By Ethan Faverino |
The U.S. Department of Justice has formed the West Coast Healthcare Fraud Strike Force, a new multi-district initiative targeting the significant rise in healthcare fraud across Arizona, California, and Nevada. The effort unites federal prosecutors with law enforcement partners to protect Arizona taxpayers, patients, and legitimate healthcare services from sophisticated fraud networks.
Assistant Attorney General Colin McDonald of the DOJ’s Fraud Division cited data showing sharp increases in fraud activity in the three states. “The Fraud Division is committed to bringing that same relentless, data-driven prosecutorial force to bear across every corner of this region,” said McDonald, “making unmistakably clear that no scheme is too sophisticated, no network too large or small, and no fraudster too distant to escape federal accountability.”
Arizona has been particularly hard-hit and is already on the front lines of enforcement. U.S. Attorney Timothy Courchaine for the District of Arizona noted that federal law enforcement and his office have already disrupted fraud schemes worth over a billion dollars of taxpayer money in the state. “Our mission as part of the West Coast Health Care Fraud Strike Force is to ensure Americans who need critical services are not used as pawns to make bad actors rich,” Courchaine stated. “Through excellent investigations, trial work, and seizures of ill-gotten gains, the District of Arizona will continue safeguarding those services.”
Arizona Attorney General Kris Mayes told The Center Square, “Arizona has been on the front lines of fighting Medicaid fraud for the past several years, and we welcome the federal government’s help in combatting this problem.” Mayes also highlighted that since 2023, her office has indicted 166 individuals and entities and recovered or seized more than $139 million in cash and assets.
Recent Arizona cases underscore the scale of the threat. In one scheme, Farrukh Jarar Ali, a 41 year old Pakistan-based operator, was charged with conspiracy to commit healthcare fraud and related offenses after allegedly submitting approximately $650 million in false and fraudulent claims to Arizona’s Medicaid program (AHCCCS) through at least 41 substance abuse treatment clinics.
Many patients were recruited from homeless populations or Native American reservations, and clinics often provided little or no legitimate care. AHCCCS paid out roughly $564 million before the scene was uncovered. Ali personally received about $24.5 million and used some proceeds to purchase luxury real estate in Dubai.
In another prosecution, Phoenix residents Alexandra Gehrke and her husband Jeffery King were sentenced to 15.5 years and 14 years in prison, for orchestrating a massive wound graft fraud scheme. Between November 2022 and May 2024, they and co-conspirators submitted over $1.2 billion in false or fraudulent claims to Medicare and other insurers for medically unnecessary bioengineered skin substitutes applied to elderly and terminally ill patients — often through illegal kickbacks and regardless of medical need.
Federal programs paid out nearly $615 million. Authorities seized substantial assets from the couple, including $97 million from bank accounts, luxury vehicles, life insurance annuities, cash, and gold and silver.
Mayes also referenced a prior $2.5 billion Medicaid fraud scheme involving fraudulent sober living homes targeting Native Americans, from which the state recovered only about 5% of losses. Her office has since launched a $6 million grant program to assist affected tribal nations.
The new Strike Force builds on these successes and addresses emerging threats identified by Scott Lampert, Acting Deputy Inspector General for Investigations at the U.S. Department of Health and Human Services. Lampert pointed to “sham operations designed to appear legitimate while exploiting patients and inflating claims through increasingly sophisticated methods.”
Ethan Faverino is a reporter for AZ Free News. You can send him news tips using this link.
