AMARILLO, TX – On Friday, August 22, 2025, the Chicago U.S. Attorney’s Office issued the following press release:

Andrew S. Boutros, United States Attorney for the Northern District of Illinois, today announced publicly the creation of a new section within the Office’s Criminal Division dedicated to the prosecution of healthcare fraud, which is among the Department of Justice’s top fraud enforcement priorities and the first time the Office has created such a section.  The new Healthcare Fraud Section will consist of six federal prosecutors

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The work of this new section will be in addition to the healthcare fraud-related matters in this district that are being handled by the Healthcare Fraud Strike Force, which is part of the Fraud Section of the Department of Justice’s Criminal Division.

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The newly created Healthcare Fraud Section will be tasked with prosecuting defendants in all types of healthcare fraud, such as false and fraudulent claims submitted by transnational criminal organizations to America’s health insurance programs; upcoding and unbundling schemes; scams by providers and individuals against Medicare and Medicaid; fraudulent billing; and illegal kickbacks, among many other healthcare-related frauds and schemes.

“Every year, healthcare fraud causes billions of dollars in losses to the federal government and private insurers and siphons off hard-earned tax dollars meant to provide care for people in need,” said U.S. Attorney Boutros.  “Since becoming U.S. Attorney, my Office has charged nearly $2 billion in healthcare fraud schemes involving alleged criminal conduct that has stretched across the country, and even transnationally.  The newly created Healthcare Fraud Section that I’ve launched will bring greater focus, efficiency, and impact to our efforts in this important program area, which often involves the exploitation of patients through unnecessary and/or unsafe medical tests and procedures.”

U.S. Attorney Boutros continued, “In addition, under the direct leadership of our Section Chief and Deputy Chief, our Healthcare Fraud Section and its team of federal prosecutors will continue to closely coordinate and collaborate with the Healthcare Fraud Strike Force, which is part of the Fraud Section of the Department of Justice’s Criminal Division and has proven to be a highly effective and dynamic prosecutorial partner.  Healthcare providers, gatekeepers, and others who criminally cheat the system will be vigorously investigated, prosecuted, and punished under federal law and pursuant to the Department’s priorities.”

In announcing the new Section, U.S. Attorney Boutros acknowledged the cooperation and determination of the Office’s investigative partners, including the FBI, DEA, U.S. Department of Health and Human Services Office of Inspector General, U.S. Department of Labor’s Office of Inspector General, U.S. Food and Drug Administration, U.S. Postal Inspection Service, and other federal, state, and local agencies.

The newly created Healthcare Fraud Section will also strengthen coordination with the Health Care Fraud Unit of the Department of Justice Criminal Division’s Fraud Section, which has partnered with the U.S. Attorney’s Office in Chicago and other districts across the country to combat healthcare fraud.  Since March 2007, this program, currently comprised of nine strike forces operating in 27 federal districts, has charged more than 5,800 defendants who collectively have billed federal health care programs and private insurers more than $27 billion.  Recently, the Health Care Fraud Unit led and coordinated the National Health Care Fraud Takedown, which resulted in charges against more than 320 defendants nationwide for allegedly participating in various health care fraud schemes involving more than $14.6 billion in intended losses.  This was the largest national health care fraud enforcement action in Department of Justice history–and the largest ever in the Northern District of Illinois.

“FBI Chicago stands committed with our federal partners to find and prosecute all offenders who perpetrate fraud in our healthcare system and violate the trust of vulnerable people seeking care,” said Douglas S. DePodesta, Special Agent-in-Charge of the Chicago Field Office of the FBI.  “Together we are sending a clear message to those who steal from the U.S. taxpayers by committing healthcare fraud: you will be caught and you will face justice.”

Lessons for DME Suppliers
The Trump administration has stated its goal of aggressively pursuing health care fraud. Under the guise of “throwing the baby out with the bath water,” there will be health care providers (including DME suppliers) that have done nothing wrong…but are nevertheless targeted.

The press release references the Department of Justice’s (“DOJ’s”) Healthcare Fraud Strike Force that operates nationwide. The Strike Force has been in existence for years and it has brought criminal and civil cases against many providers/suppliers. The new Chicago Healthcare Fraud Section will coordinate with the Strike Force in focusing on healthcare fraud. It is likely that the Chicago Section will pursue providers/suppliers across state lines.

In fact, it is common for a fraud investigation to begin in e.g., Dallas, but then expand into other states. As Assistant U.S. Attorneys (“AUSAs”) and investigators “follow the facts,” the facts will often lead them into other states. The end result is that an AUSA in Dallas may lead a healthcare fraud investigation of providers/suppliers located in many states.

There are approximately 93 U.S. Attorneys Offices throughout the United States. All (or virtually all) of these offices coordinate with the Strike Force. And a number of U.S. Attorneys Offices have formally, or informally, opened their own healthcare fraud section.

The message for DME suppliers is that there is a spotlight on them. If a supplier is attempting to game the system, the supplier will be eventually “outed.” This can result from one or more of the following:

• The supplier is a new supplier that quickly starts submitting a large volume of claims for one product. The CMS contractor will flag the claims and conduct an audit. If the contractor determines that the facts are egregious, it will likely hand its findings over to the DOJ/OIG.
• The supplier is an existing supplier that begins providing a product it has not previously provided…and the supplier quickly ramps up the number of claims it submits for the product. The CMS contractor will flag the claims and conduct an audit. If the contractor determines that the facts are egregious, it will likely hand its findings over to the DOJ/OIG.
• The supplier is an existing supplier and has been providing a particular product at a fairly constant level. But the supplier then sharply ramps up the number of claims it submits for the product. The CMS contractor will flag the claims and conduct an audit. If the contractor determines that the facts are egregious, it will likely hand its findings over to the DOJ/OIG.
• The supplier submits a high volume of claims for a product that is on the government’s radar (e.g., CGMs, back braces). The CMS contractor will flag the claims and conduct an audit. If the contractor determines that the facts are egregious, it will likely hand its findings over to the DOJ/OIG.
• An employee of the supplier concludes that the supplier is engaged in fraudulent activities. The employee takes his/information to an attorney who specializes in filing qui tam (whistleblower) lawsuits. The employee files the whistleblower lawsuit. The lawsuit goes “under seal” and the AUSA conducts an investigation.
• A competitor concludes that the supplier is engaging in fraudulent activities. The competitor reaches out to a government enforcement agency (e.g., DOJ, OIG) and shares its information about the alleged fraudulent activities.

It is important that the DME supplier be legally compliant in all of its activities. If the supplier is not legally compliant, the odds are that such noncompliance will eventually make its way to a government enforcement agency.

Jeffrey S. Baird, JD, is chairman of the Health Care Group at Brown & Fortunato, PC, a law firm based in Texas with a national healthcare practice. He represents pharmacies, infusion companies, HME companies, manufacturers, and other healthcare providers throughout the United States. Baird is Board Certified in Health Law by the Texas Board of Legal Specialization and can be reached at (806) 345-6320 or [email protected].