New York Healthcare Fraud Conspiracy Charges: What to Know

If you or someone you know is under investigation for health care fraud in New York, consult a criminal defense attorney before speaking with investigators. Statements to investigators can be used by the government. Health care fraud is a major federal enforcement area: DOJ’s Health Care Fraud Section prosecutes complex matters nationwide and works with agencies including HHS-OIG and the FBI, and the FBI is the primary investigative agency for health care fraud involving federal and private insurance programs. Investigations may involve data analysis, records, cooperating witnesses, and other investigative techniques. A grand-jury subpoena signals a federal grand-jury inquiry, but it does not by itself establish that the recipient is a target or that investigators have assembled a substantial case. This article explains common forms of health care fraud, conspiracy charges, the government’s burden, and available defenses. DOJ health care fraud guidance

What Is Healthcare Fraud Under Federal Law?

Federal healthcare fraud is prosecuted primarily under 18 U.S.C. § 1347, which makes it a crime to knowingly and willfully execute — or attempt to execute — a scheme to defraud any healthcare benefit program, or to obtain money or property from any healthcare benefit program by means of false or fraudulent pretenses.
Healthcare benefit programs include Medicare, Medicaid, TRICARE (military health coverage), CHIP (Children’s Health Insurance Program), private insurance, and other public or private health plans. A conviction under 18 U.S.C. § 1347 carries up to 10 years in federal prison per count. If the fraud results in serious bodily injury, that increases to 20 years. If a patient dies as a result, the penalty can reach life imprisonment. A conspiracy to commit healthcare fraud under 18 U.S.C. § 1349 carries the same maximum penalties as the underlying fraud itself — up to 10 years, 20 years, or life, depending on the harm caused.

Common Types of Healthcare and Medical Fraud in New York

Healthcare fraud takes many forms. Federal prosecutors pursue all of them aggressively. Below are the most frequently charged types of medical fraud in New York federal courts.

1. Billing Fraud (False Claims)

Billing fraud — also called false claims — involves submitting claims to Medicare, Medicaid, or private insurers for services that were never rendered, were medically unnecessary, or do not match what was actually provided to the patient. This is the most common form of healthcare fraud and may be prosecuted criminally under 18 U.S.C. § 1347 and may also lead to civil liability under the False Claims Act (31 U.S.C. § 3729). Examples include billing for 60-minute therapy sessions that lasted 15 minutes, billing for expensive brand-name medications while dispensing generics, and charging for surgeries or procedures that never took place.

2. Upcoding

Upcoding occurs when a provider submits a billing code that represents a more expensive service than the one actually provided. For example, a physician who performs a routine office visit but bills for a complex consultation is upcoding. Even small, repeated instances of upcoding across thousands of patients can amount to millions of dollars in fraudulent claims — and result in federal charges.

3. Unbundling

Unbundling involves separating services that should be billed together under a single billing code and submitting them as multiple separate claims in order to collect higher reimbursements. Insurance companies and government programs have rules that require certain services to be bundled. Deliberately separating them to inflate payment constitutes fraud.

4. Illegal Kickbacks

The Anti-Kickback Statute (42 U.S.C. § 1320a-7b) prohibits offering, paying, soliciting, or receiving anything of value in exchange for referrals of patients covered by federal healthcare programs. Kickbacks can take many forms: cash payments, free office space, shares in a business, excessive compensation, or lavish gifts to physicians who refer patients. Violation of the Anti-Kickback Statute is a felony carrying up to 10 years in prison per count, plus exclusion from all federal healthcare programs.

5. Phantom Patients and Ghost Billing

Phantom billing involves submitting claims for patients who do not exist, patients who never received care, or deceased individuals whose insurance information was stolen. This is often part of organized fraud rings that operate across multiple clinics or pharmacies and frequently gives rise to conspiracy charges.

6. Identity Theft and Patient Brokering

Some healthcare fraud schemes involve stealing patient insurance information and using it to bill for services. Others involve paying recruiters — often called ‘patient brokers’ or ‘cappers’ — to recruit Medicare or Medicaid beneficiaries for unnecessary services so the provider can bill their insurance. Both schemes are federal crimes.

