digital assets, and other money laundering typologies—including the use of complicit insiders at financial institutions—ultimately for their personal enrichment abroad.