Chicago Federal Prosecutors Uncover Massive Medicare Fraud Schemes Totaling Over $1 Billion
Federal prosecutors based in Chicago have brought charges against several foreign nationals for allegedly orchestrating extensive Medicare and health insurance fraud operations. These sophisticated schemes are accused of siphoning more than $1 billion from United States government programs and private insurance providers. The fraudulent activities involved billing for medical equipment and diagnostic tests that were never actually delivered to patients, exploiting systemic vulnerabilities in the healthcare reimbursement infrastructure.
Shell Companies and Stolen Data Fuel Elaborate Fraud Networks
Court filings reveal a complex web of deception, including the use of shell companies, vacant office spaces, and fabricated claims for items such as glucose monitors, catheters, and various diagnostic tests. Investigators highlight that these operations heavily relied on stolen patient data to submit false bills, taking advantage of weaknesses within the Medicare system's oversight mechanisms. The scale and coordination of these frauds underscore significant challenges in safeguarding public health funds against international criminal enterprises.
First Case: Anuar Abdrakhmanov and the $666 Million Priority One Scam
In the initial case, prosecutors have charged Anuar Abdrakhmanov, a citizen of Kazakhstan, with conspiracy to launder money connected to Medicare fraud. According to court documents, Abdrakhmanov acquired a legitimate medical supply company based in Kentucky, known as Priority One Medical Equipment. He allegedly utilized this entity to submit approximately $666 million in fraudulent Medicare claims between March and August 2024.
Abdrakhmanov entered the United States on a summer work visa in May 2023, which expired just four months later, yet he remained in the country unlawfully. He became a member and manager of Priority One in April 2024 after purchasing the company from its previous owner. During his tenure, Medicare received around 250 complaints from patients who reported never receiving the billed medical equipment. Investigators further discovered that six Medicare beneficiaries in Illinois neither requested nor received glucose monitors or catheters and did not suffer from diabetes, highlighting the brazen nature of the false claims.
When authorities visited Priority One's Kentucky office in July 2024, they found it completely empty and non-operational. Employees informed investigators that their sole responsibility was to collect mail and transmit photographs of it via the encrypted messaging app Telegram to an anonymous supervisor they had never met. Financial records indicate that checks were dispatched by FedEx to Chicago suburbs, including one misplaced $1 million cheque that was later recovered, with the worker receiving a $2,000 bonus for handling the situation.
Although Medicare suspended payments upon detecting irregularities, Medigap insurers reportedly paid at least $450,000 before the fraud was uncovered. Prosecutors allege that Abdrakhmanov subsequently wired about $182,000 to Hong Kong and attempted to transfer over $200,000 to other foreign bank accounts, suggesting efforts to move illicit proceeds internationally.
Second Case: Tair Smagul and the $953 Million Catheter Fraud
A second case involves another Kazakhstan national, Tair Smagul, who resided in Chicago and is accused of money laundering linked to a separate Medicare fraud scheme. Prosecutors contend that Smagul controlled Connecticut-based Medical Home Care Inc and participated in a nationwide operation that billed nearly $953 million for catheters that were frequently unnecessary or never delivered to patients.
Medicare reportedly received over 27,000 complaints concerning Medical Home Care, indicating widespread patient dissatisfaction and suspicion. Patients interviewed by investigators confirmed they never received any medical supplies, and physicians listed as having prescribed the equipment denied ever authorizing such orders, further exposing the fraudulent nature of the billing practices.
Third Case: Burhan Mirza and Kashif Iqbal's $10 Million Diagnostic Test Scam
In a third distinct case, prosecutors have charged Pakistani nationals Burhan Mirza and Kashif Iqbal with orchestrating a $10 million fraud involving diagnostic tests and medical equipment. Mirza allegedly operated a business in Pakistan, while Iqbal lived in Texas and collaborated with US-based accomplices to submit false claims using stolen patient information.
Prosecutors assert that millions of dollars were funneled through shell companies with fabricated names, obscuring the trail of illicit funds. Iqbal faces additional accusations of lying to federal investigators about his involvement in the scheme, compounding the legal challenges against him.
Broader Implications for Healthcare Fraud Prevention
These cases collectively highlight persistent vulnerabilities in the Medicare and private insurance systems that enable large-scale fraud. The involvement of foreign nationals and international money transfers points to the global dimensions of healthcare fraud, necessitating enhanced cross-border cooperation and stricter regulatory oversight. As authorities continue to investigate, these prosecutions serve as a stark reminder of the ongoing battle to protect public health funds from sophisticated criminal networks.