7. Pharmacy Fraud

Pharmacy fraud includes dispensing lower-cost drugs while billing for more expensive ones, billing for prescriptions never filled, dispensing controlled substances without a valid prescription, and operating pill mills that write prescriptions in exchange for cash. New York federal courts have seen significant pharmacy fraud prosecutions in recent years, with sentences ranging from years to over a decade in prison.

8. Durable Medical Equipment (DME) Fraud

DME fraud involves billing Medicare or Medicaid for medical equipment — wheelchairs, back braces, orthopedic supports, CPAP machines — that patients did not need, did not request, or never received. Many DME fraud cases involve corrupt physicians who sign prescriptions without examining patients, or suppliers who fabricate medical necessity documentation.

9. Home Health Fraud

Home health fraud is a frequent federal enforcement focus and involves billing Medicare for home health services — nursing visits, physical therapy, aide services — that were not provided or were not medically necessary.

10. Mental Health and Substance Abuse Billing Fraud

Mental health and substance abuse treatment centers have been increasingly targeted by federal prosecutors for billing fraud. Common schemes include billing for group therapy sessions that were actually unsupervised, inflating the number of sessions provided, billing for patients who relapsed and never attended treatment, and submitting claims for licensed therapist services when unlicensed staff provided care.

Healthcare Fraud Conspiracy: Why the Conspiracy Charge Changes Everything

One of the most powerful tools prosecutors use in healthcare fraud cases is the conspiracy charge under 18 U.S.C. § 371 or the specific healthcare fraud conspiracy statute. A conspiracy charge means that two or more people agreed to commit fraud — and that one of them took some step toward carrying it out.
You do not have to have personally submitted a single fraudulent claim to be charged with healthcare fraud conspiracy. Prosecutors may charge a person who knowingly agreed to participate, even in a limited role. Mere presence, association with participants, or knowledge of wrongdoing is not enough by itself to prove a conspiracy.

What Prosecutors Must Prove in a Conspiracy Case

To convict someone of healthcare fraud conspiracy, the government must prove beyond a reasonable doubt:

• That two or more people agreed to commit health care fraud
• That the defendant knew of the agreement's unlawful purpose and voluntarily joined it
• For a general conspiracy charge under 18 U.S.C. § 371, that a member committed an overt act in furtherance of the conspiracy. The health care fraud conspiracy statute, 18 U.S.C. § 1349, does not require proof of an overt act.

Critically, the government does not need to prove that you knew every detail of the scheme, that you participated from the beginning, or that you personally profited. A minor role — preparing documents, scheduling patients, operating billing software — can be enough.

Joint and Several Liability in Conspiracy

Under conspiracy law, each member of a conspiracy is legally responsible for the acts of every other member carried out in furtherance of the scheme. This means that if your co-conspirators billed for $10 million in fraudulent claims, the government may seek to hold you responsible for losses caused by co-conspirators' conduct that was within the scope of what you agreed to and reasonably foreseeable to you, which can greatly exceed the amount you personally handled. This principle has devastating consequences for defendants in healthcare fraud cases and is one of the primary reasons early, aggressive legal defense is absolutely critical.

Federal Penalties for Healthcare Fraud in New York

Healthcare fraud convictions carry some of the most severe penalties in the federal criminal code. Depending on the specific charges, a conviction can result in:

• Up to 10 years in federal prison per count of healthcare fraud (18 U.S.C. § 1347)
• Up to 5 years in federal prison per count of conspiracy (18 U.S.C. § 371)
• Up to 20 years if the fraud caused serious bodily injury to a patient
• Life imprisonment if the fraud resulted in a patient’s death
• Up to 10 years per count for Anti-Kickback Statute violations
• Criminal fines of up to $250,000 per count, or twice the gross gain or loss
• Mandatory restitution — repayment of all fraudulent amounts to Medicare, Medicaid, or insurers
• Civil False Claims Act liability of up to three times the government's damages plus a civil penalty for each false claim
• Exclusion from Medicare, Medicaid, and other federal health care programs (a minimum of five years for mandatory exclusions)
• Loss of professional license (medical, pharmacy, nursing)
• Forfeiture of assets derived from the fraud

Federal prosecutors in the Eastern District of New York (Brooklyn) and the Southern District of New York (Manhattan) have obtained multi-year and even multi-decade sentences in healthcare fraud cases. These courts take these cases seriously, and so should you.

