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FinCEN Issues Advisory on Health Care Fraud Schemes Targeting Medicare, Medicaid, and Other Federal and State Health Care Benefit Programs
The Financial Crimes Enforcement Network (FinCEN) issued an Advisory urging financial institutions to be vigilant about health care fraud schemes targeting government health care benefit programs such as Medicare and Medicaid. FinCEN’s Advisory provides financial institutions with an overview of how fraudsters, organized crime groups, and, increasingly, transnational criminal organizations are targeting government health care benefit programs. It also highlights money laundering typologies and red flag indicators to help financial institutions identify and report suspicious activity.
The fraudulent companies and individuals:
The Advisory highlights that fraudsters, including organized crime and increasingly transnational criminal organizations (TCOs), use newly formed or purchased “providers/suppliers” to obtain reimbursements and rapidly launder proceeds through the U.S. and international financial system.
As part of these schemes, illicit actors often use straw owners (including non-resident aliens and stolen identities of retired physicians) to establish shell companies to obfuscate their ultimate beneficial ownership and register the entities as health care providers and suppliers with health care benefit programs.
How it's laundered:
Once a claim is paid by an Automated Clearing House (ACH) deposit or, in limited cases, via paper check, the illicit actor then immediately launders the fraudulently obtained reimbursement through the U.S. and international financial systems. The laundering process can involve one or more of the following typologies:
- Wire transfers to bank accounts owned by individuals and shell companies under the illicit actor’s direct or indirect control, located inside or outside the United States;
- Wire transfers to U.S. virtual asset service providers (VASPs) for purchase of digital assets, which are then sent to unhosted wallets or to wallets held at foreign-located VASPs in jurisdictions with weak or non-existent Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) frameworks;
- Wire transfers to U.S. broker-dealers;
- Wire transfers to online betting platforms;
- Check deposits to money mule accounts at banks;
- Cash withdrawals through banks and money services businesses (MSBs), including check cashers; and
- Purchases of real estate, luxury goods, and high-value property in the United States or abroad.
The Advisory also highlights an additional 24 red flags.
Suspicious Activity Report (SAR) requirements:
Reference this advisory in SAR field 2 (Filing Institution Note to FinCEN) and in the SAR narrative using the key term: “HCF-2026-A001”
You can read the Treasury Press Release here or click below for the advisory.
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