How Federal Healthcare Fraud Investigations Work

Understanding how the government investigates healthcare fraud is essential to building an effective defense. Federal investigations in New York typically unfold over months or even years before any arrest is made.

How Investigations Are Triggered

Federal healthcare fraud investigations in New York are most commonly initiated by:

• Data analytics and anomaly detection by Medicare and Medicaid billing auditors who flag unusual billing patterns
• Whistleblower complaints filed under the False Claims Act (qui tam lawsuits) by current or former employees
• Referrals from private insurance companies that detect fraud in claims
• Tips from patients, competitors, or disgruntled employees
• Information from cooperating witnesses in related investigations

What Federal Investigators Do

Once a healthcare fraud investigation is opened, federal agents typically:

• Subpoena years of billing records, patient files, and financial documents
• Conduct undercover operations, including posing as patients or referring physicians
• Interview employees, former employees, patients, and business associates
• Execute search warrants at medical offices, clinics, pharmacies, and billing companies
• Seize computers, medical records, and financial documents
• Freeze bank accounts and seek asset forfeiture

By the time you are contacted by federal agents, presented with a subpoena, or learn that your office has been searched, a substantial investigation may already be underway. This is why you must retain an experienced federal criminal defense attorney immediately — before you say anything to investigators.

Defense Strategies in Healthcare Fraud Cases

Being charged with healthcare fraud does not mean a conviction is inevitable. An experienced criminal defense attorney — especially one who has worked as a prosecutor and understands how the government builds its cases — can challenge the charges at every stage.

Challenging Intent

Healthcare fraud requires proof that the defendant acted knowingly and willfully. Many billing errors, coding mistakes, and documentation deficiencies result from administrative errors, inadequate staff training, or complex and ambiguous billing regulations — not criminal intent. A skilled defense attorney can argue that errors were accidental and not criminal in nature.

Challenging the Scope of the Conspiracy

In conspiracy cases, the defense can argue that the defendant was not a knowing participant in the fraudulent scheme, did not agree to its criminal purpose, or withdrew from the conspiracy, which can limit liability for later conduct and affect the statute of limitations. Limiting the defendant’s alleged role and contesting joint liability for co-conspirators’ acts can significantly reduce exposure.

Attacking the Government’s Evidence

Federal prosecutions rely heavily on billing records, financial data, and witness testimony. Defense counsel can challenge the reliability of expert witnesses, the chain of custody of electronic records, the credibility of cooperating witnesses (who often have significant incentives to testify favorably for the government), and the accuracy of the government’s loss calculations.

Regulatory Defense

Healthcare billing is extraordinarily complex. Regulations under Medicare and Medicaid change frequently, vary by specialty, and are often ambiguous. A defense attorney with deep knowledge of federal healthcare regulations can argue that the defendant’s conduct was consistent with a good-faith interpretation of applicable billing rules.

Negotiating a Favorable Resolution

Not every healthcare fraud case goes to trial. In appropriate cases, experienced defense counsel can negotiate a plea agreement that reduces charges, limits prison exposure, preserves the defendant’s professional license, or avoids criminal conviction entirely through a deferred prosecution or civil settlement.

Why Choose Sharifov & Associates, PLLC for Your Healthcare Fraud Defense

Rovshan Sharifov is a former New York prosecutor with over 24 years of experience in criminal law. He has spent his career in the New York criminal justice system — first as a prosecutor learning how the government builds and wins cases, and then as a criminal defense attorney using that knowledge to defend his clients.
When you are facing federal healthcare fraud charges in New York, you need an attorney who:

• Understands how federal investigators gather evidence and build conspiracy cases
• Knows the Eastern District and Southern District of New York federal courts
• Has the experience to challenge evidence, negotiate with prosecutors, and try cases to verdict
• Will fight aggressively for your freedom, your career, and your future

At Sharifov & Associates, PLLC, we defend physicians, nurses, clinic owners, pharmacists, billing companies, office managers, and healthcare executives throughout New York. We understand the stakes — and we fight for results.

Contact Sharifov & Associates, PLLC Today — Confidential Consultation

If you are under investigation for healthcare fraud or have been charged with medical fraud conspiracy in New York, do not wait. The earlier you involve an experienced criminal defense attorney, the more options you have.
Call us for a confidential consultation.